High Plains was the first of what was to become a string of Rebound facilities in Colorado. The company also runs a 120-bed juvenile facility in Ramah, about forty miles east of Colorado Springs, for which it gets more than $2 million annually from the state Division of Youth Corrections. Camp Falcon, a boot camp in Pueblo for eighty boys, also bills the DYC about $2 million per year.
Rebound hammers home the point that it saves taxpayers money. DYC officials say that it's true that Rebound and the other private contractors provide services for an average of about $10 per day less than the state--$139 compared with $148. But state budget analyst John Gomez says what those figures don't show is that the private companies can refuse to accept youths, such as those with severe mental disabilities. Those harder-to-treat cases drive up the state's average cost. "The bottom line is the state has no choice," Gomez says. "We have to take those kids."
High Plains has been a successful business venture for Sterman. He has made bond payments on time, and records obtained by Westword show that High Plains has paid substantial management fees to Sterman or his companies through the years, although the totals are unclear.
Not all of his ventures have been so successful. Sterman is fighting off attempts by Xerox and another lender to get back much of the money he owes on a long list of projects from around the country, including a hotel in Aurora.
Sterman has been battling Xerox since 1992, and court records indicate that sometimes the fight has taken strange twists. He said in one filing, "I have been told that they [the Xerox partners he owed money to] believe that I represent the Devil and that, in fact when they saw my fax number, 266-6666, this signalled my death knell."
A federal court in Massachusetts that is keeping tabs on Sterman's income as part of a suit filed by Xerox ordered him to live on $10,000 per month. But after evidence was presented that showed he was counting such things as his wife's Mercedes payments as a business expense, the court found Sterman in contempt and cut his allowance to $3,000 per month.
In that ruling, the judge wrote that Sterman "has orchestrated a mind-boggling array of transactions among several corporations under his control in an effort to keep his various business undertakings afloat and to avoid his creditors (or at least those creditors he does not like). Rarely has a more tangled web been woven."
Sterman couldn't be reached for comment, but O'Shaughnessy says that Sterman is not involved in the day-to-day operations of Rebound and that his financial dealings in other arenas have nothing to do with the company.
Shenanigans are a regular occurrence elsewhere in the Rebound family. In June a group of AIC boys went on a rafting trip at Rancho Del Rio outfitters, near Kremmling. Left unsupervised for a few moments, the boys stole $50 and some cigarettes and scared the wits out of a fourteen-year-old local girl who had been minding a small convenience store at the time.
Rebound officials made the boys return the money and the cigarettes. The Eagle County Sheriff's office says it has no record of the incident. Rebound officials call it "a learning experience."
Former employee Ellen Rincon-Pruitt remembers an incident in 1995 in which some of the boys at AIC claimed a staff member hit them. She took the complaints to Rebound vice president Joe Newman and says he fired the guy but refused to report it to social service agencies because the employee threatened to contest the firing, a battle that could have racked up legal bills for Rebound.
"I categorically deny that," says Newman, "and in fact I get criticized because sometimes I'm too aggressive in reporting these incidents." Some ex-employees claim that Newman went to state officials with false allegations about employees who badmouthed Rebound. Newman denies that, too.
At other times, some ex-workers say, the company has tried mightily to put a good face on situations.
Rob Pearson recalls that when he was a teacher at AIC, Rebound CEO Jane O'Shaughnessy suddenly showed up in July, 1996, before a scheduled state audit.