The Tombstone Chamber of Commerce says it may have been able to stop the theft of more than $63,000 in cash receipts from the Boothill Graveyard Giftshop and thus not gotten hit by a bill for nearly $30,000 for unpaid sales taxes if its bookkeeper had done a better job, a recently filed lawsuit alleges.
Connie J. Grady was sued by the chamber on Sept. 22 in connection to $63,271 in cash which purportedly never made it from the giftshop’s register to the chamber’s bank account between January 2017 and June 2018. Grady’s company CNJ Bookkeeping was contracted at that time to provide payroll and tax services to the chamber but the thefts went undetected “as a direct and proximate result of Defendant’s negligence,” the lawsuit alleges.
The Tombstone Chamber alleges the money was stolen because bank deposits and daily sales transactions were not reconciled. The lawsuit seeks nearly $150,000 from Grady to compensate for the missing money as well as audit expenses, legal fees, and nearly $30,000 of sales taxes which were not paid to the Arizona Department of Revenue (ADOR) for 2017 and 2018 as required.
“During the internal investigation of this case, Plaintiff discovered the books and records that were improperly maintained during the past years,” the civil complaint states. “Defendant CNJ has been notified several times about her negligence and had been provided with a copy of the accounting report.”
The Tombstone Marshal’s Office (TMO) opened a criminal investigation in March 2018 but to date no one has been convicted in connection to any theft. The giftshop is owned by the City of Tombstone but at the time was operated by the chamber. Mayor Dusty Escapule had the giftshop returned to city control in 2018 after learning of the missing money.
The lawsuit also discloses that the Tombstone Chamber lost its IRS 501(c)(6) certification as a result of accounting issues and was even threatened at one point by ADOR with a tax lien against “all assets” of the chamber.
“Plaintiff has notified AZDOR about this situation and is trying to find a resolution, given that the Chamber is not able to pay the claimed amount as it is undergoing financial problems due to the recent pandemic,” the lawsuit notes.
However, it is unclear how the pandemic two years after the cash theft was discovered is connected to the chamber’s current ADOR troubles.
The lawsuit also suggests Grady did not cooperate with TMO Sgt. Travis Mattern who led the investigation with the Cochise County Sheriff’s Office. But Mattern’s official incident report lists the bookkeeper as being present at a key January 2019 meeting with investigators, Chamber President Susan Wallace, Deputy County Attorney Michael Powell, and the outside auditors.
The Arizona Daily Independent previously confirmed investigators faced some challenges due to the fact several employees had access to the chamber’s cash at various times. There were also issues with the lack of fiscal controls by the chamber board.
Only one former employee, Jordan Monique Newton, is known to have been prosecuted as a result of Mattern’s investigation. Newton’s case ended in a misdemeanor conviction related to fraudulent timesheets but not the cash theft. A superior court judge placed her on probation and ordered Newton to repay the chamber $1,710.
The lawsuit accused Grady of breach of contract, negligence, and unjust enrichment. She has until mid-October to file a formal answer to the chamber’s complaint which has been assigned to Judge Timothy Dickerson of the Cochise County Superior Court.