TUCSON, Ariz. (KVOA) – A $40 million missing taxpayer case involving a former Santa Cruz County treasurer could turn into a legal battle between the county and the state.
News 4 Tucson has obtained a notice of claim filed by the county against the state alleging the auditor general's failure to detect suspicious spending earlier.
News 4 Tucson has obtained a notice of claim.
The notice of claim is now a key part of the county's fight against the state auditor general, who recently released a scathing report against county leadership.
The county plans to sue the state for neglecting its oversight duties, even though the auditor general's report places that burden on county leaders. Many residents are wondering how this happened and why no one is in jail.
News 4 Tucson has obtained a notice of claim from Santa Cruz County against the state of Arizona. This is the first step before filing a lawsuit against a government agency.
The lawsuit, filed Aug. 19, accuses the state auditor general of failing to catch suspicious financial reports from Elizabeth Gutfahr, the county's former treasurer. is accused of illegally taking about $40 million from taxpayers and funneling it into its own businesses. .
The complaint says the county believes the auditor general's annual audit of the finance department fell short of “generally accepted auditing standards.”
The county claims the comptroller received documents about the high per diem warrants in the treasurer's office in 2020 but was unaware of the scheme at the time.
“Because the Auditor General was unable to uncover Mr. Gutfahr's theft, the county did not become aware of the embezzlement until April 2024. The county says Mr. Gutfahr continued to receive funds for at least 10 years. ”
The notice of claim was filed a week before the Comptroller General released a report criticizing county supervisors and county administrators for failing to meet their statutory oversight duties.
In response, Santa Cruz County requested a retraction of the report, which suggested it was retaliation for the notice of claim. Tucson Resident News 4 said residents are tired of the blame, and some, like Jose Hernandez, said they feel the lack of oversight is primarily the county's fault.
“I think they are the responsibility of the principal (sic)…” Jose Hernandez said.
“So you feel that county officials are responsible before the state?”
“Of course they're supervising people you know. It's amazing that they didn't capture this much money and didn't suspect anything,” Hernandez said.
Former Treasurer Elizabeth Gutfahr has not been criminally charged, but she has already been sued by the county.
The FBI is still investigating this incident. We will notify you of the latest information.
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