A woman who supervises state tax refunds was arrested over the weekend, charged with authorizing more than $5 million in phony tax refunds for her boyfriend and another friend.
Michelle Cawthra, 30, a supervisor in the Colorado Department of Revenue’s Taxpayer Service Office, is being held in lieu of $10 million bond. Also arrested was one of the alleged recipients of the phony refunds, Andre Holliday, 42.
Holliday owns a high-end clothing store in North Cherry Creek, Clothing by Andre, located at Third Avenue and St. Paul Street. Holliday also is being held in lieu of $10 million bond.
An arrest warrant has been issued for Cawthra’s boyfriend, Hysear Don Randell, 40, who allegedly received some of the refunds and who remains at large.
According to an arrest-warrant affidavit, state revenue workers became suspicious earlier this month about a series of tax refunds made to Holliday. The refunds were given final approval by Cawthra. Workers recognized Holliday’s name as a friend of Cawthra’s boyfriend.
After searching state business registrations, investigators found that Holliday owns the clothing store. State employees recalled Cawthra telling them that she purchased many of her clothes at the store. Further investigation found that Randell had ties to the store as well.
Investigators learned that Randell also owned a company, DAT Entertainment, which, according to its website, has interests in films, sports and fashion. The fashion portion on the website lists the store, Clothing By Andre, with a photo and biography of Andre Holliday. Holliday claims to provide clothing for Avalanche player Joe Sakic, Detroit Pistons player Chauncey Billups and others.
Holliday, on his website, writes that two of his friends, Avalanche player John-Michael Liles and former Avalanche player Dan Hinote, provided financial backing and support for his store, which he opened in the summer of 2005. Neither player could be reached for comment.
According to the affidavit, the store had not filed tax-withholding statements for the years 2002 to 2005, for which refunds were made. Nor did Holliday or Randell claim any withholding taxes that would qualify for refunds in those years, the affidavit states.
Roxy Huber, executive director of the Department of Revenue, issued a statement: “When department employees first discovered procedural irregularities, we immediately contacted the appropriate authorities and launched an internal review. The employee was placed on administrative leave, beginning Monday April 22. We are continuing to work with the Denver district attorney’s office as the investigation proceeds.”
Gov. Bill Ritter, advised of the investigation, praised state employees for acting swiftly and urged them to continue to cooperate with the investigation.
Tracking four of the refunds made to Holliday, investigators found that the requests for the refunds initially had been signed by two former revenue employees after they had left the department this year.
Another allegation is that Cawthra issued at least one refund in the name of her cousin, who worked for Cawthra temporarily last summer.
Finally, investigators learned that Randell had six accounts within the Department of Revenue and that erroneous transfers had been made to all of them, the affidavit states.
Total transfers authorized by Cawthra were $5,327,278, the affidavit states.
