State Auditor Recommends Law Enforcement Review Judicial Department Employees for Possibly Illegal Activities

Several former State Court Administrator’s Office employees engaged in occupational fraud, apparently illegal transactions and misuse of public funds, the Office of the State Auditor found. The audit’s executive summary recommends four former employees be reported to law enforcement for further investigation. 


On Feb. 4, State Auditor Kerri Hunter sent Colorado Supreme Court Justice Brian Boatright the executive summary wrapping up a more than two-year investigation into fraud allegations against employees at the State Court Administrator’s Office, the administrative support office for state courts nested within the Colorado Judicial Branch. On Monday, Chief Justice Boatright sent a letter to all judicial department employees breaking down the report results. 

While the COVID pandemic certainly delayed the investigation, the people of Colorado have been well-served by the OSA’s careful and deliberative approach,” Boatright wrote in his letter to judicial department employees. 

In January, Boatright told members of the state’s Joint Judiciary Committee that several investigations into judicial department scandals will close this year and the results will be public. The executive summary is the first of several ongoing investigations into the Colorado Judicial Branch to be made public. 

The investigation found several former employees earned outside consulting fees while being paid by the judicial branch, that a fired employee who had leverage against others in the department received an extremely high severance sum and that a $2.75 million contract was improperly directly awarded to a former employee.  

Under Colorado’s Fraud Hotline statute, the state auditor is required to report the three cases to law enforcement since evidence of apparently illegal transactions or misuse of public funds was found. The results of the investigation do not mean laws were broken or criminal charges will be brought. 

On April 15, 2019, the Office of the State Auditor’s Fraud Hotline received an anonymous letter about employees at the State Court Administrator’s Office. The letter claimed that the State Court Administrator’s Office was misusing public funds and that several employees were committing Family and Medical Leave Act fraud, abusing paid time off and being paid but not working. 

Then-Chief Justice Nathan Coats asked the OSA in 2019 to launch an investigation with the full cooperation of the judicial department. 

In July 2019, the Denver Post reported that former SCAO Chief of Staff Mindy Masias was awarded a $2.75 million contract to provide staff training. The story raised questions over the apparent direct award and Coats asked the OSA to look into the contract as well. 

The OSA looked at more than 16,000 judicial department documents and interviewed 11 former and current employees. According to the summary, all judicial department employees cooperated fully with investigators. The investigation also reviewed publicly available information, documents from the National Center for State Courts and spoke with vendors who expressed interest in the 2019 training contract’s request for proposal. 

The state auditor’s office didn’t find evidence of FMLA fraud, but other allegations from the Fraud Hotline letter were substantiated. 

Masias and former Human Resources Division Director Eric Brown both worked for the National Center for State Courts while on the clock for the judicial branch, the investigation found. Brown and Masias were approved to perform outside work, but the judicial branch required that any outside work happen on personal time. The Office of the State Auditor compared NCSC billing records to identify days when Brown and Masias worked more than four hours for NCSC on top of eight hours for the state. 

Using that metric, the Office of the State Auditor estimated that Masias charged NCSC for 205 hours while being paid by the judicial branch, with 21 hours of work while she was on the clock and 184 hours while taking extended medical leave or other leave. Brown charged 686 hours, 643 hours while he was on the clock, 42 hours on leave and one hour on PTO. The executive summary reported that in 2018 Masias was paid $17,200 by the NCSC and Brown was paid $26,800. 

The auditors recommended Brown and Masias be reported to law enforcement. 

Auditors also found evidence that a former employee, named only in executive summary as “Employee #1,” leveraged information against Masias and Brown to negotiate the highest amount of severance and admin leave pay ever dished out by the Judicial Branch in 17 years. 

The former SCAO employee was placed on administrative leave in April 2018 after a disciplinary investigation was opened into the inappropriate use of information obtained through their position. They separated from the judicial department with 15 months of paid administrative leave and severance which totaled $143,000. The sum was the highest amount of separation compensation to a judicial department employee from 2000 through 2017, the auditors found. 

Masias and Brown were both involved in the investigation and settlement despite potential conflict of interest. Brown and Masias met with the employee without legal counsel on some occasions and acted against counsel advice during negotiations. Former State Court Administrator Chris Ryan was involved in negotiations as well. The auditor pointed out that Ryan could have neutralized the influences of Brown and Masias but found evidence that Ryan was a personal friend of the former employee and disregarded counsel advice to offer a lower settlement. The auditor recommended that all four parties — Masias, Brown, Ryan and the former employee — be referred to law enforcement. 

Twenty days after Masias resigned from chief of staff in 2019, she signed a contract to provide leadership training to the judicial branch through her company The Leadership Practice. The year before, Masias was investigated by the SCAO and then negotiated a resignation agreement for $19,400 to be paid through March 2019. The audit found evidence that Masias had potentially damaging information over sexual misconduct, discrimination and other misconduct by judicial branch staff and judges. 

Before she left the judicial branch, the auditors found evidence that employees discussed contracting Masias for leadership training services. 

The request for proposal for the five-year, $2.5 million contract was unusually prescriptive. The audit found that Brown may have been involved in tailoring the narrow requirements. Although 24 bidders looked at the RFP, no vendors submitted proposals, with some interested parties telling investigators that the narrow requirements were either too prescriptive or seemed to be written for another firm. 

With no other candidates, the contract was awarded to Masias. In the sole-source justification, Brown did not explain why only Masias met the judicial branch needs or why other vendors wouldn’t work. For the contract, the state auditor recommended Masias and Brown be reported to law enforcement. 

The judicial department terminated its contract several months after the Denver Post article and Masias has not been compensated for any work under the contract. The executive summary also noted that the judicial branch has expressed that it will not voluntarily pay any outstanding invoices from the contract, including $133,000 for services within the contract’s first months. 

Two firms are also actively investigating the contract award as well as allegations of sexual harrasment and misconduct in the judical branch first reported by the Denver Post.

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