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Show Low Fire District—Theft and Misuse of Public Monies


In July 2012, the Navajo County Attorney’s Office requested the Office of the Auditor General to assist in its investigation of potential theft at the Show Low Fire District (District). As a result of our investigation, we determined that from February 2005 to June 2012, Natalie Cluff, former district administrative manager, used a fraud scheme to embezzle public monies totaling $1,794,594, falsifying records to conceal her misconduct. The embezzled monies came from taxes paid by district property owners that should have been used to support district operations for fire protection and preservation of life.

Specifically, Ms. Cluff may have violated state laws related to theft, fraudulent schemes, and misuse of public monies when she unlawfully issued 474 checks totaling $1,794,594. In particular, Ms. Cluff issued 446 unlawful district checks totaling $1,623,465 payable in her name, her father’s name (district fire chief), or her then-fiancé’s name (district assistant fire chief), usually writing various false explanations for the checks’ purpose in the memo sections. All of the available checks were deposited in Ms. Cluff’s bank accounts.1 Ms. Cluff also issued another 28 unlawful district checks totaling $171,129 payable to personal credit card accounts associated with the above-listed individuals. Bank and credit card records show this money was primarily spent on retail-related purchases, cash withdrawals, and personal debt, with some money going to two of Ms. Cluff’s siblings.

In addition, Ms. Cluff may have violated state laws related to computer tampering, forgery, and false filing when she attempted to conceal her actions by falsifying information recorded in the District’s accounting software related to 150 of these unlawful checks and by submitting fake district Independent Auditor’s Reports to two entities a total of 11 times.

Ms. Cluff embezzled this nearly $1.8 million of district monies by abusing her authority as district administrative manager and by taking advantage of inadequate internal controls over the expenditure and reporting of district monies. Additionally, district officials, including Ms. Cluff’s father Ben Owens, failed to exercise oversight over Ms. Cluff’s activities. In particular, they did not adequately segregate cash disbursement duties, allowing Ms. Cluff access to check stock, check-register-accounting software, signature stamps, and bank statements without any compensating controls. Moreover, governing board officials failed to ensure Ms. Cluff was appropriately supervised, allowing her to report directly to her father or her then-fiancé.

On May 3, 2016, the Navajo County Attorney’s Office presented evidence to the Navajo County Grand Jury, resulting in Ms. Cluff’s indictments on 21 felony counts related to theft, misuse of public monies, fraudulent schemes, computer tampering, forgery, and false filing. In addition, Ms. Cluff and her father Ben Owens, were each indicted on four felony counts related to conspiracy, illegally conducting an enterprise, assisting a criminal syndicate, and money laundering.

1Deposit records were not available for ten checks dated between May and September 2005. The remaining 436 checks were deposited in seven of Ms. Cluff’s bank accounts: two of her own, two she held jointly with her ex-husband, two she held jointly with her parents, and one she held jointly with her then-fiancé.