The former director of the Canton Papertown Association is under investigation by the State Bureau of Investigation over missing money.

District Attorney Mike Bonfoey requested the SBI’s assistance in the white-collar investigation of Gail Guy in early February “to determine whether crimes have been committed,” Bonfoey said. The Canton Police Department has also been investigating Guy.

“We’ve only had the case a brief time,” said Charles Moody, special agent in charge of the SBI’s western district. “The Canton Police Department had already done a good bit of work. We are just trying to help them put the rest of the work together.”

Papertown is a publicly funded promotional organization for Canton merchants. Media reports last June revealed that thousands of dollars given to Papertown were unaccounted for and the non-profit had low credibility, both with local merchants and community leaders. Guy resigned when the articles appeared.

Also following the coverage, the town of Canton, the biggest funder of Papertown, seized the non-profit’s records and hired an accounting firm to review the finances. Guy’s books were incomplete, however. The auditors could not figure out where she was spending all the money. The auditors’ report came back in December. After that, the Canton Police Department did some investigative legwork to help make a case for bringing in the SBI.

“We presented our preliminary investigation to the district attorney and it did show some concerns,” said Canton Police Chief Bill Guillett.

The town’s audit launched last summer was supposed to take two months. But the accounting firm was located along the French Broad River in Asheville and was flooded in September. Additional records still being held in Canton were flooded as well. The records had to be salvaged before the audit could continue.

Prior to Guy’s resignation, Canton merchants had been unhappy with her performance. The office was often closed during business hours. Messages went unreturned, including invitations to participate in countywide publicity events. Long-standing town festivals had dwindled, and some events had collapsed.

The bulk of Papertown’s funding was from a town allocation of about $50,000 a year, but the town had no oversight of how Guy spent the money. The Papertown board of directors had stopped meeting.

Papertown also received approximately $15,000 a year in county tourism tax dollars. The Haywood County Tourism Development Authority required receipts and invoices documenting how the money was spent, but Guy fabricated invoices involving more than $5,000.

Guy had quit filing federal tax forms for Papertown in 2001, jeopardizing the non-profit status of the organization.