The federal Justice Department’s Office of the Inspector General has publicly released an audit that led an American Canyon woman to plead guilty to stealing public grant money and trying to cover it up.
Claudia Humphrey, 62, was head of Fairfield-based nonprofit LIFT3 Support group that offered shelter and services to victims of sex assault, and domestic and dating violence. The Justice Department’s inspector general determined that Humphrey and family members, who filled key roles in the organization, used grant funding to pay for trips to Las Vegas, handbags, gasoline, groceries and clothing, according to the audit.
Prosecutors said she transferred more than $270,000 in grant funding into her bank account.
The audit ultimately led to Humphrey’s prosecution. In April, she was ordered by U.S. District Judge Troy Nunley to spend six months in prison and repay more than $70,000 of the public money that she stole. She was ordered to begin her sentence on May 23.
Auditors reviewed two grants from the Justice Department’s Office on Violence Against Women and two subgrants from the California Governor’s Office of Emergency Services that were awarded to LIFT3 between October 2011 to September 2014 for services in Solano County. That funding totaled $567,000.
The inspector general got involved in the case after LIFT3 employees reached out to the Office on Violence Against Women in June 2013 asking why it had placed a hold on grant funds. The hold, he wrote, meant that he and another employee had not been paid for weeks and victim services were interrupted.
LIFT3’s funding, however, was not on hold.
The Justice Department’s inspector general began looking into the matter after the Office of Violence Against Women visited LIFT3 in August 2013 and observed a lack of internal controls, poor financial management and undisclosed family relationships in the office — something that the office would have had to approve — according to the audit.
Humphrey gave $4,600 of LIFT3 money to her son for rent, $1,100 to her mother for a flooded apartment and day care, according to the audit. Two of her sisters kept LIFT3’s books and a third sister served as its associate executive director.
“We found the Executive Director’s (Humphrey’s) hiring of family members to be troubling, especially when we consider the roles these family members performed,” auditors wrote.
LIFT3 was required to track its expenditures, but its bookkeeping wasn’t consistent. The nonprofit’s own tax accountant called their accounting records “laughable” and “a mess,” according to the audit. The nonprofit’s funding streams were commingled with Humphrey’s personal expenditures, her other businesses and operations not related to the grant.
Humphrey said LIFT3 had “poor cash management with bad accounting records” and said she “was trying to do too much with too little,” according to the audit.
In all, LIFT3 and Humphrey had more than 14 bank accounts. Money was regularly transferred between them for cash flow purposes, according to the audit. She admitted to auditors that she didn’t know how many transactions in LIFT3’s banking records were personal.
Auditors repeatedly said Humphrey was not candid in many of her answers. For example, when asked why LIFT3 had so many accounts, Humphrey said the bank opened them without her consent, but she decided to make use of them. Auditors were later told by the bank that she personally opened all of them.
A review of LIFT3’s checking activity found 43 checks totaling nearly $57,000 were written to Humphrey and her family between October 2011 and December 2013, according to the audit. Checks were also sent to her church and a religious radio station.
Auditors asked Humphrey why banking records revealed so many transactions at hair and nail salons, among other places. She told them that clients were sometimes taken to get their hair or nails done for a pick-me-up, but former employees said they had never heard of such outings.
Fiscal impropriety aside, auditors determined LIFT3 did not further the grant programs’ objectives.
LIFT3 and Humphrey were suspended from contracting with the federal government and proposed for permanent debarment as of July 2019.