Felony charges have been filed against the former Cortez finance director in the city’s embezzlement case.
Katheryn Moss, 70, faces one charge of theft and one charge of embezzlement of public property. According to court documents, she allegedly took a total of $68,800.46 from the city of Cortez between the dates of Jan. 1, 2016 and Dec. 31, 2018.
Her arraignment is scheduled for Aug. 5.
Nearly a year ago, Cortez City Manager John Dougherty announced it had been discovered that a former city employee had allegedly embezzled funds from the city.
After the announcement, the Colorado Bureau of Investigation launched an investigation into the case, concluding it earlier this year.
The issue did complicate finances for the city, which was in the middle of cleaning up three years’ worth of financial records, which had been muddied by a faulty software conversion in 2016. The CBI, though, asked the city to temporarily freeze the cleanup process while its investigation was underway.
Moss served as the city’s finance director for over three decades, officially retiring in January 2019.
Charges were filed on July 2 by the 22nd Judicial District Attorney’s Office.
“Between and including January 1, 2016 and December 31, 2018, Katheryn Ann Moss unlawfully, feloniously and knowingly, took a thing of value, namely: $68,800.46 in cash, of the city of Cortez,” the theft charge says.
According to 22nd Judicial District Attorney Will Furse, Moss is being issued a summons to appear at her Aug. 5 arraignment. She could face jail time of between two and six years, although that could be shortened or extended based on circumstances, and probation could be served as an alternative to imprisonment, Furse said.
Officials have been hesitant to directly connect the embezzlement case with the city’s other recent financial difficulties, although the delay in the city’s financial records cleanup process was significant.
The faulty software conversion in 2016, which led to inadquate financial documentation, prevented Cortez from receiving proper audits for three years. The audit backlog meant property taxes and Conservation Trust Funds directed to municipalities were withheld, and the city has been prevented from applying for grants from the Colorado Department of Local Affairs.
And in fall 2019, the city discovered that financial records prior to 2016 had gone missing, leading councilors to approve a contract for an IT specialist in November to try to recover the lost data, in order to be able to evaluate the full extent of the embezzlement.
Now, as with all governmental entities, the city faces new economic challenges posed by the coronavirus outbreak. In April, the Cortez City Council unanimously approved temporary expenditure cuts to help offset projected revenue losses incurred by COVID-19.
While the economic impact of the outbreak remains uncertain, City Manager John Dougherty said staff is preparing for a worst-case scenario of a $3.2 million revenue loss. The cuts would save $700,000, Dougherty said.
In June, over $2 million of CARES Act funding was awarded to Montezuma County, to be dispersed to county and municipalities for COVID-19 expenses.
The funds are being allocated based on population, with $735,814.78 going to Cortez, $119,321.32 going to Mancos, $79,547.59 to Dolores, and $1,270,551.05 to the county.