Ex-tax supervisor accused of big theft showed two sides

Neighbors saw nothing; workers had complained

Ann Imse and Alan Gathright, Rocky Mountain News

Published June 5, 2007 at midnight

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Former tax supervisor Michelle Lynne Cawthra is accused of cleverly stealing $10 million from the state treasury.

But until the day she was sent home on a paid disciplinary leave for unspecified reasons, nothing appeared amiss.

She lived quietly alone, making payments on her $136,000 east Denver condo, a nondescript unit with the patio on the parking lot.

Neighbors detected no new flourishes of prosperity in her lifestyle. She came and went as always, a friendly hello, a midlevel state bureaucrat with little time to waste on extended pleasantries.

And to date, there's no public evidence that Cawthra, 30 - whose career before state service included stints in pizza delivery and dog grooming - spent any of the loot associated with the criminal charges against her.

Instead, according to court documents, she was pouring millions of dollars into accounts controlled by her married boyfriend, Hysear Don Randell.

It was Randell who transformed himself from an anonymous $3,000-a-month Colorado youth prison guard into a boxing and hip-hop impresario.

His flamboyant lifestyle included buying space for his company logo, TRU 'dat,' in the ring at expensive prizefights, the purchase of a $1.6 million home in Los Angeles' Brentwood and the signing of hip-hop artists to his own recording label.

The budding, self-styled mogul, an imposing figure at 6 feet 5 inches tall, even threw a glitzy party at Hugh Hefner's Playboy Mansion.

But Randell apparently didn't take Cawthra along.

She stayed at work, according to extensive state personnel records, where she was trusted by her bosses, but feared and even despised by some underlings.

Randell, 40, is the father of eight children by various women. Court records depict him as a lavish spender on big SUVs, an expensive security system and renovations on the Aurora home he shared with his wife - who gave birth to a daughter about six months ago.

Court and police records say that it was Cawthra who paid - with her personal Visa card - Randell's $1,000 bail on a domestic violence case filed in early 2006 by still another woman, the mother of his toddler son.

Cawthra herself came into work with bruises and black eyes, but she denied that they were the result of domestic violence when asked directly by her sister, Laura McCarter. In February 2007, she explained a black eye to a colleague by saying she'd hit herself with a drill.

Though Randell has been arrested for assault nine times, he has only one old, minor conviction, not involving Cawthra.

The 5-foot-2-inch Cawthra claimed domestic violence problems with a previous boyfriend, 6-foot-4-inch Shakoor Nadir Ahmad, records show.

In 2000, she obtained a restraining order against him, leveling accusations of "pulling my hair, punched me in the face, shoving me into things (walls, car, etc.)" She said Ahmad threatened her and her family. He was never charged.

Both Cawthra and Randell are now in jail, awaiting trial on multiple counts of theft associated with the state's missing $10 million.

In court, she cried. He raised his middle finger toward a photographer.

Clever on resume

Cawthra's parents, Sheri Kite and Marlin Cawthra, divorced when she was 2. She remained with her father, growing up in the north metro area, graduating from Adams City High School in 1994.

That summer, she worked as a garden store cashier. She studied nursing for three semesters at the University of Northern Colorado before transferring to Metro State College in business.

Along the way, she pulled a Christmas stint at the post office, delivered pizzas for Little Caesars and earned $6 an hour as a clerk for the Adams County treasurer. Later, she tried being an in-home sales representative for a knife company.

When she applied to work for the state 11 years ago, she didn't have a stellar resume - but she was clever in building on what she had. She wrote, for example, that her duties as a dog groomer at a racetrack included "compliance with state regulations regarding greyhound racing."

Hired by the state while a part- time student at Metro, she nearly doubled her salary in two years as she rose from data entry clerk in the Department of Transportation to beginning tax examiner.

She held one state job just two days before a better offer arose.

In the Department of Revenue, she jumped again within two years to become a tax manager. She finished her bachelor's degree in business a year later, in 2001.

At Revenue, supervisors loved her because she was fast and knew the tax code cold. In 2003, she was handling 16 accounts an hour, when nine was considered outstanding.

