Ex-Head of Legal Center Sentenced : Court: Judge orders man who embezzled $260,000 from Pacoima agency to pay $100,000 in restitution and to serve 21 months in prison.

The former director of a Pacoima legal aid center who admitted to stealing more than $260,000 to feed his gambling habit was sentenced to 21 months in prison Tuesday in the largest case of embezzlement of legal services funds in the nation.

James Steven Carroll, 41, was also ordered to pay $100,000 in restitution and serve three years probation by Los Angeles U. S. District Court Judge Stephen V. Wilson.

In an interview after the sentencing hearing, Carroll urged parents to warn their children of the dangers of gambling.

“They (children) are starting to get educated about drugs and substance abuse, but gambling is something they need to be educated about too,” Carroll said.

Carroll said he made his first bet at age 6 and that by the time he was a teen-ager he had a serious problem.

The San Fernando resident resigned in July of last year as head of San Fernando Valley Neighborhood Legal Services, after admitting that he had embezzled nearly $400,000 from the 26-year-old publicly funded agency that served about 12,000 poor people in the northeast San Fernando Valley last year.

Carroll returned $50,000 and agreed to work with authorities. He subsequently pleaded guilty to one count of theft of public money and two counts of theft from a program receiving federal funds. The three charges involved about $263,000.

Before receiving his sentence Tuesday, Carroll expressed remorse for his actions and told Wilson that he wanted to make amends for the anguish he caused the people he worked with.

“I’d like to say how deeply sorry I am for the loss I’ve caused to the program and community,” Carroll said. “I loved the program. I loved the people.”

Carroll also told Wilson that he had not gambled in the last 525 days, which is the longest he has gone without making a wager since he was a teen-ager.

Wilson expressed sympathy for Carroll.

“I hope you have the wherewithal to reconstruct your life,” Wilson said. “I hope you can find some strength and positiveness in this event.”

After his sentencing, Carroll broke into tears as he embraced his wife sitting in the courtroom. He is scheduled to surrender Feb. 18 and has requested he serve his term at the prison camp in Lompoc.

Carroll could have received as much as 30 years in prison and a $750,000 fine. In exchange for his guilty plea, however, prosecutors had agreed to recommend that he receive less than the maximum sentence.

Assistant U. S. Atty. Steven M. Arkow called it “a fair sentencing.”

Mark A. Gottesman, Carroll’s attorney, agreed. “I would have hoped he (Wilson) would have been more lenient, however, I can’t say the sentencing was unfair,” Gottesman said.

Gottesman had earlier asked Wilson to sentence Carroll to probation and place him in a community correction center where he could receive treatment for his gambling habit, which he said had impaired his client’s mental capacity.

“Our argument was that since he was a compulsive gambler that penalties such as this doesn’t detour addicts,” Gottesman said after the hearing. “Our argument was that extensive rehabilitation, counseling and community service does.”

Prosecutors alleged that Carroll, a 13-year-veteran of the legal center, deposited 13 checks intended for the center into a bank account he opened for himself in September, 1989. After his resignation, Gottesman said that his client gambled away most of the embezzled money on sports events and that he had been attending Gamblers Anonymous meetings regularly.

Neal S. Dudovitz, Carroll’s replacement as the center’s director, said that even after an insurance payment, the center remains short nearly $150,000 and is considering filing suit against Carroll for the money. While he described the prison sentence as fair, Dudovitz said he was disappointed by Wilson’s restitution order, noting that it will be split among four parties, including the insurance company.

“I’m very disappointed that the court would order anything less than full restitution,” Dudovitz said. “I feel very strongly that the money should be returned to Legal Services so that poor people can receive legal services they are entitled to.”

The center, which employs 22 attorneys and paralegals, has a $2.2-million annual budget funded primarily by the federal government. The center receives additional funds from the State Bar of California and county of Los Angeles through community development block grants.