Three Times Immaterial
When authorities finally discovered the embezzlements in the Washington, DC tax office, they initially reported that about $16 million had been stolen by Harriette Walters and her accomplices. At the time, the chief financial officer for the city called the thefts "immaterial." Investigators now believe the total stolen money is probably closer to $50 million. Call it immaterial with interest.
Federal authorities think that nearly $50 million was stolen in an embezzlement scheme run out of the D.C. tax office, more than double the amount they had previously uncovered, four sources close to the investigation said.
The corruption at the D.C. Office of Tax and Revenue went undetected much longer than initially thought, the sources said, extending back almost 20 years. In addition to tracking the missing money, authorities are looking into gifts suspected of being provided to co-workers and others by the woman accused of leading the scam, former tax office manager Harriette Walters.
The scheme is the largest corruption case in the city's history. Witnesses have told investigators that Walters, who is accused of issuing larger and larger bogus tax refund checks over the years, lavishly spread the wealth, the sources said.
Security guards got cash, office mates got free meals and virtually anyone who made a request got something, said the sources, who spoke on condition of anonymity because the investigation is ongoing.
Two of the sources, who are familiar with the accounts of witnesses, said the gifts included $35,000 to a co-worker who wanted to remodel her house, $25,000 in cash and luxury gifts to an assistant whom Walters began mentoring and $15,000 each to help two co-workers' daughters pay for renovations and credit card bills.
Walters repeatedly lent huge chunks of cash to colleagues with no requests for repayment, the two sources quoted witnesses as saying. And, said the sources, citing witnesses, Walters paid for her goddaughter's college tuition and a New Jersey home for $855,000. The goddaughter's attorney declined to comment on the case.
Since Walters was arrested in November, authorities have issued subpoenas for financial records, interviewed dozens of witnesses and built a more complete picture of what happened, the sources said.
Prosecutors told a judge soon after Walters was arrested that they had confirmed she had helped steal $20 million in fraudulent refund checks since 2004. But the estimated losses have been growing as federal investigators have delved further into records at the Office of Tax and Revenue and found dozens more fraudulent checks made out to city employees. Sources said that the total is nearing $50 million.
It would also appear that a lot of tax office employees were getting an awful lot of money from Walters and never questioned how a mid-level bureaucrat was able to afford that kind of largess. The coworkers appear to be a singularly incurious lot. So do all the officials above Walters who never noticed $50 million disappearing. Prosecutors are looking at charging a number of people at this point under the legal doctrine of "willful blindness," and will argue that these people should have known they were watching a huge crime in progress - but chose not to as long as the money kept flowing.
By Quilly Mammoth, Wednesday, 20 February , 2008 @ 6:45 pm
If they had let her go a couple of more decades she might have reached the level of theft of one year’s Congressional "earmarks".