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Documents: Former Bonner County Fairgrounds director took her own life amid embezzlement investigation

Darcey Smith reportedly used thousands in fair money to make unauthorized purchases. Shortly after being questioned by police, Smith took her own life.

SANDPOINT, Idaho — The former director of the Bonner County Fairgrounds was reportedly being investigated for embezzlement when she took her own life, according to the Bonner County Sheriff's Office.

Newly released documents show Darcey Smith was under investigation for allegedly using more than $40,000 to make unauthorized purchases "not benefitting the fair." Smith was questioned by police about the alleged embezzlement for the first time in late October 2022, but was found dead from a self-inflicted gunshot wound four days after she was questioned.

In June 2022, the Bonner County Human Resources Department got several tips that Smith was "misappropriating Bonner County Fairgrounds' assets." Once these complaints were given to the Fair Board, the HR team advised them to reclassify the Fair Manager position to report only to the Fair Board. Then, an investigation into Smith began.

The HR team told an external auditor in July 2022, who was not named in the report, that there were suspicions of fraud at the fairgrounds. That external auditor then started looking into the fair's 2022 financial statements. The following month, the HR team told an internal auditor about the possible embezzlement. 

The sheriff's office said the internal auditor should have started looking into the "relevant Fairgrounds' internal controls" at this point before the 2022 Fairground financial statements were released. They made this recommendation based on "potentially erroneous bookkeeping data."

The HR department then met with the Fair Board, at which point Smith filed a harassment complaint against HR. Former District 3 County Commissioner Dan McDonald reportedly supported Smith by suggesting that the HR team be removed from the investigation. He reportedly said the Board of County Commissioners would investigate the allegations, but the sheriff's office said that claim is false.

As the year continued, the sheriff's office said McDonald "used his authority as Chairman" and liaison to the Fair Board to prevent efforts to oversee the board's financial activities. At this point, Bonner County Prosecutor Louis Marshall had "serious concerns about possible mismanagement" of fair funds and determined that a criminal investigation needed to be opened.

Corey Coon, the Sandpoint police chief, initiated an investigation into Smith in October 2022. after learning that Smith allegedly used fair funds to buy a pair of boots. She was allegedly able to do this by creating a false invoice. 

Smith was interviewed by SPD on Oct. 27, 2022, regarding the allegations against her. At that time, the sheriff's office said she denied any wrongdoing.

Four days later, Smith took her own life. The Bonner County Coroner, along with a forensic pathologist, determined her cause of death was a single gunshot wound. Her manner of death was determined to be a suicide.

After Smith's death, the criminal investigation into her alleged misconduct closed and the prosecutor started a personnel investigation to determine the extent of wrongdoing and loss. 

Through interviews, investigators learned that two main bank accounts were used by the fairgrounds between 2018-2022. Additionally, they learned that a separate PayPal account had been opened in 2018.

During the investigation, the Sandpoint Police Department (SPD) determined that Smith allegedly created a fake invoice for a personal purchase. Investigators found an invoice from a company called Custom Awards for the purchase of "Fair Awards." The total was $449.42. This caught investigators' eyes, as the company does not exist and doesn't have contact information. It was later revealed that this invoice was created to buy Bonner County Fair & Rodeo presentation folders, which are purchased every year through a PayPal account.

Investigators identified more than $10,000 in unauthorized purchases through receipts. They also found an additional $14,000 in unauthorized debit transactions and more than $23,000 in unauthorized checks. Several checks were written to various unidentified people for the purpose of "Fair help," though investigators later learned these people were not hired by Bonner County. Those checks totaled more than $20,000.

Smith also allegedly wrote her son 13 different checks totaling $8,096, though her son was never hired by Bonner County.

In total, investigators determined that Smith took at least $40,358.22 from the fairgrounds. However, there were several other invoices and purchases investigators believe may have been falsified by Smith. 

It is possible that Smith took an additional $206,956.44 from the fairgrounds. 

"It is evident from the report that the losses due to fraud were substantial," the sheriff's office said in a statement. "However, the Fair is mostly a cash business, so the entire sum cannot be decisively determined."

The sheriff's office said the Fair Board "is committed to righting the ship." For the past several months, the board has been receiving legal advice from the prosecutor's office, as well as assistance determining the roles and separation from Bonner County.

The Bonner County Clerk responded to the sheriff's office's claims of mismanagement with the following statement:

I have been made aware of a statement released by Sheriff Daryl Wheeler regarding an investigation into embezzlement at the Bonner County Fairgrounds. In that statement, he suggests that my office did not exercise appropriate oversight over the Bonner County Fair Board. This assertion is factually incorrect. My office is not, and has never been, responsible for auditing fairgrounds expenses other than salaries and benefits, which are tax funded. All other operational expenses at the fairgrounds are funded by revenues generated at Fair events and are outside the purview of Bonner County’s internal auditors. Likewise, Bonner County’s external auditors have never been tasked with substantive review of fairgrounds operational expenses in their annual audit.

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