The former director of Canton Papertown Association Gail Guy was indicted by a grand jury April 25 with charges of embezzling nearly $8,000 of town tax dollars and tourism tax dollars while spearheading the group that was supposed to be using those funds to promote downtown Canton. She was indicted on charges of misusing another $1,350 obtained under false pretenses.

The charges have been 10 months in the making. Last June, media reports uncovered widespread public skepticism among Canton merchants about Guy’s use of public funds intended to promote Canton. Merchants said they saw no material results from Guy’s work as the director of the publicly-funded nonprofit.

When questioned repeatedly in person, via phone and via fax, Guy refused to account for how she spent funds. The Canton Papertown board of directors had become defunct and had no clue how Guy was spending the organization’s money. The town required no audit or accounting from Guy on how she spent the some $50,000 in town tax dollars.

Simultaneously, Scotty Ellis, the director of the Tourism Development Authority, discovered that Guy had collected $4,611 in room tax dollars under the auspice of printing promotional brochures, but never printed the brochures.

Further investigation by the Smoky Mountain News uncovered that Guy had received $1,350 in room tax dollars for a radio advertisement, but the radio station had never been paid either. Guy had also failed to file federal nonprofit tax forms for the past three years.

The town seized Papertown’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. Out of many discrepancies discovered in Papertown’s accounting, the Canton Police Department and State Bureau of Investigation were able to piece together five counts of embezzlement.

In addition to the $4,611 for the brochures, investigators flagged four other checks made out to Papertown that Guy appeared to cash with no indication of how the money was spent, according to the allegations. Guy was charged with two counts of obtaining property by false pretenses for the $4,611 for the brochures and the $1,350 from the radio station ad.

Guy could receive six months in prison for each count, or she could pay back the money and be put on probation instead of jail time, depending on the judge’s preference. It is not known whether Guy will plead guilty or go through a jury trial. She is being represented by Canton Attorney Reid Brown.