Santa Cruz County residents demand accountability after nearly $40 million goes missing

TUCSON, Ariz. (13 News) - After nearly $40 million in funding was allegedly stolen, the Santa Cruz County Board of Supervisors has hired a law firm to take legal action against the county’s previous treasurer.

However, the big question from the community now is where and how the county will recoup those missing funds.

Santa Cruz County leaders claim Elizabeth “Liz” Gutfahr stole $39 million from county funds over 10 years and has filed a lawsuit against her.

Gutfahr resigned as Santa Cruz County treasurer back in April, days after a bank noticed “financial irregularities flagged on county accounts.”

Gutfahr, who was first elected to the position in 2012, notified the Santa Cruz County Board of Supervisors of her resignation on April 11. The resignation was effective the next day. She said she was stepping down “due to health and personal issues.”

Manuel Ruiz, the supervisor from District 1, told 13 News the county filed the lawsuit to recover as much of the missing money as possible.

“At the end of the day, Liz did a disservice to this community,” Ruiz said. “She should really be ashamed of herself for what she did.”

On Tuesday, Aug. 6, the Santa Cruz County Board of Supervisors approved an agreement with Epiq eDiscovery Solutions via Snell & Wilmer L.L.P. to store and process electronically stored data connected with the suit.

Dozens of residents from all across the county who attended that meeting are raising concerns over the missing funds.

“Schools are having the greatest loss of all,” a concerned county resident pointed to. “Can you tell that I am angry, yes but way more than being angry, I am very sad.”

According to a news release, the supervisors were made aware of 11 fraudulent transactions each for $375,000 by their financial institution in April 2024.

“How can the bank tell you guys that there is funny business going on and you didn’t know about it?” a resident asked during public comment. “Something is wrong here and something has to change.”

That message of change was echoed by many members of the community asking how supervisors could let this go on for so long.

“We know her background. We have grown up here. We know where she came from and she had no money...but the money had to be coming from somewhere,” a Santa Cruz County resident said during public comment. “She was spending money in Tubac like water, guys you missed it.”

There were even a few heated exchanges between supervisors and residents, over the embezzled funds.

“I am so devastated to think that $38 million, ‘we used to think it was $5 million just a couple of months ago,’ has somehow just disappeared over the years,” one community member questioned.

When asked how the county planned to get the funds back, Ruiz pointed to a possible seizure of property and assets.

Ruiz told 13 News the county will not increase taxes to get those funds back.

“It will be some time before this community and hopefully it’s a lot sooner than later that they gain trust in their elected officials,” Ruiz said. “What they need to realize is not everybody is corrupt and not everybody is unethical.”

The alleged unethical practices are why Ruiz said the county is taking steps to make sure a loss of funds never happens again.

“We are setting up a lot of steps to ensure that we can protect and get more answers and accountability,” Ruiz said.

However, not everybody in the community is convinced.

“Most of us are familiar with how to balance a checkbook,” Jesus V. Gerez, a Santa Cruz resident, and candidate for the BOS said. “This almost $40 million would have put a dent in anybody’s checkbook and should have been looked at long before now.”

According to Ruiz, the county is working closely with FBI investigators. He said the supervisors understand the frustration. However, they want to assure the community that they are doing everything possible to get the $39 million back and are pushing for prosecution.

“As a supervisor, their job is to oversee the rest of the county, and regardless if the other person was elected or not it’s up to them to make sure they are holding them accountable,” Gerry Navarro, a Santa Cruz County resident and candidate for the board of supervisors said.

The FBI, th Department of Justice, Arizona Auditor General’s Office, and B. Riley Financial (forensic auditors), are actively investigating.

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