Probers Accuse Terrigno of Embezzling U.S. Funds

Valerie Terrigno, an avowed lesbian who became the first mayor of West Hollywood, was indicted Wednesday on charges that she embezzled nearly $11,000 in federal funds when she operated a now-defunct counseling agency in 1983 and 1984.

The 14-count indictment returned by a federal grand jury in Los Angeles alleges that Terrigno, 32, “knowingly embezzled and converted, for the benefit of herself and others, federal funds which were intended to help the poor and homeless in the Los Angeles area.”

Assistant U.S. Atty. Richard M. Callahan said Terrigno, who still sits on the West Hollywood City Council, gave some of the money, earmarked for the Crossroads Counseling Service in Hollywood, to her friends, and used other funds to pay rent on her apartment and to buy clothes for herself.

During a press conference in a Santa Monica park near the office of her attorney, Howard Weitzman, Terrigno said: “I’m denying all the charges. I’ve not embezzled any money.”

Appearing slightly flushed but calm, the councilwoman said she is “somewhat saddened to see the U.S. government single me out for prosecution. I’m sure they can’t know all the facts.”

She said she intended to remain a council member and added, “I believe our system of justice is effective and I will be vindicated.”

As did his client, Weitzman suggested that Terrigno had been targeted for prosecution in part because of her sexual orientation and because of West Hollywood’s image as a city of gays.

Crossroads opened in 1981 primarily to

work with Hollywood’s poor--particularly homosexuals--looking for jobs or shelter.

In one instance, according to the indictment, Terrigno issued a $510 agency check to a friend, Jay Jay Vega, who did not work for Crossroads. Vega allegedly cashed the check and gave $310 to Terrigno for her own use.

Terrigno also used her position to illegally issue four additional payroll checks, totaling about $2,300, to herself, authorities said.

Terrigno allegedly bought $5,000 worth of food coupons with money allocated by the Federal Emergency Management Agency. Instead of giving the coupons to the poor and the hungry, she “issued most of these coupons to herself and her friends in order to purchase food and drinks for personal use,” Callahan said.

The indictment followed a seven-month investigation into the finances of the Hollywood agency, which closed last December after its federal funding contract expired.

The existence of the federal probe had been known for many months. During West Hollywood’s first council campaign, in the fall of 1984, Terrigno referred to her experience at Crossroads on her political resume, saying it had “helped thousands of Hollywood and West Hollywood residents find food, shelter, counseling, transportation and jobs--bringing $10 million of additional income to our community.”

In the waning days of the campaign, however, several of Terrigno’s political opponents began circulating photocopies of federal Internal Revenue Service audits and other documents that they claimed showed Terrigno’s financial mismanagement of Crossroads accounts.

At West Hollywood City Hall on Wednesday, city spokeswoman Helen Goss said, “This is not a city matter and does not affect Valerie Terrigno’s position as a City Council member. We expect Valerie and the City Council to work together on behalf of the city of West Hollywood.”

The city’s position, Goss added, “is that everyone is innocent until proven guilty.”

Terrigno is due to appear for arraignment in Los Angeles federal court on Nov. 4.