EXCLUSIVE

EXCLUSIVE: Rachel Duncan is back in town, and she’s not looking for trouble

jmonk@thestate.comMay 22, 2014 

Rachel Duncan reports to Federal Court in Columbia in April 2012 to plead guilty to federal charges of wire fraud and tax evasion.

THE STATE — FIL EPHOTOGRAPH

  • The S.C. Restaurant & Lodging Association

    Formerly known as the S.C. Hospitality Association

    Members: 1,400, who represent the state’s $14 billion tourism industry

    President and CEO: John Durst

    Headquarters: Columbia

    Mission: To “Promote, Protect and Educate the Hospitality Industry of South Carolina for the good of all”

    Financial health: Durst, a former director of the S.C. Department of Parks, Recreation and Tourism, said Thursday his group has initiated numerous accounting safeguards to prevent any repeat of such a theft. “A setback creates an opportunity for a comeback. By any standard, our association is making a very strong comeback.”

— Rachel Duncan, the center of a 2012 embezzling scandal that fleeced and embarrassed a major state lobbying group and focused attention on the perils of Internet gambling, is out of prison and back in the Columbia area.

“She’s living in a half-way house under federal supervision and hopes to get a job that will allow her to continue to rehabilitate herself,” said Greg Harris, her lawyer, said Thursday.

She’ll need a job: She owes the tourist trade association some $467,000 in restitution and the IRS, $85,000.

“She wants to say this,” Harris said: “‘After being charged with this offense, I accepted full responsibility for my actions and was sentenced to jail. Prior to imprisonment, I assisted in the arrests of a number of violent people. I have now almost completed my sentence and am looking forward to returning to my family and the community.’”

For Duncan, 43, being a federal prisoner in a halfway house is the latest in a dizzying succession of roles more suited to a television drama than the real-life Lexington County wife and mother of three she once was known as. In those days, she had a short commute and nice job in Columbia, where she made $70,000 a year being the top aide to the well-funded S.C. Hospitality Association’s longtime executive director, Tom Sponseller.

In 2012, that image unraveled after Sponseller’s dramatic suicide. He shot himself in a windowless room in the parking garage under the downtown tower where his office was on the 12th floor. His body wasn’t found for 10 days, despite a supposedly thorough search by the Columbia Police Department.

Within months, Duncan pleaded guilty to stealing some $480,000 from the S.C. Hospitality Association.

Sponseller didn’t take any money – the 61-year-old Citadel graduate and former U.S. Air Force officer is believed to have killed himself because he couldn’t take the disgrace of being known as Duncan’s only supervisor while she was stealing hundreds of thousands from the group from 2006 to 2012.

Testimony and undisputed federal filings soon established Duncan as a master embezzler of some $480,000, a tax evader who owed the IRS $85,000 and an addict to sophisticated forms of Internet gambling. In her Internet dealings, she funneled her stolen money through various shell companies, juggled international money transfers and patronized off-shore gambling sites. She gambled away all the money she stole.

More recent federal filings say she has been a government informant while in prison in Florida. And her expertise in Internet gambling has helped federal officials understand and penetrate the dark, multi-billion-dollar world of Internet gambling, government officials and Harris said.

She was such a helpful informant, government filings say, that her information led to the arrests and convictions of three people on methamphetamine drug charges.

“Without the information provided by the defendant, these cases would not have been brought, and therefore, criminal activity would have gone undetected and unpunished,” wrote U.S. Judge Joe Anderson in an order in the case.

Other information has led to the arrest of two people on murder charges, but no convictions have resulted in those cases, according to government filings.

Since Duncan’s sentencing in August 2012, Judge Anderson reduced her 36-month sentence to 28 months. She is serving out the remainder of that time in the Columbia-area half-way house, with a scheduled release date sometime in October.

Duncan is concerned about her safety and would rather not have too many details about her whereabouts and situation be known, Harris said.

Harris did say Duncan came by her information about other criminal acts because once she was arrested, she reached out to a wide network of friends and family, asking for any information about criminal activity.

“The government filed the motion for the reduction in her sentence was because of her service to the government and community in taking these people off the street,” Harris said. “She also on numerous occasions sat down with law enforcement to discuss not only the dangers of Internet gambling, but the ease with people can get dragged into that web.”

Duncan was released from federal prison two-and-a-half weeks ago. She is to undergo counseling for her gambling addiction, Harris said. Her sentence requires her to repay the tourist trade group some $467,000 and the IRS, $85,000. But officials have said they know she likely won’t be able to do so because her chances of getting a well-paying job are bleak.

Nonetheless, said Harris, “She is upbeat because she is going to be able to return to her family soon. She will be under the supervision of the court, but hopefully, she will be employed and a tax-paying citizen. Hopefully she will be employed within the next few months.”

Harris said she will be supervised for three years, during which she has to abide by a number of restrictions, including getting permission to travel out of state.

“She’s putting feelers out there, hoping somebody will take a chance on her. She’s hard-working and very intelligent.”

Reach Monk at (803) 771-8344.

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