Early on, however, there was a darker side portrayed in her performance evaluations. The CDOT payroll office wrote in 1998 that it was getting one to three calls a week complaining she'd been "abrupt and/or abusive."

As she rose to greater responsibility, some of her staff regarded her as hostile and uncommunicative.

When employees asked Cawthra questions, "She'd e-mail back stuff like: 'How stupid can you be,' " said former staffer James McClarnon. "I hate to say it, but she was very rude and she was arrogant."

In a 2004 evaluation, Cawthra was criticized for not treating others with respect - and she fought back. She admitted to being frustrated by staff who ask redundant questions, and rejected "babying them along." Managers conceded to her objections and raised her evaluation.

In 2005, she was praised for "great work" by her boss's boss, Neil Tillquist, who described her as "professional and kind." About the same time, according to the employment records, he was referring her to a class in conflict resolution.

She would be stealing within months, according to court documents.

'Real personable'

To her neighbors, Cawthra was an on-the-go state worker who never had time to use the Weber grill or glider swing on her patio.

"She never had a chance . . . Too busy," said Ernie Ho-a, a retired federal police officer who lives next door. He recalled Cawthra doting on her 5-year-old niece, who sometimes visited for a couple of days.

"She was real personable. We'd always say 'Hi' when she headed out to work," Ho-a said.

Neighbors recalled the burly Randell visiting occasionally.

Family members said they barely met Randell and aren't even sure he was her boyfriend. But they think Cawthra met him at work in 2002.

Randell claimed on a state job application that he worked directly for Cawthra as a tax examiner. But records say he was a temporary tax-season clerk in a different division, stamping returns and checking numbers.

Nothing in the state records indicates that they met during that time.

Cawthra is accused of exploiting the computer pass codes and passwords of McClarnon and another former employee, Jason C. Chen, to overcome a state safety procedure that required three authorized signatures to issue large tax refunds.

McLarnon now wonders if Cawthra's hostile behavior was a tactic.

"It makes sense now, because if you're doing those types of things . . . you don't want people around you examining you," McClarnon said. "But at the time I didn't realize it."

"Why was she so hostile to all her crew members? Maybe she drive us away so she got inactive (computer pass code) user ID to use," said Chen, who moved to another state job in January.

Chen said he was one of the rare employees who liked Cawthra - and vice versa. She even threw him a going-away party. But Cawthra ran an office with rigid rules - workers had to submit a leave request if they were 10 minutes late for work.

Even so, Cawthra was also chronically late for work, according to her performance reviews.

Emotional cycling claimed

In autumn 2006 - when Randell was already spending money like he had an endless supply - Cawthra had a "blow out" with two of her employees, McClarnon said. The two, Kevin Warrior and Sharon Baldwin, went over the head of Cawthra's always-supportive boss, Janet Swaney, to the division head, Tillquist.

"Over the past four years, Michelle's behavior has been on a roller coaster," Baldwin wrote to Tillquist on Nov. 8. "Her emotional state is sometimes up and, apparently without provocation, sometimes down. Obviously that makes for a difficult and hostile work environment."

It was just the previous week, on Nov. 1, when Randell made a show of generosity to his wife, Trudy, buying her the $1.6 million Brentwood residence.

Baldwin's letter said Cawthra "worked behind a wall of disdain for others." She said Cawthra's emotional cycling had worsened since 2004.

Baldwin quoted Cawthra as saying, "This is the way I am. People have to deal with it."

Warrior was transferred, and Tillquist ordered Baldwin and Cawthra into mediation. Tillquist told top management that Cawthra was "intelligent, organized and a hard worker," but "cannot mask her displeasure when it would be helpful to do so."

McClarnon saw no change.

"If she was (rebuked) it never mattered to her," McClarnon said, "because she kept on doing what she was doing. It seemed like nothing stuck to her."

In fact, nothing serious happened to Cawthra until March, when McClarnon, a veteran tax supervisor from another department, quit the agency after putting up with Cawthra for just three months.

McClarnon complained directly to Roxy Huber, appointed by new Gov. Bill Ritter as Revenue chief.

On March 21, Tillquist sent a blistering performance review to Cawthra, saying staff described her department as "oppressive and dysfunctional" and they feared retribution for speaking up. He sent her to classes and told her to conduct morale-boosting events.

