The former Spring Lake finance director was arrested Friday and charged with embezzlement, bank fraud and identity theft.
Gay Cameron Tucker, 63, of Fayetteville, is accused of embezzling more than $500,000 from Spring Lake during her time as finance director and accounting technician for the town, the U.S. Attorney’s Office for the Eastern District of North Carolina said in a release.
Tucker was arrested at her home and taken to Raleigh for a hearing, the U.S. Attorney’s Office said.
An indictment alleges that Tucker wrote fraudulent checks containing forged signatures of the mayor and town manager.
“City government officials are entrusted to spend taxpayer funds on public needs – not their own,’’ U.S. Attorney Mike Easley said in the release. “Our prosecutors and law enforcement partners are committed to vigorously investigating all allegations of public corruption.”
Tucker is charged with one count of embezzlement from a local government receiving federal funds, four counts of bank fraud and two counts of aggravated identity theft. The maximum punishment for embezzlement is 10 years in prison. The maximum punishment for bank fraud is 30 years in prison. The maximum punishment for aggravated identity theft is not less than, nor more than two years in prison consecutive to any other sentence imposed, the release said.
A state audit released March 17 found that a former Spring Lake official used at least $430,112 in town money for her personal use.
Those findings were referred to the FBI and the State Bureau of Investigation to determine if there was sufficient evidence to pursue criminal charges.
The audit did not name the former accounting technician, but CityView TODAY learned that Tucker served in that capacity from July 2014 through March 2020, and again from April 2021 until her termination in July 2021. Tucker also served as the interim finance director from March 2020 to September 2020 and as the finance director from September 2020 to April 2021.
The indictment alleges that Tucker created or caused to be created fraudulent checks drawn on the town’s bank account that included forged signatures of various town officials, including then-Mayor Larry Dobbins and former Town Manager Samantha Wullenwaber.
According to the indictment, they included:
“After receiving the town's money into her own bank account, Tucker then used the funds on her own interests,’’ the indictment states. “These interests included rent, personal living expenses, cash withdrawals, and money transfers to individuals.’’
The indictment alleges that Tucker presented four fraudulent checks to Bragg Mutual and Truist Bank in April and October 2020 and in May and June 2021 totaling more than $41,000.
The indictment also gives notice that Tucker will have to forfeit any proceeds that were derived from the alleged offenses.
Tucker on Friday was released under the supervision of the United States Probation Office. She was required to surrender her passport and not leave the district, the U.S. Attorney’s Office said.
The FBI is investigating the case, and Assistant U.S. Attorney William M. Gilmore is the prosecutor.
State treasurer: Legislative action needed
State Treasurer Dale R. Folwell said Friday’s arrest and indictment highlight the need for legislative action to help prevent future abuses in state and local government.
“It’s sad relief. Sad that this has happened to the taxpayers of Spring Lake now for the second time and relief that finally law enforcement is taking these matters seriously,” Folwell said in a release.
Folwell, who also serves as chairman of the Local Government Commission, said weak financial controls make local governments vulnerable to abuse.
He said the Local Government Commission has been called in twice to address issues related to Spring Lake’s finances. A state audit in 2016 showed abuse of the town’s procurement cards and missing revenues.
The Local Government Commission assumed control of the town’s finances last October amid concerns over budget deficits, fiscal disarray and possible missing money.
“It’s further troubling to me that this person was actually brought in to address the issues that had occurred the first time,’’ Folwell said. “State and all local governments have got to do a better job on reference checks.
“Simply kicking the can down the road where bad actors can operate in other parts of the state without fear of anybody knowing what they may have done at their previous place of unemployment has to be unacceptable going forward.”
Folwell said Senate Bill 265 contains reforms to curb financial abuse. He said one provision, for example, states that after a certain period of time if audits are not turned in on a timely basis as required, the city or county’s sales tax refund can be withheld.
In recent years Spring Lake has missed the deadline for mandatory annual audit reports to the Local Government Commission.
Jami McLaughlin contributed to this report.
Lorry Williams is editor of CityView TODAY. She can be reached at email@example.com.