There is more than $4 million missing from a Santa Cruz County bank account with reports it was transferred into another account registered to the former county treasurer.
Angela Gervasi is reporting the story for The Nogales International and asking how the missing funds could affect local school and fire districts. She spoke more with The Show about the investigation.
Full conversation
LAUREN GILGER: So let's start with this $4 million that's missing. What, what exactly happened here?
ANGELA GERVASI: Yes. So it's great to start at the beginning. On about April 11th, county treasurer, for Santa Cruz County, Elizabeth “Liz” Gutfahr, officially resigned effective the following day, April 12th, and Gutfahr was initially elected to the position in 2012 and county records show she was actually planning to run for another term later this year. So the resignation seemed a little bit abrupt. About six days later, on April 18th, the Santa Cruz County Board of Supervisors released this joint statement disclosing that the county and the FBI were working together to investigate irregularities within the county's bank accounts and those accounts were managed by Gutfahr herself.
GILGER: OK. So this wasn't all at once, right. There were like several transfers that happened over the course of like a, a 6-month period or so.
GERVASI: Yes. So, what we know right now is that between about September of 2023 and late March 2024, there were approximately 11 wire transfers. Each transfer was about $375,000. So a total of $4.125 million were, you know, slowly sort of moved out of this county bank account and into another bank account called Rio Rico Consulting and Real Estate, which is registered under the name Elizabeth Gutfahr.
GILGER: OK. OK. So where did these funds come from? Were are they coming out of the county's budget?
GERVASI: So, right, so one of the, you know, main tasks of the county treasurer's office is to sort of manage the cash flow of tax revenue from our taxpayers here in Santa Cruz County and making sure that revenue makes its way adequately into our tax district. So those are our school districts K-12 as well as our community college district and our local fire districts. So there was an account there with all that money pulled together. And that's where the money was taken from.
GILGER: OK. So tell us more about this former county treasurer, has she said anything about this so far?
GERVASI: So Liz Gutfahr has not returned the Nogales International's request for comment. It should also be noted that she has not been formally charged with any crimes as of this morning [June 11, 2024]. According to federal court records, I checked about an hour ago. But you know, the county supervisors say that they found out about these financial irregularities in early April and that they told Gutfahr she would be placed on a 120-day suspension with pay during the investigation. Instead, however, Gutfahr chose to resign citing health and personal reasons in her official resignation letter.
GILGER: So let's talk about the potential effects on county resources. You mentioned local schools, fire districts, things like that. Are they concerned that there will be budget repercussions for them? That's a lot of money.
GERVASI: Yes, Lauren, there definitely seems to be a lot of concern here. Patagonia Public School Superintendent Kenny Hayes said he was, you know, angry and confused. Still, however, he said there would be no layoffs or anything of the sort at this time. It seems to be that there are a lot of unknowns. For example, Nogales Unified School District Superintendent Angel Canto said she was told by the county to review NUSD records beginning in 2013. So it seems that school officials and fire district officials are being told this these patterns could be stretching back further in time. Canto told me in an email that she asked county officials, you know, what is the total amount of money missing? And she said, no number was provided "other than to state more than once that it will be much more than $4 million."
GILGER: OK. So we don't know how much, but more than this $4 million that is documented so far. And the school districts and fire districts are going back a decade, checking their own financial records. Yell us where this federal investigation stands. This is the FBI looking into this, yeah?
GERVASI: Yes. Around the time of, you know, Liz Gutfahr's resignation, you know, the newspaper was getting quite a few calls from local residents who reported sightings of federal agents in the area of Gutfahr's property. And the Santa Cruz County Sheriff's Office later confirmed that federal agents had said they were executing a search warrant on the property. However, it seems that the FBI investigation is ongoing, like I said, no arrests made, but it does seem to be working with the county to further, you know, probe the issue and, but beyond that $4.125 million we're still not getting a full amount or, you know, much more information.
We're trying to make public records requests to sort of glean and extract more information about the issue, but right now it seems like things are ongoing. The county has also hired a forensic auditing firm to conduct, you know, another audit on the treasurer's office as well.
GILGER: Is there a sense that they will get this money back when and if this investigation concludes?
GERVASI: That seems to be a big unknown as well. I mean, when you look at other, you know, embezzlement cases involving the government, it seems like a very, it can be a very tricky thing to get that money back. So that also seems to be an unknown.
KJZZ’s The Show transcripts are created on deadline. This text may not be in its final form. The authoritative record of KJZZ’s programming is the audio record.