He even ordered her to talk to her 14 employees two minutes per day each on non-work topics in order to build rapport.

Cawthra objected to that part.

That's "emotionally uncomfortable for me at the present," she wrote.

Refunds arouse interest

A week later, on March 28, Cawthra allegedly fabricated four fake tax refunds. Court documents say she had already taken nearly $10 million in a manner nearly undetectable, but this time, she was sloppy.

Within three weeks, one of her employees noticed the four odd refunds - for the same person, for the same amount plus interest, for four consecutive years.

The employee, Damon Drew, became suspicious when he found they had been approved by Cawthra and two former employees - who'd already left when the approvals were made. Drew told his boss, Kurt Bloomer.

But aware of Cawthra's reputation for retaliation, Bloomer hesitated one or two days.

Bloomer "was torn about about whether he should go to (Cawthra's) supervisor," according to court documents. "That woman, Janet Swaney, was well-known for supporting Cawthra against all complaints."

Swaney didn't believe the refunds could be anything but a mistake, she told Bloomer. She took Bloomer with her to see Cawthra.

Cawthra bluffed. And it worked.

The W-2 forms supporting the bizarre refunds were in her shred bin, she told Swaney. Cawthra could dig them out and show her - implying she could piece together the shreds, if her boss wanted.

That was good enough for Swaney. She declined.

But office gossip about fake refunds was heating up. Pam Peek, another staffer, recognized the name on the checks as that of a Cherry Creek clothing store partly owned by a man she knew as Cawthra's boyfriend, Randell.

She shared that with another co-worker, who went to another supervisor, who finally went beyond Swaney, and investigators were brought in.

By the next day, April 19, Cawthra was on forced leave, although she was still collecting her $64,000- a-year salary. The formal letter did not say what prompted the suspension.

Court documents allege she'd been clever enough to steal from the accounts of taxpayers who didn't realize they'd been victimized.

She stayed put in her condo.

A week later, investigators found millions were missing. Cawthra was arrested and charged with multiple counts of theft.

Swaney was suspended.

Mom offers support

In the aftermath of the startling charges, people who knew Cawthra were reluctant to speak about her.

Her family expressed shock. Investigators are looking for fraudulent tax returns in some of their names.

They found a revocable trust that Cawthra established for herself this year, which included her car, a 2005 Nissan Maxima. Such a trust would not prevent the state or other creditors from reclaiming funds.

Her mother and others have been showing up for Cawthra's court hearings. They've said little, citing the fact that some of them have been called to testify before the grand jury investigating her case.

"Our main goal is to be there to support Michelle," said her mother, Sheri Kite. "Other than that, there's not much we can do."

An aunt described Cawthra as "the sweetest person on earth."

As investigators searched Cawthra's office pursuing leads, they found a book on her office desk, Co-Dependent No More, a bestselling book for people who obsess over rescuing an alcoholic or other troublemaker and lose control of their own lives as a result.

At her home, officers found a DVD of another best-seller, The Secret. Its promise: Just believe in riches, and they will appear.

The premise of the state's case against Cawthra is that she made taxpayer money disappear - in huge amounts, in highly embarrassing fashion for her employers.

And yet, as her brother-in-law, Angelo Telitz, said, there were no outward signs that the Michelle they knew had changed - no trips, no fancy cars, no sign that she suddenly had money to spend.

She was still making payments on her condo, Telitz said.

"Just like any one of us."

Michelle Lynne Cawthra

• Age: 30

• Education: Adams City High School, Commerce City; University of Northern Colorado nursing courses; Metropolitan State College of Denver, bachelor's degree in business, 2001.

• Key promotions: Started as a temporary data entry clerk in the Department of Transportation in 1996 at age 20 at $7 an hour. Promoted to tax examiner in the Department of Revenue in 1998 and supervisor in that department in 2000. Fired April 30 as a tax examiner IV, when she was earning more than $30 an hour.

• Charges: Multiple counts of racketeering, theft and forgery.

• State losses: At least $10 million. Officials trying to track the missing money will not say if they have successfully found and frozen any funds.

imsea@RockyMountainNews.com or 303-954-5438

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