The South Carolina Hospitality Association’s former accounting director Rachel Duncan pled guilty in federal court today to tax evasion and mail fraud. United States District Court Judge Joseph F. Anderson, Jr. accepted her guilty plea on both felonies. Duncan embezzled $480, 944 from the trade group and spent it on online offshore gambling.
In brief, between the years 2006 and 2012, Duncan wrote checks to herself and deposited money into her account via a point-of-sale credit card terminal from SCHA membership fees. She transferred money to a NetSpend Visa card and into an online gambling account. Because she failed to report the illegal income, she broke tax laws. The mail fraud charge comes from her use of wire services to commit fraudulent transactions.
Federal prosecutor Winston Holliday also revealed that the association’s CEO Tom Sponseller – who committed suicide during the investigation– had sexual photos on his computer of Duncan.
We asked Holliday why he released that information in the hearing.
AUDIO: Prosecutor explains reason he revealed relationship (:18)
AUDIO: Holliday takes media questions after hearing (10:22)
In his suicide note, Sponseller said Duncan was like a daughter to him. He also wrote of remorse that the embezzlement happened under his watch.
Holliday said Sponseller knew something about the embezzlement, but Duncan fully informed him two days before he committed suicide. He says they have fully investigated Sponseller’s records and none of the embezzled money went to him.
Representatives of the Sponseller family were in court today and refused to comment.
Duncan’s sentencing is in two months. Because of her continuing cooperation, federal prosecutors recommended two reductions in her final sentence and an unsecured bond of $25,000. She faces a maximum of three years in prison, a $100,000 fine and two years probation on the tax evasion charge. On the wire fraud chargem she could get up to 20 years in prison, a $250,000 fine and three years probation.