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Home arrow News arrow Documents detail possible theft of more than $400K from school district
Documents detail possible theft of more than $400K from school district Print
Written by Seth Mensing   
Wednesday, 18 September 2013
No charges filed, but main suspect is already serving time

Since the Gunnison Watershed School District fired Cannon Leatherwood as its Information Technology (IT) director and notified police of possible theft from the school district last month, investigators and school officials have been busy trying to piece together what happened and how.


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It hasn’t been an easy process, and if it hadn’t been for a lucky break in the district administration’s copy room, the district might not have known anything was happening at all. But once the first piece of the mystery fell into place, the details of what looked like an elaborate scheme to steal hundreds of thousands of dollars from the school district, and the taxpayers who support it, started to take shape.
According to investigators’ accounts detailed in court documents, the take was more than $400,000. The investigation is ongoing and no charges have yet been filed in the case but court documents show police are compiling quite a story.
That trail of clues started on July 24, when, according to the court documents, an employee of the school district administration office walked into the copy room and found a piece of paper that might have, on any other day, been disregarded or just put to the side. But it wasn’t and upon inspection, the employee saw that the piece of paper was a check deposit stamp for Colorado Computer Consultant, LLC, a technology vendor the district works with.
On the back of the check, “For Deposit Only Colorado Computer Consultants” was written, with reference to a bank account in North Carolina. It seemed odd to the employee, court documents say, that a vendor would have been in the administration copy room, so she gave the check deposit stamp to district business manager Stephanie Juneau. And then the house of cards started to fall.
Juneau researched the company with the Colorado Secretary of State and discovered the person identified as establishing the firm in March 2010 was Richard Cannon Leatherwood, the district’s IT director. Further investigation showed the school district had been sending checks to the company at a Crested Butte post office box.
The company was a middleman between big technology companies, like Dell or Apple, and the district. It’s not an uncommon relationship for the district to have, as it often relies on intermediaries to buy products in bulk or find the best price in a market that school administrators only occasionally wade into.
When Juneau started to dig, she found paid invoices to Colorado Computer Consultants that dated back to 2010; all were presented by Leatherwood for products purchased for the school district through the company.
Juneau admits this arrangement slipped past three business managers, two auditors and four superintendents without detection. Now the district is trying to find ways to make sure this kind of thing doesn’t happen again.
But it’s hard to figure out what and how this happened, Juneau says, since Leatherwood was the director of his department and had limited oversight as long as he stayed within his budget. And he always stayed within his budget.
Once the arrangement was discovered, however, Juneau was able to quickly provide investigators with 11 invoices from Colorado Computer Consultants from the seven months between November 2012 and June 2013. Altogether, after further research, investigators found that between March 2010 and July 2013, the district paid Colorado Computer Consultants $411,147.50.
According to the affidavit filed in Gunnison County Court on Monday, September 16 as part of a court order requested by investigators, IT technician Ron Musick worked under Leatherwood for seven years, moving department packages into the inventory and installing technology around the district. In those seven years, Musick had never seen any items purchased from Colorado Computer Consultants.
Musick told police he hadn’t heard of the company until school district superintendent Doug Tredway asked him about it. Musick said when he tried to verify a few of the FedEx tracking numbers that were on the invoices, he found they were too old to track or not valid. He also said the items purchased from the company were pieces of equipment the district would have been more likely to buy directly from a manufacturer, like Dell, than through a middle man.
A week after the check deposit stamp was discovered and with the suspicious invoices in hand, Tredway, who took over as superintendent this summer, confronted Leatherwood about Colorado Computer Consultants. Leatherwood put Tredway in contact with Chris Hunter, who he said was one of the company’s owners, but refused to give any information about the company’s dealings with the district or his own relationship with Hunter.
Already, through cell phone records and information from the account where the school district deposits Leatherwood’s paycheck, police have identified a second bank account Leatherwood had in San Antonio and phone records that showed a call from Leatherwood to Hunter in June 2013.
But Gunnison police, who are handling the investigation, still hadn’t heard Leatherwood’s side of the story. The first time investigators spoke with him, Leatherwood was at the Gunnison County Jail, where he was checking in as part of a 150-day work-release sentence for a driving under the influence conviction he received in Denver County.
