When Nancy Cook dined out, she used a debit card to cover the tab.
When she paid her personal cell phone bill, she used the same card.
When she withdrew cash, she used it again.
The only problem is that the card wasn't hers. It drew from a taxpayer-funded account used to pay bills for homeless veterans at the North Charleston shelter Cook then managed as its executive director.
Some expenses were for the legitimate benefit of the center and the veterans.
Others -- clothing and antiques at high-end King Street boutiques, pricey meals at fine restaurants, rent at her private-practice office -- were questionable. Cook even used the Good Neighbor Center's account to pay her personal federal withholding tax.
For more than 15 years, Cook had managed the 32-bed Spruill Avenue shelter where homeless veterans sought help finding work, obtaining permanent housing and overcoming alcohol and drug addiction.
Officials at the U.S. Department of Veterans Affairs, the primary source of the grant money that bankrolled Cook's lifestyle, did nothing to stop her spending. VA officials conducted annual inspections at the nonprofit shelter, but rarely reported more than minor health or safety violations.
VA inspectors' financial reviews were perfunctory and relied on Cook's documentation.
Cook's management went unchallenged until last fall when The Post and Courier published its first reports detailing problems at the shelter.
Now Cook, a former Charleston County School Board chairwoman, is at the center of a federal investigation.
Auditors said this year that the shelter owes the government more than $122,000 in grant funds that were spent inappropriately. Now they are probing whether Cook broke federal laws.
Cook was fired in May and her access to the shelter's funds has been suspended.
Her attorney, Gregg Meyers, said his client acted only with approval from the shelter's board of directors.
Meyers, who served with Cook on the school board, said context must be considered when reviewing Cook's spending. Even hundreds of dollars in purchases from stores such as Bath and Body Works were justified, he said.
"Room fresheners or candles were purchased … to create a better atmosphere than the shelters would otherwise have," Meyers said in an email.
Cook did not withhold taxes when she paid herself and an employee in checks from the shelter's account, according to recently released records and interviews with the new board president. She told VA officials that she had, records show.
The IRS requires even tax- exempt groups, such as the Good Neighbor Center, to take payroll taxes. After the IRS caught up with Cook in January 2010, tens of thousands of dollars in back taxes and penalties were withdrawn from the shelter's checking account instead of from her own pocket.
And when Cook started paying taxes monthly in February of that year, the money still was drawn from the veterans' funds instead of her own paycheck.
That same month, Cook wrote and endorsed a check for $30,000 made out to cash, records show. It is not known how that money was spent.
Board President Bobby Knight, who defended Cook when The Post and Courier began its investigation of the shelter in October, said last week he is confounded. He offered his own explanation of Cook's spending.
"It didn't matter what the monthly payment was," he said. "She could pay it with someone else's money."
Cook also misrepresented her $130,000 annual salary to the IRS in the shelter's annual tax filings. In reality, it was more. That's because Cook regularly wrote herself checks for $780 -- as frequently as twice monthly -- jotting "gas" or "mileage" in the memo line.
The cash came despite regular charges to gas stations on the shelter's checking account, one that only she and her one employee could access. The other employee is not suspected of mishandling funds, Knight said.
IRS woes persisted. When the board tried to accept a $300,000 state housing grant in January, officials originally denied the award because the nonprofit did not have a clear deed to the shelter, Knight said.
That's when board members found out that the IRS had put at least three federal tax liens on the property.
After learning of the liens, the board discovered that Cook had personally guaranteed a $65,000 loan in 2006; the bank withdrew $1,700 a month from the shelter's account to pay it off, Knight said.
Board members were unaware that a loan had been taken out and are unsure what it was used for, he said. It still had a $34,000 balance when Cook was fired.
In his statement, Cook's attorney said the "books were entirely open to the board." He offered no clear explanation for the tax issues, again casting responsibility on the board.
IRS spokesman Mark Hanson said the agency would not comment on Cook's case.
Recently released documents paint a troubling picture of fiscal operations at the taxpayer-supported shelter.
The newspaper's most recent review included some of the Good Neighbor Center's banking statements dating to 2007, copies of checks, annual VA inspection reports and correspondence among directors.
For years, Cook's spending was unchallenged.
The VA deposited tens of thousands of dollars monthly in a Bank of America checking account to be used to feed, clothe, shelter and rehabilitate homeless male veterans.
The shelter also collected hundreds of thousands of dollars from the state and county, records show. Smaller deposits came from the veterans -- residents with jobs were required to pay rent.
Some former residents complained that conditions at the center were poor. But generally speaking, their needs were met, according to VA inspection reports.
At the same time, Cook drew from the funds to pay the $1,900-a-month health insurance premiums for her family and that of Mike Collins, the man she listed as her husband on Blue Cross Blue Shield forms.
Collins, an electrician, has been a member of the shelter's board since at least 2007 and has been awarded contracts worth thousands of dollars for work at the shelter, documents show.
The board dismissed Collins after firing Cook in May.
Meyers, Cook's attorney, said Collins is Cook's fiance, not her husband, and that he did work at the shelter at "below-market prices."
