Woman who admitted embezzling $500,000 from S.C. hospitality association to be sentenced

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COLUMBIA — The state Hospitality Association’s former accountant will be sentenced Tuesday for stealing nearly $500,000 from her employer over six years to support a gambling addiction her attorney says started with video poker in the late 1990s.

Rachel Duncan’s sentencing in federal court comes four months after she pleaded guilty to tax evasion and wire fraud charges. The 42-year-old has been free on a $25,000 bond.

She faces up to 23 years in prison and $350,000 in fines, but federal guidelines call for a sentence between two and three years, said her attorney, Greg Harris. He said Duncan will agree to repay $367,500 over her lifetime to the lobbying group for restaurants and hotels.

While an audit found nearly $500,000 was missing, attorneys negotiated the reduced amount. Duncan spent all of it on gambling.

Federal prosecutors say the judge is unlikely to assess additional fines because of the amount she will be ordered to repay.

The State newspaper of Columbia reports that Harris detailed Duncan’s history of gambling addiction and abusive relationships in court documents filed before the sentencing.

When video poker became illegal in South Carolina in 2000, Duncan turned to online gambling, he wrote.

“Scratch-off games also became a hobby, but nothing fueled her more than the secret life she lived through online video poker gambling,” Harris wrote.

The U.S. Secret Service’s investigation into the association’s missing money came to light in February when its founder and executive director, Tom Sponseller, went missing. He was found 10 days later in a storage room off the parking garage of his office building. He had committed suicide, leaving behind a three-page note describing Duncan’s confession to stealing the money.

To fund her obsession, she opened a secret, personal checking account and began funneling money into it from the hospitality group in 2006.

An analysis of Duncan’s bank records found hundreds of diverted association checks and credit card refunds went into her account, while hundreds of wire transfers sent money to offshore gambling payment processors, according to the motion.

In the recently filed court documents, Harris said Duncan worked to separate Sponseller’s name from the theft.

“Like many people who knew Sponseller, Duncan was horrified to learn of his death,” he wrote.

A native of Auburn, N.Y., Duncan moved from Buffalo to Columbia with her husband in 1995, but they divorced a few years later. She hid her gambling addiction when she married again in 1999.

“Once again, the family facade appeared normal, but Mrs. Duncan’s secrets ran deep,” the motion said. “She played video poker and slot almost every night after she put her children to bed, and while her husband worked the night shift. Sometimes, she played at work when she thought she could hide it from co-workers.”

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avidreader
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avidreader 08/13/12 - 05:54 am
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$367,500

Two to three years in prison? When she gets out, how is it going to be possible to repay such a huge sum of money before she dies. If it's anything similar to a mortgage payment, the interest alone will kill her. Also, I'm sure the job market is not looking for an embezzler. Maybe Circle K will give her a job. The government can garnish her wages at up to 25% per month.

This woman's in a bit deep.

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