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Senator's wife charged with theft
Accused of looting nonprofit group
Friday, August 15, 2008

HARRISBURG -- The wife of state Sen. Gerald LaValle was charged yesterday with stealing thousands of dollars from a Beaver County nonprofit group she ran for 20 years.

Darla LaValle, 68, of Rochester, inflated her salary and pension as executive director of the Voluntary Action Center without her board's permission and denied benefits to its employees from 1993 to 2007, according to a criminal complaint filed yesterday.

The Voluntary Action Center helps low-income residents of Beaver County by distributing donations of toys, furniture, clothes, food and medical equipment.

In the last several years, the agency has received thousands of dollars in government funds -- some distributed through Beaver Initiative for Growth, a now-defunct grant clearinghouse whose sole board members were Mrs. LaValle's husband and former state Rep. Mike Veon.

Tax records show that the agency received $220,000 in government grants in 2005 and $99,900 in 2006, the latest year for which records were available online. Income from private donations and fund-raisers brought each year's revenue up to roughly $300,000.

In past years, other funding came from the United Way, which reduced its share by 70 percent, to $12,000, between 2000 and 2004 because it was concerned that Mrs. LaValle's salary -- $78,000 at that time -- was double what is standard for directors of similarly sized nonprofit agencies, according to a grand jury presentment that led to the charges.

In response, Mrs. LaValle said her agency was "financially healthy" and recommended that her board of directors cut ties with the United Way, "ultimately [clearing] the way for Darla LaValle to pay herself as she saw fit," according to the presentment.

A month later, the agency was operating in the red while Mrs. LaValle drew a higher and higher salary, relying in part on loans Mr. Veon helped the Voluntary Action Center obtain. She was paid $102,077 in 2005 and $122,343 in 2006. She also was paid $23,296 between January and her retirement in March 2007.

According to the grand jury, Mrs. LaValle arranged for the Voluntary Action Center to contribute to her pension in excess of the 7 percent approved by the board. While she inflated her pension by at least $30,000, she is alleged to have deceived the agency's two other employees -- including her sister, Judy Berresford, who was working as its secretary -- by telling them they were not entitled to benefits or pensions.

The center's current and former board members told the grand jury they put their complete trust in Mrs. LaValle, regularly signing blank checks for her use. They testified that they did not know how much she paid herself until agency audits in 2005 and 2007.

A year ago, after the agency hired an outside compensation consultant, Mrs. LaValle repaid $91,324 to the Voluntary Action Center, but the grand jury indicated the restitution wasn't enough.

"While this amount repaid some of the excess salary and excess pension benefit she took in 2005, 2006 and 2007, it failed to restore the total sums stolen and completely neglected the pension thefts from 1993 to 2004 or her misappropriation by failure to pay into the other employees' pension plans," the grand jury said in its presentment.

The grand jury said Mrs. LaValle placed the center at risk of having to pay back taxes on thousands of dollars because nonprofit agencies are required to justify salaries of more than $50,000.

"All of the monies collected ... during the relevant time frame could become taxable and the agency would be liable for that amount," according to the presentment.

Mrs. LaValle was charged with four counts of misapplication of entrusted property and property of government, two counts of theft by unlawful taking, two counts of theft by failure to make required disposition of funds and two counts of theft by deception. If convicted on all counts, she faces a maximum sentence of 70 years in prison, $105,000 in fines and loss of her state pension.

She surrendered yesterday and was arraigned before Ambridge District Judge Mark Schulte, who released Mrs. LaValle on her own recognizance.

The LaValles' home phone number is not listed, and Mr. LaValle did not respond to messages left at his district office and in his Senate e-mail.

Mrs. LaValle was executive director of the Voluntary Action Center from 1987 to 2007, when she retired.

Her husband is soon to retire from the state Senate after an 18-year legislative career.

The grand jury that issued the presentment against Mrs. LaValle also has been investigating a government corruption scandal in the state Capitol. That probe, which involved the work of two grand juries, has resulted so far in the arrests of 12 current and former House Democratic lawmakers and staffers who are accused of illegally diverting tax dollars to political campaigns. Mr. Veon is among those charged.


Correction/Clarification: (Published Aug. 18, 2008) Darla LaValle, who is facing charges for mishandling money at the Voluntary Action Center in Beaver County, left the agency in March 2007. An incorrect date was used in this story as originally published Aug. 15, 2008.
Tracie Mauriello can be reached at tmauriello@post-gazette.com or 1-717-787-2141.
First published on August 15, 2008 at 12:00 am
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