Cook, a licensed professional counselor, maintained a private office on East Montague Avenue in the trendy Park Circle neighborhood of North Charleston, miles from the converted motel where veterans stayed. The $600-a-month rent for it came from the veterans' account.
Bank statements reviewed by the newspaper show that Cook also used the taxpayer-supported account to buy hundreds of dollars' worth of clothing at Juicy Couture, products from Bath and Body Works, yoga lessons and movie theater tickets.
Meyers said some of the purchases were gifts for volunteers and donors, while others were for the veterans themselves.
"The VA has approved yoga for veterans, and books and supplies were purchased from the yoga center," he said.
Board President Knight challenged the explanation. "Even if that's true, people waiting on disability checks don't need candles and yoga lessons from Mount Pleasant," he said.
Cook used the account to make thousands of dollars in payments to Baker Motor Co., a Charleston-area auto dealer that sells upscale foreign cars. Meyers said the board "approved a large repair" to Cook's Mercedes because her work "involved considerable travel."
Cook also drew from the account to pay for personal cell phones for herself, her family and for a phone line at the Montague Avenue office, according to documents and Knight.
The shelter, meanwhile, has one office phone that veterans can use only when they get permission, Knight said.
While veterans ate food that mostly was donated or purchased with food stamps, Cook spent the shelter's money dining at, among many restaurants, Sunfire Grill, Hominy Grill, Locklear Lowcountry Grill, Queen Anne's Revenge and Taco Boy.
Meyers said Cook held meetings with potential donors at restaurants where "work would be accomplished."
Knight rejected Meyers' justification, and called other purchases from stores such as Target, Walmart, Best Buy and Office Depot "questionable."
Cook's purchases caused the checking account's balances to swing wildly. In January 2007, for example, the balance started at about $16,400 before being overdrawn by more than $3,800. After the VA deposited its funds, the balance was back up to nearly $40,000, a statement shows.
Cook could not be reached by phone or in visits to her private practice on Montague Avenue. A man who entered that office Thursday and identified himself as the landlord said Cook had vacated the space in early July.
Knight said the board halted rent payments when it took control of the shelter's bank accounts last month.
Cook now is renting space for her private business from the Charleston Youth Development Center on Lackawanna Boulevard, a woman there said Thursday. North Charleston had not been contacted to update the business license for the operation, which would require a new inspection, a city employee said Friday.
Cook's unfettered spending continued for years due in part to limited federal oversight of fiscal operations.
Over the years, the VA seemed to implicitly trust Cook's management. When she requested a higher daily per-bed reimbursement rate, the federal department obliged -- it nearly doubled "per diem" grant payments from $18 to $33 per bed per day in October 2008.
As part of its inspection process, the VA conducted annual financial reviews. But full audits were reserved for operations receiving more than $500,000 a year from the federal department. Annual revenues the shelter reported on tax filings always were below that threshold.
In VA inspection reports dating back to 2002, the financial reviews appear perfunctory.
Each year, federal inspectors noted that "based upon the information provided by the organization and results of the site visit, (the Good Neighbor Center) has an acceptable process in place that follows generally accepted accounting principles. ... I recommend the fiscal agreement for this project be continued."
The VA toughened its stance in the months following the newspaper's first reports on the shelter. A January letter to Cook raised concerns about the shelter's policy of spending veterans' food stamps.
In a February letter, a local VA regulator expressed concern that shelter staff members were not on site during his inspection; doors and file cabinets were unlocked, exposing veterans' confidential information; the kitchen was unattended; and medical supplies were left in the open.
The array of shortcomings was "of major concern and does not meet the operational standards" of the VA's grant program, the letter said.
Compounding matters, the directors were mostly in the dark about the shelter's management and accounting over the years, board members have said. Knight acknowledged that the board was "too trusting."
Like many other small-time nonprofits, the shelter's unpaid board of directors in recent years had been plagued by rapid turnover. Some directors served in name only.
One former director received contracts that had not gone out for bid for work at the shelter. Cook culled at least one director who had been one of her private clients.
The Post and Courier's investigation of the facility last fall prompted a federal audit. In February, auditors wrote a draft report, which the shelter's board provided to the newspaper in June.
The federal auditors specifically questioned $122,000 Cook spent on personal incidentals, repairs to her personal car and other items inappropriately charged to the VA grant. Auditors recommended that the money be repaid to the government.
Meyers questioned the audit, saying an expenditure might be proper but not regarded that way because the VA restricts how funds may be spent.
The recent reports are not the first to criticize Cook's involvement with the shelter.
As school board chairwoman in 2006, Cook received $20,000 for the center from a trust fund administered by the school district. At the time, other school board members said it was a conflict of interest.
Other criticism dates to 1994, when Cook was fired from her post at the North Charleston Police Department after being accused of mishandling city funds. Cook sued the city, claiming she was terminated out of retaliation. She received a $105,000 settlement.
The end of the Good Neighbor Center's trouble appears nowhere in sight.
After Cook was fired, she sued the shelter and three of its directors, accusing them of breaching her contract and fraud.
Knight, one of the defendants, said he personally hired an attorney to handle the suit. An answer has not been filed and a new executive director has not been named.