The Crested Butte News Serving the Gunnison Valley since 1999
Settles out of court for remainder of policy money lost in embezzlement case
By Aimee Eaton
The Gunnison Watershed RE1J School District has finally received full compensation from insurance company Zurich for a 2013 embezzlement case that cost the district more than $600,000.
Cannon Leatherwood, a former IT director at the Crested Butte Community School, was sentenced to 12 years in prison in June 2014 for his role in stealing $683,527 from the district through a series of fraudulent billings paid to a shell company he had set up.
At the time of the incident the district held an insurance policy in case of employee theft for $500,000 with insurance titan Zurich. After Leatherwood’s sentencing, Zurich paid the district only $380,000 out of that policy.
The school district’s attorneys then advised the district that it was eligible for the entire $500,000, a difference of $120,000. When Zurich was approached with this number the company refused to pay and the result was a lawsuit filed by the district.
“Zurich then filed a countersuit claiming they had paid too much money and we owed them money,” said school district business manager Stephanie Juneau. “We were scheduled for a jury trial in August 2016, but the judge reviewing the case called for mediation.”
In the first round of mediation, Zurich offered to pay the district an additional $4,000. That didn’t cut it, said Juneau. The district countered by asking for $650,000. Eventually, the two entities settled on $325,000.
“The $325,000 is the $120,000 left in the policy, plus our attorney fees over the last three years,” said Juneau.
The money from the settlement has been deposited into the district’s capital fund and will likely be put toward the technology budget.
“Since the money was originally stolen from technology, we will put it back toward technology and doing good things for the kids,” said Juneau.
With the lawsuit settled, the Leatherwood case is drawing to a close, with the one remaining issue being the trial of Leatherwood’s brother, who was also involved in the theft. There is currently a jury trial set for March 2017.
