Colo. tax worker accused in scam

Colo. tax worker accused in scam

	Published : Tue, 01 May 2007 00:09 By : Agencies Print this Story

DENVER (AP) - A supervisor in the state's tax-collection agency was arrested on charges of approving at least $5.3 million in phony refunds and other tax payments for her boyfriend and another person, prosecutors said Monday.

Michelle Cawthra, 30, who worked for the state Department of Revenue, was jailed Saturday on suspicion of theft and computer crime and was being held on $10 million bail.

An arrest warrant was issued for Hysear Don Randell, 40, whom co-workers described as Cawthra's boyfriend, according to an arrest warrant affidavit. Randell was wanted on a theft charge but his whereabouts Monday were unknown, said Lynn Kimbrough, spokeswoman for Denver's district attorney.

Andre Holliday, 41, described as an associate of Randell's, was arrested Saturday on suspicion of theft. His bail was also set at $10 million.

The alleged scheme was discovered Friday and arrest warrants were issued that day, Kimbrough said. Investigators expect to uncover more losses, she said.

Kimbrough said other Department of Revenue employees became suspicious of refund checks they had seen.

According to one affidavit, three refunds of at least $22,000 were made out to Holliday for tax years 2002, 2003 and 2004, even though his tax returns for those years made no claim for the refunds.

The refunds required three employee approvals. Records showed they were approved by Cawthra and two of her former subordinates who no longer worked there when they supposedly approved the refunds, the affidavit said.

A records review turned up refunds of $2,533 and $9,000 that were approved last year for Randell, but not the records to support those refunds, the affidavit said.

In addition to tax refunds, Cawthra was accused of transferring estimated-tax payments from other taxpayers' accounts into those controlled by Randell or Holliday, then authorizing checks to companies controlled by the men, the affidavit said.

Cawthra and Holliday were being held in the Arapahoe County jail and will be transferred to the Denver jail this week, Kimbrough said.

Department of Revenue Executive Director Roxy Huber said Cawthra has been placed on administrative leave.