COLUMBIA — The former accounting director of the South Carolina Hospitality Association pleaded guilty Wednesday to embezzling about $500,000 from the group, and prosecutors said she appeared to have been intimately involved with the director who killed himself earlier this year.
Rachel Duncan, 41, entered the plea to wire-fraud and tax-evasion charges in U.S. District Court in Columbia. She was allowed to remain free on $25,000 bond until she is sentenced, likely later this summer.
Authorities have found no evidence that executive director Tom Sponseller received any of the $480,000 that Duncan has admitted she took, according to Assistant U.S. Attorney Winston Holliday. But prosecutors said federal agents did find sexually-oriented photos of Duncan on Sponseller’s work computer while investigating the missing money.
Sponseller killed himself in February, leaving a suicide note in which police said he detailed his despair over Duncan’s apparent misdeeds and said he was despondent they happened on his watch.
But Holliday said Wednesday that the sexual photos of Duncan on Sponseller’s computer showed that the pair’s relationship was more involved than the director had implied.
Agents also found photos showing bruises on Duncan’s face — images Holliday said Sponseller appeared to have been gathering for Duncan to help her build some sort of domestic abuse case, although the prosecutor gave no details against whom. “There’s no other conclusion than that he was documenting these for her,” Holliday said. “That’s what it seemed to do.”
Prosecutors say Duncan, who worked as accounting director of the group that lobbies on behalf of South Carolina’s multibillion dollar tourism industry, began siphoning money from the association in 2006, writing checks to herself from the association’s accounts and using the group’s point-of-sale credit card terminal to refund money to her own debit card.
Duncan also transferred stolen money to a prepaid Visa card, then used those funds for online gambling — some of which she did from the association’s computers, prosecutors said. In all, Duncan admitting taking nearly $481,000 from the association until earlier this year.
Duncan also failed to report any of the illegal income on her personal taxes, saying in 2010 that she made around $41,000 — substantially lower than she actually took in, according to prosecutors. Over several years, Duncan underpaid her taxes by more than $85,000, Holliday said.
Local or federal authorities never approached Sponseller directly about the probe into the missing money, Holliday said. Aside from knowledge that there were some problems balancing the association’s books, the director didn’t know about the scheme until Duncan told him herself, just days before his suicide, Holliday said.