SAN JUAN, Puerto Rico (AP) _ A series of sensational trials _ the latest alleging the embezzlement of $2.2 million in federal funds intended for AIDS victims _ have embarrassed Puerto Rico's leaders and outraged the most jaded of islanders.

This week, a key witness testified that he helped divert hundreds of thousands of dollars from the San Juan AIDS Institute to the campaigns of Gov. Pedro Rossello and other officials.

The politicians emphatically deny the charges, which some people believe could undermine chances that the United States might accept the Spanish-speaking island of 3.8 million people as the 51st state.

``I think the federal government has realized that they have a corrupt colony here,'' said David Noriega, a former lawmaker and independence activist who took the AIDS issue to federal investigators.

Misuse of federal funds is an especially charged issue in this U.S. territory, which pays no federal taxes but receives $10 billion from the United States a year.

The San Juan AIDS Institute _ approved by Rossello when he was city health director in 1987 _ received about $15 million before it folded in 1994. Five years later, institute coordinator Yamil Kouri and two others face charges in federal court that they diverted $2.2 million for their own use and other purposes.

For Luz Maria Torres, diagnosed with AIDS in 1990, the results were very personal indeed.

``I would go to the institute for AZT, but they usually had run out. There were no medicines, no doctors, no nurses,'' said the 47-year-old, who caught the virus from a drug-dependent husband.

``I have many friends who died because the institute had no medicine,'' she said. ``Those responsible should go to jail.''

The case became a sensation with this week's testimony from former institute comptroller Angel Corcino. He and several others _ including his son and brother _ already have pleaded guilty in the conspiracy.

His voice occasionally cracking, Corcino testified how a web of phantom companies was used to divert money to Kouri.

He said $250,000 went to Rossello's successful 1992 campaign; another $5,000 a month went to Rossello's rival, Hector Luis Acevedo of the Popular Democratic Party, after he became San Juan mayor; and a similar sum went to then-city Health Director Pedro Alfredo Borras.

Kouri's attorney, Benny Frankie Cerezo, says Corcino is lying. Acevedo denied any wrongdoing before a federal grand jury. Rossello's spokesman, Pedro Rosario Urdaz, condemned ``the character assassinations.''

Last month, New Progressive Party Mayor Angel Rodriguez was convicted in federal court of bribery and conspiracy in a $2.5 million kickback scheme that targeted a U.S. company cleaning up debris from Hurricane Georges.

Rodriguez resigned as mayor of a San Juan suburb and is to be sentenced in June.

In May, a federal court hears the case against former NPP Sen. Nicolas Nogueras, his wife and a former IRS official on charges of evading $2.2 million in Social Security payments from two hotels Nogueras owned.