Last week brought the latest twist in an ongoing scandal in southern Arizona.
Liz Gutfahr is the former treasurer of Santa Cruz County, about 70 miles south of Tucson, along the border with Nogales.
Last Thursday, Gutfahr pleaded guilty to stealing more than $38.7 million in public funds and waived her right to a trial.
Daisy Zavala Magaña is a reporter for Nogales International, and she’s been covering the twists and turns of this fairly staggering saga. She joined The Show to sort through the sordid details.
Conversation highlights
How long did Liz Gutfahr serve as treasurer, and what exactly was she responsible for?
DAISY ZAVALA MAGAÑA: Yeah. So she was treasurer for just a little over 10 years. From January 2013 to April 2024. And overall, as you can imagine, she was responsible for management and distribution of public funds. And so her duties included oversight of county bank accounts. So that's checking savings and investment accounts. She also handled property taxes and processes like reconciliation, which is meant to ensure that county monies are all accounted for.
Let's talk nuts and bolts. In her capacity overseeing all those things. How did she manage to steal all this money?
ZAVALA MAGAÑA: Yeah, I know for a long time, we were in the dark and thankfully, court documents investigations have, have shed some light into this. She was found to have fabricated banking statements. She falsified cash reconciliation reports. And she also bypassed authentication procedures.
For example, she asked her deputy chief treasurer to give her her password to bypass [two-factor athentication] ... needing two people to kind of sign off on things. And then she also was well aware that the auditor general had a practice of only reviewing the county's June bank step statements every year. ... So she was more than prepared ... when that time came around.
And most recently federal authorities, which is — this came up, you know, during her guilty plea court hearing — they shared that she made 187 fraudulent transactions. ... So she took county money and, and transferred it into two of her private business accounts and she made it look like those were official county transaction. So that's kind of how she was able to bypass, you know, raising any red flags for 10 years.
So these private accounts that Gutfahr transferred the money into, these companies do not appear to have been officially incorporated. Correct?
ZAVALA MAGAÑA: Yeah, that's right. So that was ... Rio Rico Real Estate and Rio Rico Consulting. So those were not, you know, registered really as businesses.
So, over the course of this 10 or so years of fraud, what was Gutfahr spending all this money on?
ZAVALA MAGAÑA: Yeah, it's a long list. ... So far we know that she purchased,, multiple vehicles, money on luxury items, personal items. She even bought cattle with stolen county funds, and various properties, including her Rancho San Cayetano property ... it's a horse boarding facility. And the county also filed a civil lawsuit and imposed a receivership, and through that they've seized 17 properties. And they also found that her son and daughter-in-law had actually spent at least $2.2 million in county funds since 2018 and luxury goods. You know, Rolexes, luxury handbags, race horses and vacations, among other things. So, it's a long list of personal enrichment.
As you were just alluding, this story is that this appears to have been a bit of a family affair, this ongoing fraud.
ZAVALA MAGAÑA: Yeah, that's what the civil lawsuit indicates. ... The attorneys for the county have basically said that, you know, her husband, son and daughter-in-law knew about and benefited from and, in some ways, were complicit with, with her scheme to, to defraud the people of Santa Cruz County .
Are they in legal trouble as well?
ZAVALA MAGANA: They are named as defendants in the civil lawsuit. All three of them, so her husband, her son and daughter-in-law. But as for criminal charges, they are not currently listed as defendants in that, and it's unclear if they will.
How did she finally get caught?
ZAVALA MAGAÑA: Yeah. Good question. So the catalyst to everything really was that on April 3, JP Morgan chase detected what they called irregular activity on county bank accounts. So when they found that on April 3, they alerted the deputy county manager, and that kick-started an investigation that uncovered, you know, everything that we know today, led to a civil lawsuit. And then most recently criminal charges on part of federal officials for which Gutfahr has pled guilty to.
Gutfahr is not denying any of this, so what comes next for her.
ZAVALA MAGAÑA: Yeah. So she has a sentencing set for Feb. 6 and, I guess at that time we'll see how much she will be able to pay, which part of her plea plea agreement is $38.7 million in restitution and $13 million in taxes. So, I guess we'll see where those lie during her sentencing.
