The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Tuesday, September 27, 1994            TAG: 9409270294
SECTION: FRONT                    PAGE: A11  EDITION: FINAL 
DATELINE: ALEXANDRIA                         LENGTH: Short :   43 lines


Three top former executives at United Way of America, including the longtime president, will stand trial together in February on charges they looted more than $1.5 million from the charity, a federal judge ruled Monday.

William Aramony has pleaded innocent to charges that he diverted United Way money to buy such things as a New York City apartment for his girlfriend.

Aramony, 67, United Way president from 1970 to 1992, faces a jury trial Feb. 27 in U.S. District Court. The other men, who were close Aramony associates, also pleaded innocent.

Aramony, Stephen J. Paulachak, 49, a United Way executive from 1971 to 1988; and Thomas J. Merlo, 63, the charity's chief financial officer from 1990 to 1992, were charged in a 71-count indictment released Sept. 13.

The three are free on $25,000 personal recognizance bonds.

Some of the money was allegedly spent on the apartment, a Coral Gables, Fla., condominium, a vacation to London and Egypt, and a lifetime pass on American Airlines.

Aramony's girlfriend, identified in the indictment as Lori Villasor, allegedly received some money but has not been charged.

The indictment charged Aramony, Paulachak, Merlo and a spinoff company Paulachak headed with conspiracy to defraud United Way, mail fraud, wire fraud, interstate transportation of fraudulently acquired property and money laundering.

Aramony, Paulachak and Merlo were accused of filing false personal and corporate tax returns and Merlo was charged with perjury.

Aramony was ousted in 1992 when the allegations surfaced and former Peace Corps chief Elaine L. Chao took over as president. ILLUSTRATION: Photo

William Aramony

by CNB