PAIR SAY THEY'RE GUILTLESS IN FRAUD.

Byline: Patricia Farrell Aidem Daily News Staff Writer

A Valencia couple accused of faking a burglary to collect $119,000 in insurance money pleaded not guilty Thursday to felony fraud charges.

Charged after much of the missing property was found in their home, Thomas Terwilliger and Jennifer Stephen were ordered held on $75,000 bail after their arraignments on three felony counts each of fraud and grand theft.

The pair were arrested Wednesday while in court on unrelated fraud charges, said Detective Chris Christopher of the Santa Clarita Valley sheriff's station.

The burglary case goes back to Oct. 31, 1995, when the couple reported burglars had stolen $48,000 worth of surveying equipment, a $14,000 diamond ring, a special copier to print blueprints and other items, Christopher said.

The case was referred by their insurance company to the National Insurance Crime Bureau, an private investigative agency funded by the industry, Christopher said.

``They felt it was a little strange, some of the circumstances - the amount of the loss, they almost had too much documentation, some slight inconsistencies in their statements,'' the detective said. ``The investigators looked at it and looked at it again. Their investigator brought it to me and I did some follow-up.''

After the arrests, Stephen cooperated with investigators, turning over the diamond ring, actually valued at $9,000, Christopher said.

A search warrant at their Via Onda home netted the surveying equipment, which Terwilliger had bought from an Ohio company in a lease purchase that he never paid, Christopher said. Terwilliger reported to the company that it was stolen and that he had no insurance, the detective said.

Terwilliger already faced 10 felony charges involving earthquake repairs on his home. He did not pay for the repairs until contacted by sheriff's deputies, Christopher said.

Terwilliger is accused in that case of stopping payment on several checks, giving a false name in one case and refusing to pay for other work, claiming it was substandard, Christopher said.

Terwilliger was free on $130,000 bail in that case, but remanded to custody after Wednesday's arrest.

Christopher said Stephen is Terwilliger's girlfriend and his accomplice in the burglary case.