Liz Gutfahr
(Liz Gutfahr.File photo by Jonathan Clark)


Santa Cruz County filed a civil lawsuit against former County Treasurer Liz Gutfahr Thursday, alleging that the elected official embezzled more than $39.4 million in public funds during her 11 years in office.

The County Board of Supervisors made the announcement Friday afternoon, issuing a statement on the litigation.

“Though this is a significant amount of money for our community, we will do everything in our power to avoid impact to the day-to-day operations of the entities that rely on funding from the county, and we will continue to provide straightforward updates as things progress,” the statement said.
  • It comes days after a private meeting between the Board of Supervisors and financial experts was posted on YouTube – revealing the sheer magnitude of the missing funds.
Before Monday’s executive session, Santa Cruz County officials had confirmed that $4.125 million had been withdrawn from county funds during Gutfahr’s final months in office. 
During the closed-door meeting, however, an expert from forensic accounting firm B. Riley Advisory Services estimated that the true impact was nearly 10 times greater, surpassing $39.4 million.
While Friday’s statement announced the new lawsuit, the Board of Supervisors did not address the executive session or how the meeting ended up online.
The lawsuit was filed at Pima County Superior Court, according to the supervisors’ statement.
According to Monday's presentation from B. Riley Advisory Services, nearly three-quarters of the missing funds were siphoned from local school districts: Nogales Unified, Santa Cruz Valley Unified, Patagonia Public Schools, Sonoita Elementary, and Santa Cruz Elementary (Little Red).

Even as civil litigation unfurls, criminal charges had not been filed against Gutfahr as of Friday afternoon, according to federal court records.

In Friday's joint statement, the Board of Supervisors noted that multiple agencies are continuing to investigate Gutfahr, including the Federal Bureau of Investigations, the U.S. Department of Justice and the Arizona Auditor General's Office.
This spring, Santa Cruz County approved a professional servces agreement with forensic accounting firm B. Riley Advisory Services to further analyze the mismanaged funds.
  • The County Attorney's Office, along with Deputy Manager Mauricio Chavez and appointed Treasurer Alejandro Paz are also investigating the alleged embezzlement, the supervisors reiterated in their statement Friday.