RE1J sues over theft accusations
Leaders say aim is to recoup losses from former IT director
Originally published 2013-10-17
Criminal charges may not be the only concern for the former director of information technology at the Gunnison Watershed RE1J School District.
RE1J leaders filed a lawsuit against Cannon Leatherwood, his wife and two companies with which he’s believed to be affiliated this past Friday in Gunnison District Court.
The suit names Leatherwood, his wife Melissa Kacel, Colorado Computer Consultants, LLC (CCC), and Computer Clarity, LLC as defendants. It seeks relief for eight separate claims against one or multiple of the defendants: civil theft, conversion, fraudulent misrepresentation; fraudulent concealment; unjust enrichment; breach of contract; piercing the corporate veil; and breach of fiduciary duty.
Concurrently, a criminal investigation into allegations of theft is still proceeding. Court documents indicate that Leatherwood is being eyed for allegedly funneling hundreds of thousands of dollars through one or multiple technology supply companies that he headed.
Leatherwood’s last day with RE1J was Aug. 6. He began working as the district’s IT director in 2006.
Administrators reportedly became suspicious after a check deposit stamp for CCC was found in the copy room of the Lake Administration Building in late July — weeks after current Superintendent Doug Tredway stepped into his position at the helm of the district.
Tredway said this week that the civil suit is aimed chiefly at recouping financial losses.
“Basically, we’re continuing to take steps to see that justice is served, get as much of our money back as possible and ensure that this sort of thing doesn’t happen again,” he said. “We’re continuing to cooperate with the police on the criminal investigation.”
The lawsuit does not state a dollar amount in damages sought. Tredway said that he expects that will come through either civil proceedings, a criminal case or a combination of both.
As part of the criminal investigation, a court order for production of records was signed by County Court Judge Ben Eden Aug. 28.
The affidavit requesting the order details Gunnison Police detective Chris Danos’ probe into the report by RE1J administrators of possible theft.
The affidavit refers to invoiced payments to CCC between March 11, 2010 and July 11, 2013 totaling $411,147.50.
On July 30, Danos reportedly met with Leatherwood — who was at the time serving a 150-day work-release sentence for a driving under the influence of alcohol conviction in Denver — in the Gunnison County jail.
When asked by Danos if there was any truth to allegations that CCC was actually “bogus” and that Leatherwood was funneling district money through the company, Leatherwood reportedly “thoughtfully paused and replied, ‘no.’” Leatherwood also told Danos that he has never worked for CCC.
Yet, Danos’ investigation uncovered a document that listed Leatherwood as the sole capital contributor to CCC.
It was also learned by Danos that the website associated with CCC contained the name of a company — Computer Clarity — registered through the Colorado Secretary of State to Leatherwood’s father, Wilton Charles Leatherwood.
Between December 2006 and March 2009, payments totaling $117,817.07 also were made by RE1J to Computer Clarity, at Leatherwood’s request, according to the affidavit.
The civil complaint — penned by attorneys David A. Price and David M. Dodero of Grand Junction-based law firm Hoskin, Farina and Kampf — alleges that the district paid money to CCC and Computer Clarity for equipment and supplies that RE1J never received, and that either Leatherwood, Kacel or both ultimately received that money.
“Computer Clarity and CCC were operated as instrumentalities and alter egos of Leatherwood to steal money from the district by fraud and deception,” the complaint states.
A hearing has yet to be set in the civil matter.
Superintendent Tredway noted that the district has filed an insurance claim for theft. RE1J is covered for losses up to $500,000, he said.
Additionally, Tredway indicated that RE1J is in the process of hiring a company to conduct a district-wide “technology audit.” It’s expected to review not only technology that’s in place but also governance and management.
He said the district also has a new financial auditor working on its behalf.
“It’s not necessarily tied to this one incident, but it’s a brand new set of eyes,” Tredway explained.
RE1J receives a financial audit annually. Results are expected early next year.
(Will Shoemaker can be contacted at 970.641.1414 or firstname.lastname@example.org)