DENVER – A state auditor investigation whose executive summary was released Monday found there was evidence of occupational fraud, possible illegal transactions and misuse of public funds involving four former employees of the State Court Administrator’s Office.
The Office of the State Auditor (OSA) referred those four employees to law enforcement to determine whether any criminal charges should be filed, according to an executive summary of the audit and a letter from Chief Justice Brian D. Boatright.
Under Colorado statute, if an OSA investigation “Finds evidence of apparently illegal transactions or misuse or embezzlement of public funds or property,” the auditor is required to report the matter to either law enforcement, a district attorney, or the attorney general.
The OSA report looked into allegations of fraud involving the State Court Administrator’s Office (SCAO) and a sole source, $2.5 million training contract given to Mindy Masias after she left her job as chief of staff at the office, as well as extra money paid to Masias and former human resources director Eric Brown for consulting and speaking fees.
After The Denver Post reported on the $2.5 million judicial training contract and the resignation of the state’s chief court administration in July 2019, the Colorado Judicial Branch asked for the OSA to investigate.
During the investigation, the team reviewed more than 16,000 documents and interviewed 11 current and former employees of the Judicial Department.
Investigators found Masias earned more than $17,000 and Brown earned at least $26,800 in salary from the state while conducting outside employment activities. The auditor’s report found “there is at least some evidence” of fraud, apparently illegal transactions or the misuse of public funds that would require a report to law enforcement.
The report also found that there was “at least some evidence” of those things involving an unidentified SCAO employee’s settlement agreement that would warrant a report to law enforcement. That employee allegedly had information that they “could have used against Ms. Masias and Mr. Brown,” the report found. That employee received the highest payout total out of eight employees who had received settlement agreements from 2000 through 2017.
Regarding the contract for Masias, which a whistleblower told The Denver Post was given to her after she threatened to expose alleged misconduct involving justices, the OSA found Masias had potentially damaging information about the Judicial Branch.
The OSA report says some evidence was discovered that Masias requested a contract be promised to her before she resigned – but not that she was promised one.
“However, the OSA did not obtain evidence that Ms. Masias was promised a contract for such services prior to her signing a Resignation Agreement and Release of Claims,” the report says. “Further, the contract has since been terminated, and as of the date this report was published, Ms. Masias had not received any public funds for services rendered under the contract.”
“…Still, the process by which Ms. Masias was awarded the sole source contract for leadership training appears to have been flawed in several respects,” the report goes on to say.
The report says investigators found some evidence Brown had tried to influence the request-for-proposal process to be sure Masias would receive the contract and that he might have shared evidence with her to her own advantage in the process.
“There is evidence that Mr. Brown began contemplating and discussing the idea of entering into a sole source contract with Ms. Masias before the RFP was issued,” the report says.
Despite then-Chief Justice Nathan B. Coats having the Judicial Branch terminate its contract with Masias two days after learning about possible malfeasance, the report found there was at least some evidence of occupational fraud, apparently illegal transactions, or misuse of public funds involving “Mr. Brown’s and Ms. Masias’s apparent attempt to influence the RFP, sole source contract, and related processes in favor of Ms. Masias, and ultimately resulting in the award of a sole source contract to Ms. Masias,” the report says. That evidence requires a report to law enforcement, the OSA report found.
In his letter to Justice Department personnel, Boatright said no current employees were being referred to law enforcement.
“I must emphasize that this is not a determination that laws were broken, nor does it mean that criminal charges will be filed,” Boatright wrote in the letter.
He went on to say that he would not be able to comment further on the report or the issues that have been referred to law enforcement, but pledged that the Justice Department would fully cooperate with any further investigation.
“The OSA’s investigation and report are helpful in continuing to improve the Department’s policies regarding leave and contracting, and the Department has, since 2019, implemented several changes to the personnel and fiscal rules to improve operations,” Boatright wrote. “We continue to look for ways to improve further."