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Ex-Snow v.p. charged with fraud

Blackburn accused of obstruction of justice as well

EDITOR'S NOTE: The charges against Kimble Blackburn were expunged on November 8, 2012.

Former Snow College vice president Kimble Blackburn was charged Friday with 43 felony counts of fraud and obstruction of justice.

Sevier County Attorney R. Don Brown said the charges filed in 6th District Court "are just part of what we anticipate will be more charges to come in the future."

Blackburn was fired Jan. 2 as assistant vice president for finance and facilities at the Richfield Campus of Snow College.

A state audit report on the financial dealings at the campus said the concerns over potential fraud at Richfield may stretch back as far as 1988, were reported numerous times to top officials and were not only disregarded but at times punished with the person getting fired.

Scheduled for formal arraignment on April 1, Blackburn faces prosecution on 35 second-degree felony counts of communication fraud, seven third-degree felony counts of communication fraud and one third-degree felony count of obstruction of justice.

The charges stem from alleged activities from July 2000 to the present, Brown said, and involve an elaborate misappropriation of money highlighted in the preliminary findings of a state audit released last month.

Auditors found a complicated scheme of handling financial transactions that involved endorsing and cashing checks for the college without recording what had taken place.

The report said Blackburn allegedly misappropriated at least $194,000 during the 2 1/2-year period and was able to conceal the activity by intercepting receipts intended for the college and depositing them into the college account without recording the transaction in the college's ledger. Several years' worth of bank statements were also destroyed.

Among other findings, both the audit and charges reflect a fraudulent billing to the state for the construction of a hazardous materials storage building.

The Richfield Campus, as required by the state Division of Construction and Facilities Management, submitted a vendor invoice indicating $109,500 had been spent on the project.

The college received reimbursement of $99,900 from the state, but it turned out the invoice was falsely created, the audit said.

Auditors also found $27,240 worth of "personal and other questionable" charges Blackburn allegedly made with the college credit card, including a subscription to Golf Digest, satellite television charges not related to campus business and charges to bars, private clubs and restaurants in Salt Lake City.

Blackburn is one of three men accused in the audit of mishandling money. Sam Steed, campus physical facilities manager, and Carl Holmes, executive vice president of the Richfield campus, remain on administrative leave due to concerns raised in the audit, which said the campus environment established by management was not adequate to detect fraud but actually "conducive" to fraudulent activities.

Some instances of inappropriate use of public funds highlighted by auditors:

Personal trips to Beverly Hills, Seattle, Phoenix, Denver and numerous trips to Salt Lake City. Blackburn made 56 overnight trips during the audit period.

Of the 56 hotel charges on Blackburn's college credit cards, more than 96 percent exceeded the rate allowed by the campus travel policy.

Inappropriate vacation payouts to the executive vice president of more than $6,000.

A "retreat" for all employees of the Richfield campus for five of the past six years to Bryce Canyon or Mesquite, Nev., at an annual expenditure of $12,000.

Even after the audit pointed out Blackburn had "confessed" to the executive vice president, no action was taken to limit his access to accounting records, computer systems or financial bank accounts.

Calling it "serious fraud," Snow College President Michael Benson said a number of steps had been taken to institute more oversight, including the transfer of Richfield's financial systems — including payroll, accounts payable and purchasing — to the Ephraim location.

Both Nolan Karras, chairman of the Utah Board of Regents and Cecelia Foxley, the commissioner of Utah's Higher Education system, said administrative actions may be taken against other employees.

The audit and the criminal investigations, in the meantime, have been expanded to look at years prior to 2000.