In a handwritten letter to a federal judge, Tom Sponseller’s widow pleaded for a harsh sentence for the woman who stole money from her husband’s association, saying the woman’s actions sent Sponseller “to his grave.”
But U.S. District Judge Joseph Anderson made it clear Tuesday that Rachel Duncan could not be held responsible for Sponseller’s death because she could not have anticipated his suicide while she was embezzling money for online gambling.
“As unfortunate as it was, it will not be part of the sentencing today,” Anderson said.
Anderson sentenced Duncan to 2½ years in federal prison as her punishment for wire fraud and for filing a false tax return related to the theft from the S.C. Hospitality Association. She also was ordered to repay the association $367,508 in restitution and to pay the IRS $85,333 in back taxes.
Duncan, 42, of Lexington, will report to a federal prison within the next couple of months, said Assistant U.S. Attorney Winston Holliday. She most likely will serve time at a women’s prison in West Virginia, he said.
While in prison, half of Duncan’s earnings from her job will be sent to the Hospitality Association. The remaining amount must be repaid at a minimum of $100 a month upon her release. At a rate of $100 a month, it would take Duncan about 306 years to settle the debt.
The IRS will be last in line for receiving any restitution, according to Anderson’s order.
Meg Sponseller’s two-page letter to Anderson was written in May and marked confidential on the envelope. But Anderson said he had read the letter and felt obligated to publish it as part of the official court record.
“Rachel and her actions drove my husband to take his own life, and we (his wife, children, grandchildren, colleagues and friends) are devastated, as Tom was at the time of his death,” Meg Sponseller wrote.
Holliday agreed with Anderson that Duncan could not have anticipated her boss’ reaction to her confession that she was under investigation for embezzling money. Tom Sponseller shot himself two days after learning of the investigation.
“It was an unexpected and extreme response,” Holliday said.
Police investigators took 10 days to find Sponseller’s body after his disappearance, costing two police supervisors their jobs.
Sponseller left behind a three-page note that described Duncan’s confession and their relationship. He wrote that he thought of Duncan as a daughter and that he often listened to her problems.
However, earlier court testimony indicated their relationship went beyond a typical employer to employee relationship. Investigators found sexual photographs of Duncan on Sponseller’s computer during their investigation, Holliday said. Duncan has denied they had a sexual relationship.
When the embezzlement allegations surfaced in February, the Hospitality Association conducted an audit that found Duncan had taken more than $480,000. However, her attorney, Greg Harris, negotiated with prosecutors to lower the amount.
Duncan’s employment contract entitled her to commissions for signing up members, Holliday said. She had received about $70,000 in commissions, but there was no way to prove whether she was entitled to that money, he said. There also were some phone bills and other reimbursements that were in dispute, he said.
“Without the input of Tom Sponseller, we can’t say one way or another,” he said.
Duncan admitted that she stole the money between 2006 and early 2012. She wrote herself checks and made deposits from a credit card terminal to a secret bank account. Duncan transferred the stolen money to offshore accounts so she could place bets at an online casino based in Australia.
“I always thought in the back of my mind I was going to hit the big one and I could pay that money back,” she said in court Tuesday. “I knew it was wrong in the back of my mind.”
In court filings and on Tuesday, Duncan said she became hooked on gambling by playing video poker at Columbia bars and restaurants in the late 1990s. Once those games were banned, she turned to the Internet. She is receiving counseling for a gambling addiction, which she said was a means of coping with childhood abuse at the hands of her father.
In court, Duncan, a married mother of three children, wiped away tears as she apologized to the Hospitality Association and her family for stealing the money and abusing their trust.
“I’m very sorry for doing the damage that I did,” she said. “I never meant for it to get so out of control. I apologize to my family.”
Anderson said Duncan’s story was a lesson for anyone who thinks that gambling is a victimless crime.
“You are walking proof that statement is not always true,” he said.
Meg Sponseller's letter to U.S. District Judge Joseph Anderson
Reach Phillips at (803) 771-8307.