Leatherwood told investigators he had started working with Colorado Computer Consultants in 2003 and that his dealings with them faded away after he moved from his job at Citadel Communications in Colorado Springs to the RE1J school district. He said he reconnected with the company only in 2010 or 2011 after Gunnison County voters approved a 2008 ballot question issuing the school district $55 million in bonds for use in renovations and technology updates. Leatherwood said he reached out to Colorado companies to keep the bond money in the state, the affidavit says.
Leatherwood’s annual IT budget, which was managed separately from the bond funds, averaged $265,000. This year it’s down to just over $172,000.
As is district policy, purchases like those made by the IT department are made only through distributors that have been vetted, in this case by Cisco Systems, a prominent network technology company. In court documents, investigators say they found a stamp for the “platinum” level of Cisco certification on invoices from Colorado Computer Consultants. However, according to those same documents, when investigators called Cisco, there was no record of the company in their database and Cisco denied any working relationship with Colorado Computer Consultants.
Despite the evidence connecting him to what looked to police like a suspicious company, Leatherwood insisted he wasn’t involved to the degree that was being suggested.
When asked by investigators if he knew who owned and operated Colorado Computer Consultants, Leatherwood told the investigator that’s the “thing we are hung up on.” He then said he couldn’t explain why his name and address were on the company’s founding documents. When asked if he had anything to do with the company, he said, “Not directly.”
When confronted with the Crested Butte connection, where the company maintained a post office box, Leatherwood told investigators that Hunter had opened a storefront in Crested Butte “briefly,” around Third and Belleview, with hopes of servicing Salida and Montrose. According to court documents, Leatherwood said he didn’t frequent the store in Crested Butte, but did his business with the company by phone or email.
After investigators reached out to the Crested Butte Marshal’s Office with a request for information about the post office box and the business, the marshals confirmed that the post office box was leased to Leatherwood and the physical address on record matched the one where he lived in Gunnison.
Investigators also discovered that Colorado Computer Consultants had never applied for a business license with the town.
When investigators flatly told Leatherwood that people were alleging the company was “bogus” and asked if he was using it to funnel money away from the school district, the affidavit says Leatherwood “thoughtfully paused and replied ‘no.’”
By the time investigators met again with Tredway on August 5, the superintendent had gone through Leatherwood’s office and found personal tax information, as well as a file folder labeled “CCC” that contained business documents related to Colorado Computer Consultants, including an ATM card with both the business name and Leatherwood’s name on it.
The file also contained tax and wage withholding documents from the state with Leatherwood’s name on them, documents from LegalZoom.com regarding the establishment of a limited liability company and a letter from Bank of America congratulating Leatherwood on opening his new business account.
Also among the documents were business registration forms and an operating agreement that listed Leatherwood as the company’s president and sole capital contributor, with a contribution of $25,000.
Tredway provided investigators with these files, as well as torn papers he had found in Leatherwood’s trash. Among them were two checks from Colorado Computer Consultants: one to Leatherwood for $4,000 and another to his wife for $5,000, although the latter check had been voided. Tredway also found a check from Colorado Lucky Dog to Colorado Computer Consultants for more than $2,000.
There was more. On each of the invoices the district and investigators had amassed throughout the investigation, Tredway noticed the website computerclarity.com listed. Juneau researched the business name and found it connected to Leatherwood’s father, Wilton Charles Leatherwood of Colorado Springs.
After looking through district records, Juneau discovered more than $117,000 in invoices paid to Computer Clarity between December 2006 and March 2009. All of the invoices were requested by Leatherwood. Then Juneau found Computer Clarity invoices for another $85,180 from between May 2009 and December 2009. In all, there were 23 invoices paid without any proof of services rendered.
Investigators are currently in the process of serving court orders to obtain financial information that would let them follow the money from the district to wherever it has gone and fill out the picture of what actually happened.
Juneau said through the judicial process, if charges are filed and a conviction is made, the district could have the opportunity to seek restitution.
Gunnison police are waiting to see the information gleaned from the court order and follow the trail as far as they can before officially filing charges. Leatherwood, in the meantime, isn’t going anywhere. Since being fired from the school district was a violation of his work-release agreement, he’ll be serving out his 150-day sentence in Denver County Jail, with his release scheduled for the end of the year.

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