Gail Guy, the former director of Canton Papertown Association, pleaded guilty this week to stealing public money and agreed to repay $14,000 to the town of Canton and the Haywood County Tourism Development Authority.

Guy had been charged with five counts of felony embezzling charges and two counts of obtaining property under false pretenses for incidents occurring over a four-year period. All seven charges were reduced to misdemeanors.

District Attorney Mike Bonfoey said reducing the charges in exchange for repayment seemed like the best option. The case against Guy was not watertight, Bonfoey said.

“We know money didn’t go where it was supposed to go, which is the Canton Papertown Association bank account,” Bonfoey said. “But we would have a difficult time proving where the money did go.”

Another factor in reducing the charges to misdemeanors was Guy’s lack of a criminal record. She was treated as a first offender. Although seven separate crimes were committed between 2000 and 2004, they were all considered first time offenses since they came to court at one time.

Steve Banks, an executive director hired to replace Guy, was charged and convicted of three felonies for embezzling three $25 checks and was placed on strict probation. Banks had a prior criminal record in another state, however, and the case was more clear-cut, including witnesses who saw him cash checks made out to Papertown and use the money to buy dinner, Bonfoey said.

Of the $14,000 Guy must repay, $8,000 is going to the town of Canton. Around half is for money she stole, and the rest is for bank penalties racked up by overdrawing from Papertown’s account and for personal cell phone use.

Guy must repay $4,611 to the county Tourism Development Authority that she had received in room tax dollars under the auspices of printing promotional brochures. The brochures, however, were never printed. The check was deposited into Papertown’s account, however, and could have been used to cover other Papertown expenses, just not the brochures.

“There is no clear way of being able to see where the $4,611 went,” said Lt. Brian Whitner with the Canton Police Department who conducted the investigation. “But we also could not prove that she used that $4,611 to her personal use.”

Whitner said conducting the financial investigation was time consuming, especially since the Canton Police Department got flooded in September 2004 and lost many of its records and had to find a new office in the midst of the investigation.

“Financial crimes are the most difficult to investigate,” Whitner said. “We had to make sure we crossed our t’s and dotted our i’s so we would have the necessary information we needed to proceed.”

Whitner and Bonfoey both said Guy’s case had more to do with bad money management than real criminal intent. Except for a few incidents, “everything seemed to be legitimate,” Whitner said of his examination of bank accounts. A copy of the financial investigation obtained from Whitner details every check deposited into Papertown’s bank account, every check Guy cashed through the Papertown account, every check written from the Papertown account and any cash withdrawal made from the account over four years. Whitner found only seven unexplained transactions.

Bad money management was rampant however. Guy racked up overdraft charges nearly every month, sometimes multiple times a month.

“She was doing everything in her power to keep Papertown afloat,” he said.

Guy has to repay another $1,350 in room tax dollars for a radio advertisement that had never been paid for.

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 intended to promote downtown Canton.

Guy refused to account for how she spent the funds. The Canton Papertown Board of Directors had become defunct and did not know how Guy was spending the organization’s money. The town required no audit or accounting from Guy on how she spent some $50,000 that was annually given to Papertown by the town.