College Claims Fraud

The former chief fund-raiser for Humboldt State University apparently fabricated more than $15 million in gifts to the school over three years and pocketed $69,000 by filing false expense reports, according to university officials and a recent audit.

John Sterns, Humboldt State’s former executive director of university advancement, has admitted much of the wrongdoing, according to the audit, which was released July 26. Sterns, who was put on administrative leave in March, declined to comment Wednesday.

The audit capped a four-month investigation that found wrongdoing by Sterns almost from the moment he arrived on the rural Northern California campus in July 1998.

Characterized by university officials as exceptionally bright and personable, Sterns, 39, is alleged to have submitted fraudulent travel, entertainment and business expenses from 1998 through last February, detailing meetings and meals that never took place.

Even more significant, in the eyes of university officials, Sterns “grossly overstated” his fund-raising successes, the audit states, to the tune of millions of dollars.

As a result, university officials said Wednesday, Humboldt State received national recognition for its fund-raising efforts, at one point winning an award from a national education association.

The university also printed glossy brochures touting its gains and noting that the results were nearly double the national average. The auditors chastised Humboldt State officials for failing to exercise sufficient oversight of Sterns and for ignoring many “red flags.”

University officials disagree, in part.

“Our feeling is that we did respond to the red flags. We did take action,” said Don Christensen, who was Sterns’ supervisor as the university’s vice president of development and administrative services.

“But if the auditor is saying we should have taken it further because there were signs here of a greater malignancy, I guess that’s true,” Christensen said. “We never suspected how deeply he was involved in wrongdoing.”

Sterns was placed on leave after officials found that he had falsified a claim for a meal reimbursement. He had submitted his resignation a month earlier, telling superiors he had been offered a job at a Sacramento art museum.

Humboldt County Dist. Atty. Terry Farmer said Wednesday that his office has opened an investigation into the case but has not decided whether to file charges.

Sterns appeared to be phenomenally successful. In 1998-99, the reported private support for Humboldt soared to about $6.5 million, from less than $2 million the year before. The next year it nearly doubled, to $11.5 million.

But the university’s foundation recorded far less, about $3 million in 1998-99 and about $1 million the following year.

Sterns also endeared himself to faculty members, coming up with money for long-delayed projects, apparently by transferring funds from accounts inappropriately and then fabricating a donation to cover the transfers, officials said.