Former employee ‘not surprised’ by alleged tax scheme

5:47 PM, May 2, 2007   |    comments
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James McClarnon says there was an atmosphere of low morale and loose rules at the Department of Revenue.

Denver Police investigators say former Department of Revenue employee Michelle Cawthra wrote phony tax refund checks, some of them for $500,000 to $600,000 by using passwords of people who had just quit her department, including McClarnon’s.

"Oh, I was angry,” said McClarnon, “but I wasn't surprised."

McClarnon says during the time he worked with Cawthra, morale at the Department of Revenue was deplorable.

He says he was one of three people in his small department who quit, blaming morale problems and criticizing Cawthra's behavior.

Roxy Huber is the new executive director of the Department of Revenue.

She confirmed the rumors of bad morale and complaints about Michelle Cawthra.

However, Huber says she did not know about the thefts and was stunned when she heard about them.

On Wednesday morning, police had four people in custody: clothier Andre Holliday, Department of Revenue employee Cawthra, her boyfriend Hysear Randell, and attorney Kevin Toohig.

Cawthra was a supervisor in the tax division.

Late Wednesday, police let Holliday go.

The District Attorney says there's no reason not to believe Holliday’s story that he had no knowledge of the tax refund thefts.

Wednesday morning, a third and fourth suspect, Randell and a man identified as Ohio attorney Kevin Toohig, made their first court appearances.

Toohig’s bond was set at $10,000. He posted bond and is now out of custody.

His lower bond makes it appear his alleged involvement was not as serious as the others’.

Cawthra and Randell, though, are still in the county jail on $10 million bond.

On Wednesday, the District Attorney charged Cawthra with 27 felony counts, embezzlement and forgery were among the charges.

Cawthra is scheduled to appear in court on Friday to be formally advised of the charges.

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