CHARLESTON, W.Va. -- One of the founders of the Charleston MultiFest festival pleaded guilty to income tax fraud Friday morning in federal court, after admitting that she embezzled more than $300,000 from the nonprofit organization.
Deborah Starks, 55, of Cross Lanes admitted to embezzling $306,872 from the MultiCultural Festival of WV Inc. -- group that runs MultiFest -- between 2005 and 2010.
Starks also admitted to lying on her income tax returns by not reporting more than $506,000 in income during that five-year period. That included the embezzled money, as well as nearly $200,000 in unrelated income she received over that time.
Prosecutors said an investigation into the festival's finances found that Starks, who served as the organization's treasurer, made ATM cash withdrawals and wrote checks from festival accounts to herself and others to whom she owed money.
"The funds were used in large part to support Ms. Starks' gambling addiction," said assistant U.S. Attorney Eumi Choi.
The annual festival has received assistance from state, county and city organizations for many years.
Members of the Kanawha County Commission have scrutinized the festival's finances for some time and expressed concern with Starks' plea.
"The community and MultiFest deserve better," Commission president Kent Carper said in a statement.
"If MultiFest is able to continue and wishes to receive funding in the future from the Kanawha County Commission, those running MultiFest will have to be strictly accountable and there must be honest people in charge," Carper said.
Starks and her husband Stephen have organized the annual multicultural festival since 1989.
In court, she said her husband had no knowledge of her crimes.
"I take full responsibility for my actions," she said, "and I am very, very sorry."
For the felony count of tax fraud, Starks faces up to three years in prison to be followed by a year of supervised release, plus a $250,000 fine.
She will also have to pay full restitution to MultiFest, as well as $128,626 in back taxes to the IRS.
Judge John Copenhaver scheduled a sentencing hearing for April 2 and released Starks on $10,000.