Trial Witnesses: City was cheated

By John O'Brien

Witnesses told a jury yesterday how a former executive director of Staten Island Children's Council cheated the city out of thousands of dollars, by not paying rent on leased property and by signing her name to council checks to pay for shoes, trips and booze.

After two years of hearings and motions by attorneys, the trial of Denise Pedro began yesterday with a complex examination of a lease she signed for property at 73 and 75 Victory Blvd., once rented by the Children's Council.

The council is a not-for-profit group that receives city funding to provide day care services to poor families.

The council is also an umbrella group for counseling, mental health, physical therapy and other programs targeting youngsters.

Testimony was heard from former Children's Council interim board chairwoman Catherine Mudd, who said she returned from vacation in February 1997 to learn that Ms. Pedro had eliminated her position on the board and had replaced the other board members.

Ms. Pedro was arraigned on April 3, 2000, and charged with scheming to defraud the city Administration of Children's Services (ACS).

She is also charged with numerous counts of grand and petit larceny and criminal possession of forged instruments - checks belonging to Cosco Management Co., which is owned by her former husband, John Carter.

Assistant District Attorney Louis C. Annunziata called to the stand Nicholas Panagiotopoulos, the owner of the Victory Boulevard property, who testified Ms. Pedro signed the lease and monthly rent checks on behalf of the Children's Council.

The landlord said he filed a lawsuit in 1998 against Ms. Pedro and the Children's Council to collect back rent of about $46,000, but was able to recover only a portion of that.

Authorities have alleged that the city funded the Children's Council rent and the Ms. Pedro illegally diverted that money to pay for out-of-state trips, liquor and shoes, accusations that have not yet come up in the trial.

Under direct examination by Annuriziata Panagiotopoulos gave conflicting testimony at different times. He first said he received a judgment in Staten Island Landlord-Tenant Court for $36,000 in back rent on the Victory Boulevard property, then said he received a settlement for $10,000.

Finally, after re-cross by Ms. Pedro's Brooklyn attorney, Mark Pollard, and re-direct by Annunziata, a somewhat exasperated Panagiotopoulos cut to the chase and said, "Look, I was owed $46,000, the settlement was $36,000, the lawyer got $10,000, and I received $26,000."

The lease on the property expired in 1997 after the Children's Council had rented it for 10 years.

Annuziata told the court he would bring Panagiotopoulos' lawyer to the stand at a later point in the trial for a full accounting of the lawsuit.

In January, the Children's Council was evicted from The Whitney M. Young Day Care Center at 120 Stuyvesant Pl. after it fell more than $50,000 behind in rent payments.

Executives at the city-subsidized day care center said they were short of funds because the city inexplicably decided not to renew the center's contract and has offered no funding since June.

When Ms. Mudd took the stand, she said she held no animosity against Ms. Pedro, but was "disappointed with her based on the fact that [she] trusted her and [Ms. Pedro] was not open and honest."

Ms. Mudd later referred to 15 cashed checks belonging to the Children's Council that were submitted into evidence by Annunziata. On those checks, which totaled about $12,000 and were all made out to Capitol One, a credit card company, Ms. Mudd pointed out the apparent signature of Ms. Pedro.

The prosecutors hopes to enter into evidence proof that the Capitol One credit card account is a personal credit account established by Ms. Pedro and she that illegally paid her bills on the account using Children's Council money.

But Pollard maintains Ms. Pedro did nothing wrong by paying those bills because the money did not come from city coffers.

On the contrary, insisted Pollard, the money used by his client may very well have come from private donations made to the Children's Council and the credit card was an extra perk to supplement her $60,000-a-year salary.

In his opening statement, Pollard charged that "the evidence is clear that Staten Island Children's Council received money from the city as well as thousands upon thousands of dollars from private groups."

The Staten Island Children's Campaign, which is sponsored by the Advance, has contributed several thousand dollars to the council in the past.

Ms. Mudd said in earlier testimony she did not recall the Children's Committee receiving private donations while she served on the board.

Pollard also claims that, "while the rules may prohibit certain things, the use of privately donated funds is not the same. No expenses by Ms. Pedro were done without approval."

Ms. Pedro was suspended in April 2000 from her job as executive director, which she had held for 14 years.

The trial is to continue at 2 p.m. today in state Supreme Court, St. George, Justice Philip Minardo is presiding.