S.C. woman gets 2 years for tourism group theft

The Associated PressAugust 14, 2012 

— A federal judge on Tuesday sentenced a woman to 2 1/2 years in prison for embezzling nearly $400,000 from the South Carolina Hospitality Association, a crime the group's director said in a suicide note drove him to take his own life.

In a tearful, quiet apology in federal court in Columbia, Rachel Duncan said she was remorseful for her actions, which left her young children hurt and confused. Prosecutors said Duncan stole hundreds of thousands of dollars over several years, funneling the group's money into a secret checking account. From there, her attorney said, Duncan used the money to support a decades-long addiction to gambling.

“I never meant for it to get so out of control,” Duncan, 42, said in court Tuesday. “I always though in the back of my mind that I was going to hit the big one, and I was going to be able to pay the money back.”

Duncan, the association's former accounting director, has been free on bond since pleading guilty earlier this year to tax evasion and wire fraud charges. Prosecutors said she will likely report to prison in about two months. Duncan was initially charged with stealing nearly $500,000, but prosecutors said they could only prove she had taken just over $367,000, which she has been ordered to repay.

Duncan made no mention Tuesday of Tom Sponseller, the founder and executive director of the group that lobbies on behalf of South Carolina's multi-billion dollar tourism industry. It was when Sponseller went missing earlier this year that a probe by federal authorities into the group's finances came to light, revealing that an audit had shown $480,000 missing from the association's coffers.

Authorities drew no link between Sponseller and the missing money. But 10 days after his February disappearance, Sponseller's body was found in a locked room in the parking garage of his office building. Authorities determined that he had shot himself after investigators found a gun beside his body and the weapon's packaging inside his locked office desk.

Two high-ranking Columbia police officers lost their jobs because of the way the search for the missing executive was handled. Sponseller's body was found during a third search of his office complex.

Authorities also discovered a three-page note, in which Sponseller described Duncan's confession to stealing the money and how despondent he was over her betrayal and misdeeds, as they happened on his watch. Duncan was subsequently charged in relation to the missing money, but both prosecutors and U.S. District Judge Joseph F. Anderson Jr. made it clear that they drew no direct link between Duncan's actions and Sponseller's death.

“It was an unexpected and extreme response,” Assistant U.S. Attorney Winston Holliday said, of Sponseller's death. “It's very tragic that that took place.”

Sponseller's widow felt differently, writing to Anderson earlier this year to implore the judge to remember her husband's death when he sentenced Duncan.

“If she was not a thief – which she is – and not stolen from the Hospitality Assoc., Tom would be alive today and thriving in an Assoc. that he worked so hard to build to what it is today,” Meg Sponseller wrote.

In previous court hearings, prosecutors have said federal agents found sexually oriented photos of Duncan on Sponseller's work computer while investigating the missing money, but they would not detail what the images showed. Agents also found photos showing bruises on Duncan's face – images Holliday has said Sponseller appeared to have been gathering for Duncan to help her build some sort of domestic abuse case, although prosecutors gave no details against whom.

None of the photos were mentioned at Tuesday's sentencing.

Because of Duncan's assistance with an ongoing investigation into offshore gambling, coupled with the fact that she immediately confessed when confronted by federal agents, prosecutors recommended that she be sentenced to no more than three years in prison. But it was also Duncan's insistence of Sponseller's innocence that ultimately helped her, along with evidence that showed she spent the money that she stole not on expensive items but to further her own gambling addiction, officials said.

“She did not use this money for a lavish, extravagant lifestyle,” Anderson said. “I am confident that Ms. Duncan is going to straighten herself out.”

Prosecutors have not given details on the gambling probe, citing an ongoing investigation.

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