Rachel Duncan
Rachel Duncan
COLUMBIA, S.C. (AP, WLTX) -- A former South Carolina Hospitality Association employee has pleaded guilty to embezzling about $500,000 from the group.
Rachel Duncan was in federal court in Columbia Wednesday to enter the plea to wire fraud and tax evasion charges. After the hearing, she left the courthouse with her lawyer without talking to reporters who gathered outside.
"It's safe to say, as far as this money goes, the money has been tracked and the person who stole it has been held accountable," said Assistant US Attorney Winston Holliday.
Duncan was in charge of the lobbying group's finances, and investigators have said she abused that position to take over $480,000 over a period of several years.
The Hospitality Association's CEO, Tom Sponseller, killed himself in February in a parking garage just outside his office. Police say he left a suicide note detailing his despair over Duncan's apparent misdeeds. Assistant U.S. Attorney Winston Holliday said Duncan told Sponseller about the full extent of the embezzlement only days before the executive's death.
"We've analyzed his bank records, we've analyzed her bank records, the hospitality association has analyzed their bank records and it's concluded he didn't get any of the money," said Holliday.
In documents presented in court, prosecutors say Duncan used much of the money for online gambling. Some of the gambling took place at her work computer, according to prosecutors.
Holliday said after the hearing that they first heard of problems with the group's finances in late 2011.
"There were irregularities in financial transactions that the agents became aware of through talking to their sources in financial institutions," he said.
Holliday said he couldn't reveal any further details about how the problem came to light, but added that the Hospitality Association was not the group that alerted agents. He also said investigators never got the opportunity to talk to Sponseller before his death.
Prosecutors also revealed in court that they found photos of a sexual nature of Duncan only on Tom Sponseller's computer. Holliday did not elaborate further on the content of the photos, but did say they led investigators to believe Sponseller's relationship with Duncan was different than what he disclosed in his suicide note.
"They are just of her," he said.
Holliday says photos of Duncan with bruises on her face were also recovered from Sponseller's computer. Sponseller was not responsible for the injuries, Holliday said, and appeared to only be storing them on his computer.
"There's no other conclusion than that he was simply documenting those for her," said Holliday. "It would not be accurate to say he had any role in the content of those photographs."
As for why prosecutors released this information, Holliday said he felt there was a public interest to warrant disseminating that part of their evidence.
"I thought there were some questions that were lingering that the public was curious about, so very briefly I thought it would be appropriate to address those," Holliday said.
Prosecutors, however, made it clear that after searching through Sponseller's records, they found no indication that he received stolen funds. Holliday said that part of the investigation is now over.
There is, though, an ongoing IRS investigation into the online gambling operations that Duncan used, and Holliday said Duncan has been cooperating with their probe. In fact, Holliday said Duncan has been cooperative through this entire process.
She faces up to 23 years in prison and $350,000 in fines. Sentencing is expected in June.