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With a civil suit filed alleging misappropriation of funds at the Art Gallery of Calgary, its former president and CEO is out of her next job too: Valerie Cooper will not be taking over as general manager at the Rotary Centre for the Arts in Kelowna, B.C. next month as previously announced.

"After further discussions between KVPACS [Kelowna Visual and Performing Arts Society]and Valerie Cooper, KVPACS has withdrawn its offer of employment, and Ms. Cooper has advised KVPACS that she cannot accept the position of General Manager of the RCA," read a statement released Friday by Steve Faigan, president of the society's board of directors.

The Art Gallery of Calgary Society has launched a civil suit against Ms. Cooper, alleging she filed falsified expense claims totalling nearly $500,000.

According to the statement of claim, filed in Calgary Court of Queen's Bench on March 30, the expenses in question include $89,250 that are alleged to have gone toward rent for Ms. Cooper's rental accommodation in downtown Calgary; $66,978 for travel expenses that were not approved by the AGC's board of directors; and more than $19,000 worth of goods and services not approved by the board, including frequent massages, clothing, monthly parking and credit card fees.

The court documents show Ms. Cooper was placed on paid administrative leave March 13, after police informed a board member that they were conducting an investigation into possible defalcation of funds at the AGCS. The society then launched an internal audit, which it alleges determined that since 2006, Ms. Cooper had systematically falsified expense accounts to the sum of $497,586. Ms. Cooper had been running the gallery since 2004.

None of the allegations has been proven in court, and The Globe and Mail was told Friday that a statement of defence had not been filed.

Lawyer Kenneth Reh, who filed the suit, declined to comment on Friday, as the matter is before the courts.

The Calgary Police Service said the matter was being handled by its economic crimes section. "There is an active investigation and to maintain the integrity of the investigation, that's all we can say at this point," said spokesperson Emma Poole.

The AGC's communications manager, Nisha Sridhar, declined to comment on Friday. "The matter is in the court and we are not commenting [about] anything," she wrote in an e-mail to The Globe.

With a report from Nathan VanderKlippe.

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