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Clerk of Court resigns after she is charged with embezzlement

Beaufort County Clerk of Court Elizabeth Smith resigned from office Thursday, hours after a Beaufort County Grand Jury indicted her on charges of embezzling more than $23,500 from public accounts to buy insurance policies for family members andmake payments on a home on Pawleys Island.

Fourteenth Circuit Solicitor Duffie Stone announced that Smith, who was elected to the office that pays a salary of $74,138, has been indicted on four counts of embezzlement of public funds and one count of misconduct in office. Smith's attorney, however, said the investigation has yet to turn up any evidence that Smith took money from the accounts that she hadn't been paid back.

"They haven't finished their investigation yet but, to my knowledge, the investigation hasn't revealed any money missing," Beaufort attorney Mike Macloskie said Thursday. He met with S.C. Ethics Commission investigators Wednesday.

The indictment alleges that Smith wrote checks amounting to $3,435 from her office's Circuit Court Fines and Fees Account to Genworth Life and Annuity Insurance Co. and First Colony Life Insurance Co. every August from 2006 through 2008. An investigation by the Ethics Commission indicated the checks were payments on insurance policies, probably for her sister's children, Stone said. Smith faces up to five years in prison on each count of embezzlement if convicted, according to state law.

Smith also is accused of embezzling $13,206 from the Clerk of Court Bondsmen Account, a fund that local bond companies pay into that allows them to do business in Beaufort County. The indictment alleges that Smith wrote checks between March 24 and April 6 from the account toward a Pawleys Island home owned by a family trust of which Smith was a co-trustee. She faces up to 10 years if convicted on that count because the amount embezzled exceeds $5,000.

Former Deputy Clerk of Court Janice Young mentioned problems in the bondsmen account during a meeting with county finance director David Starkey and deputy county administrator Bryan Hill in June, according to a Sheriff's Office incident report. Young told Starkey and Hill that auditors from the Ethics Commission needed to thoroughly review the bondsmen account "specifically in the month of March 2009," the report said.

Smith will be arraigned on all charges in Beaufort County Circuit Court,but Stone said a hearing date has not been set. The proceeding is expected to serve as Smith's bond hearing and when she will enter her plea regarding the charges. She will not be arrested or booked into the Beaufort County Detention Center in the interim, Stone said.

Smith resigns

Less than 15 minutes before the start of Stone's 2 p.m. press conference in Bluffton, Smith sent her resignation to Gov. Mark Sanford. The faxed letter does not cite the indictments and says only, "As of (July 30), I am resigning from the Office of Clerk of Court for Beaufort County." The letter also was sent to the S.C. Supreme Court.

Stone said he also faxed a letter to Sanford's office, notifying the governor of the indictments against Smith. Sanford is responsible for naming Smith's interim replacement.

Joel Sawyer, spokesman for Sanford, said Thursday that the Governor's Office would name a replacement "as soon as possible."

Macloskie said Smith was "distressed" by the indictments but wasn't going to let them serve as a distraction to her staff at the courthouse.

"Elizabeth is trying to do the right thing," Macloskie said. "She resigned from her office because she doesn't want whatever is happening with her personally to disrupt the work being performed by this very important county office."The Clerk of Court's Office oversees the day-to-day operation of the Beaufort County Courthouse.

Attempts to reach Smith were unsuccessful.

State law requires that the county hold a special election to elect a new clerk of court on the 18th Tuesday following Smith's resignation, putting the special election Dec. 1.

Gary Kubic, Beaufort County administrator, said he is unsure who will run the Clerk of Court's Office while the governor mulls possible replacements.

"Our administration will work with anyone to deliver continuity in our court system, no matter who that is," he said. "It's a sad thing for me. It's a sad day for the community at large. No one ever wants something like this to happen."

If convicted of the embezzlement charges, Smith could hold public office again only if the money is repaid andshe is approved by two-thirds of the General Assembly.

Under Investigation

Smith's office has been the subject of a 2 1/2-month investigation by the Ethics Commission, which referred its findings to Stone because of possible criminal activities, according to Herb Hayden, the commission's executive director.

The investigation became public after Young, the former deputy clerk and a friend and co-worker of Smith's, reported June 16 she had been "threatened" during a phone call by Smith's husband, county Drug Court Judge Manning Smith.

According to an incident report from the Sheriff's Office, Manning Smith was upset that Young talked to county officials about the Ethics Commission investigation.

According to the report, Young said Manning Smith told her, " ... handing your boss over was like me saying, 'I'm going to murder you, Janice, shoot you in the head and spatter your brains all over the sidewalk.' "

Young dropped the complaint with the Sheriff's Office two days after she filed it. Manning Smith denied he had threatened Young and said his comments had been misunderstood, the report said.

Stone said that the Ethics Commission investigation was ongoing and declined to say if other indictments might be filed.

"The Ethics Commission still has a number of accounts to review," Stone said. "There's still a good bit of this investigation still to go."

Also present Thursday was Dan Choate, one of two S.C. Ethics Commission investigators reviewing the finances of the Clerk's Office. Choate said he could not say how much longer the investigation would last or if anyone else in the Clerk's Office was being investigated.

License in jeopardy?

In addition to serving as Beaufort County Clerk of Court, Elizabeth Smith is a member of the State Bar Association.

Thursday's indictments could affect Smith's ability to practice law in the state, said Lesley Coggiola, disciplinary counsel for the Commission on Lawyer Conduct, an arm of the S.C. Judicial Department that investigates complaints against lawyers.

Coggiola said an indictment of a member of the state bar could lead to the commission filing a request for suspension of that attorney's license with the S.C. Supreme Court. The court could grant the request at its discretion but would have to suspend Smith if she is convicted.

"Sometimes, we'll wait to take action until the criminal charges are adjudicated, but we'll have an open file on that lawyer," she said.

A conviction on a serious offense could also lead to permanent disbarment, Coggiola said.

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