On Monday, the festival's chair, Tammy Deel, was charged with felony theft after investigators say she embezzled money from the festival and her former employer.
According to Noble County Prosecutor Steven Clouse, Deel allegedly stole around $16 thousand from the festival's bank account over a period of less than three years.
Clouse says while investing that case, they discovered more than $120 thousand had gone missing from an account she managed at Deel's former employer, Ligonier's Director's Showcase International.
Investigators believe Deel used the money to buy appliances, designer baskets, alcohol and vacations, although they say not all of the money has been accounted for.
Organizers of the Marshmallow Festival say they will be meeting this week in Ligonier to discuss the viability of this year's event.
Deel's bond has been set at $10 thousand. She is facing two counts of felony theft and one count of felony fraud. If convicted, she could face a maximum of 14 years in prison.