Sternat pleads guilty, sentenced to jail
When the defense attorney called it "a sad, sad day," it was a pretty fair guess everyone in the courtroom agreed --- especially the former River Falls alderman, past chamber of commerce president and accountant who had just pleaded guilty to felony theft.
Pierce County Judge Robert Wing, who gave Harvey Sternat authority to supervise financial affairs for an ailing elderly widow two years earlier, said the accountant let down both the court and Millicent Christiansen.
A trial set to begin Feb. 7 was canceled, and a plea hearing became a sentencing hearing as Sternat, 61, pleaded guilty to one count of theft. A second count was dismissed and he was sentenced to six months in county jail and five years probation.
Sternat also handed over a check for $150,000 as restitution for money he allegedly took from Christiansen's bank account or her family's trust. Since investigators and Sternat don't agree on the fees he was entitled to pay himself, an outside attorney will determine if he owes more.
"In small counties, you have only a few people you can turn to," said Judge Wing, recalling the process that led him to appoint Sternat to oversee Christiansen's financial affairs.
At the end of an earlier civil suit involving Christiansen and her children, Wing said he felt he needed to put someone in charge who wouldn't be influenced by personal interests.
He believed Sternat was that person, but in the end Sternat disappointed both the court and Christiansen, said Wing.
"The felony conviction has a stigma for him that it really doesn't have for other people," said the judge as he went with the low end of District Attorney John O'Boyle's jail term recommendation. Sternat's lawyer Mark Gherty had suggested probation but no jail time.
The felony conviction means Sternat, who has spent his career managing finances, will be severely restricted, if ever allowed, to handle anyone else's financial affairs, said Wing.
Sternat was originally charged with stealing nearly $248,000 from the Christiansen bank and trust accounts.
Both sides agreed neither the documents that made Sternat one of the trustees of the Christiansen Family Trust nor the documents that gave him power of attorney for Mrs. Christiansen specified how his fees would be determined.
"This is a sad, sad day," said Gherty as he argued for a light sentence for Sternat, who has had "a long and respected reputation in the River Falls community."
Gherty said Sternat earned a bachelor's degree and a master's in business administration, and worked as an administrator in health care facilities in River Falls, Stoughton and St. Paul before opening his own accounting firm in River Falls. He joined Bauman Associates in 1993 and worked there until the theft charges were filed.
Sternat served on the River Falls City Council, is a past president of the chamber of commerce and was active in other civic organizations. He and his wife founded Have-A-Heart Inc., a non-profit facility serving individuals with disabilities.
"All of these accomplishments went out the window...with his arrest," said Gherty.
Gherty said Sternat admits what happened was his fault and he accepts full responsibility.
But, said Gherty, the documents appointing Sternat trustee and giving him power of attorney made no provisions for payment and Sternat did a lot of work without pay.
Gherty said Sternat was entitled to over $91,000 he took in fees earlier.
The defense attorney said that, while serving as trustee, Sternat negotiated the sale of property with Christainsen's son Kim, and Sternat felt he was entitled to a fee of two percent of the $6 million transaction.
"He believed the two percent fee was reasonable," said Gherty. But now, said the attorney, Sternat accepts he was mistaken.
"He knows he is in error and he didn't attempt to hide anything," said Gherty, indicating Sternat cooperated fully with police during their investigation and offered to pay back anything he had taken in error.
"He's attempting to make amends," said Gherty.
He said there are three things to consider when sentencing: the gravity of the offense, the character of the defendant and the need to protect the public.
Gherty said letters from members of the River Falls business community attest to Sternat's integrity.
"I don't believe the public needs protection from Mr. Sternat," said Gherty. Because of the charges, Sternat has lost his securities and insurance licenses, is on unpaid leave from his job and now is a convicted felon.
"How employable is he?" asked Gherty.
He said Sternat had a heart attack and bypass surgery 11 years ago. He takes heart medication and caries a bottle of nitroglycerin with him.
Gherty said 90 days in jail would be more than enough to get a message across and to punish Sternat.
The attorney read aloud a statement Sternat had written apologizing to the Christiansen family and the judge.
The letter said Sternat performed many duties for Christiansen and, at times, the obligation seemed like a part-time job. He said he met with her numerous times, found and reviewed a caregiver, was involved in rewriting her will and codicils, and negotiated with her son over the sale of trust property.
Sternat admitted he overstepped his authority, but said he never intended to harm Christiansen or her family.
"Sometimes people aren't always what they appear to be on the surface," said DA O'Boyle, outlining his understanding of the case.
"It's pretty clear that this is an exception and that nobody would expect this out of Mr. Sternat," said O'Boyle, who referred to letters to the court from people who have had long-standing business relationships with Sternat.
But, said O'Boyle, Sternat was in a position of trust and the case involves a significant amount of money. He said Sternat was reportedly a long-time friend of the Christiansens and the family placed a high level of trust in him.
"Whatever reason it happened, it doesn't matter. It clearly happened," said O'Boyle shoving aside excuses.
O'Boyle said that, in making his sentence recommendation, he took into account the $150,000 payment, but he would still have insisted on a felony conviction even if Sternat had paid back all the money.
Mrs. Christiansen isn't getting any younger, and it's important to get this money back to her while she is living, said O'Boyle.
He said while Sternat was entitled to reasonable fees, the amount he took went well beyond that and some jail time is necessary to underline the severity of the offense.
The criminal complaint implied much of the stolen money was spent at gambling casinos, but Gherty said Sternat doesn't concede gambling had any role in his actions.
Sternat was ordered to report to the jail at 9 a.m. April 6 to begin serving his sentence. He will have work-release privileges.
The maximum combined penalties for the two original felony counts could have been 20 years in prison and a $50,000 fine.