FORMER BANK MANAGER SENTENCED TO OVER 6 YEARS IN PRISON IN D.C. PROPERTY TAX REFUND FRAUD SCHEME

Deposited Almost $18 Million in Fraudulently Obtained  D.C. Government Checks and Received Over $366,000 in Cash for His Assistance

Greenbelt, Maryland – U.S. District Judge Alexander Williams, Jr. sentenced Walter Jones, age 34, of Essex, Maryland, today to 78 months in prison, followed by three years of supervised release for conspiracy to commit money laundering in connection with a property tax refund scheme in which over $48 million were stolen from the District of Columbia Office of Tax and Revenue, announced United States Attorney for the District of Maryland Rod J. Rosenstein and U.S. Attorney for the District of Columbia Jeffrey A. Taylor. Judge Williams also ordered that Walter Jones pay restitution of $17,941,817.30

“This case dramatically illustrates the importance of banks as gatekeepers to our financial system,” said U.S. Attorney Rod J. Rosenstein. “Honest bank employees identify and report suspicious transactions. Corrupt bank officials facilitate criminal activity and undermine the integrity of our banking system.”

According to his plea agreement, Jones was employed by a bank, first as a banking center service manager, and then as an assistant manager. Jones met Harriette Walters in 1994 or 1995 when she was a bank customer. They became friends and Harriette Walters gave Jones monetary gifts of approximately $1,000 per gift, for assisting with her banking transactions.

At the request of Harriette Walters and other co-conspirators, between 2000 and 2006 Jones deposited 61 fraudulently obtained District of Columbia government checks totaling $17,941,817.30. Individual checks ranged in amounts from approximately $71,777 to $490,000. On several occasions, Harriette Walters called Jones to tell him that someone would be arriving at the bank with a District of Columbia government check and provided Jones with instructions as to how the proceeds of the checks should be distributed. Jones also distributed the proceeds of the checks according to the instructions of other co-conspirators, including Jayrece Turnbull, Ricardo Walters, Richard Walters, Connie Alexander and Samuel Pope. For example, in October 2006 Jones prepared 15 cashier’s checks payable to other co-conspirators or businesses at the direction of Richard Walters, who had deposited a $460,000 District of Columbia government check at the bank.

Jones received cash gifts, including gifts of $25,000, $50,000 and $100,000, from co-conspirators in exchange for processing these fraudulent checks. In all, Jones received a total of at least $366,000 for his assistance in the scheme.

Harriette M. Walters, age 52, of Washington, D.C., pleaded guilty in the U.S. District Court for the District of Columbia and faces a maximum sentence of 20 years in prison for wire fraud and money laundering conspiracy; 10 years for District of Columbia tax evasion; five years for federal tax evasion; and an order to pay restitution in the amount of $48,115,419.09. U.S. District Judge for the District of Columbia Emmet G. Sullivan has scheduled her sentencing for March 25, 2009 at 11:00 a.m. Alethia O. Grooms, age 52, of Clinton, Maryland and Samuel Earl Pope, age 61, of Washington, D.C. also pleaded guilty to their participation in the scheme. Judge Sullivan scheduled their sentencing for February 24 and 26, 2009.

Jayrece Turnbull, age 34, of Bowie, Maryland, who is Harriette Walters’ niece, pleaded guilty in the U.S. District Court for the District of Maryland in Greenbelt, to her participation in this tax refund scheme in which she deposited over $24 million in fraudulently obtained government checks into accounts she controlled. She faces a maximum sentence of 10 years in prison for receipt of stolen property; 20 years in prison and a fine of $500,000 or twice the value of the transactions involved, whichever is greater, for conspiracy to commit money laundering; 30 years for mail fraud; and five years and a fine of $250,000 or twice the gain or loss, whichever is greater, for tax evasion. Judge Williams has scheduled her sentencing for February 4, 2009 at 9:30 a.m.

Judge Williams sentenced Ricardo R. Walters, age 33, of Ft. Washington, Maryland, on July 23, 2008 to 78 months in prison for receipt of stolen property and conspiracy to commit money laundering, and ordered Ricardo Walters to pay $4,205,318 in restitution. Judge Williams sentenced Richard Walters, age 49, of Bowie, Maryland, who is Harriette Walters’ brother, on November 4, 2008 to 51 months in prison for receipt of stolen property and conspiracy to commit money laundering, and ordered Richard Walters to pay $4,900,199 in restitution. On December 8, 2008, Judge Williams sentenced former IRS employee Robert O. Steven, age 55, of Edgewater, Maryland, to 46 months in prison, and his wife Patricia A. Steven, age 73, of Harwood, Maryland, to 70 months in prison, for receipt of stolen property and conspiracy to commit money laundering in connection with the scheme and ordered that each pay $8,833,310.32, and, in order to satisfy such money judgment, to forfeit three Jaguar cars, two residences, jewelry and monies held in four bank accounts. On December 11, 2008, Marilyn Yoon, age 40, of Derwood, Maryland, was sentenced to a year and a day in prison for possession of property obtained by fraud and Judge Williams also ordered that Yoon pay restitution of $526,130.

Connie Alexander, age 53, of Bowie, Maryland has also pleaded guilty to participating in the scheme and faces a maximum sentence of 10 years in prison for receipt of stolen property and 20 years in prison for conspiracy to commit money laundering at her sentencing scheduled by Judge Williams for February 12, 2009.

United States Attorneys Rod J. Rosenstein and Jeffrey A. Taylor thanked the Federal Bureau of Investigation; the Internal Revenue Service – Criminal Investigation; the Inspector General’s Office for the District of Columbia; the District of Columbia Office of Tax and Revenue, Criminal Investigation Division; the Treasury Inspector General for Tax Administration; and the District of Columbia Office of the Chief Financial Officer, Office of Integrity and Oversight for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Jonathan Su and Deborah Johnston from the District of Maryland and Assistant United States Attorneys Timothy Lynch and David Johnson from the District of Columbia, who are prosecuting the case.

RICHARD WALTERS SENTENCED IN D.C. PROPERTY TAX REFUND FRAUD SCHEME

Brother of Ringleader Deposited $4,900,199 in Fraudulently Obtained D.C. Government
Checks and Received At Least $1,284,574 in Monies and Home Improvements

Greenbelt, Maryland – U.S. District Judge Alexander Williams, Jr. sentenced Richard Walters, age 49, of Bowie, Maryland, today to 51 months in prison followed by three years of supervised release for receipt of stolen property and conspiracy to commit money laundering in connection with a property tax refund scheme in which over $48 million were stolen from the District of Columbia Office of Tax and Revenue, announced United States Attorney for the District of Maryland Rod J. Rosenstein and U.S. Attorney for the District of Columbia Jeffrey A. Taylor. Judge Williams also ordered that Richard Walters forfeit $4,900,199 and, in order to satisfy such money judgment, to forfeit a home in the Virgin Islands, two homes in Bowie, Maryland, a 2005 Bentley, four other vehicles, jewelry and monies held in several bank accounts.

U.S. Attorney Rod J. Rosenstein stated, “Richard Walters and Harriette Walters deposited fifteen District of Columbia government checks totaling almost $5 million into a bank account in the name of his plumbing business over a period of six years. We will seek the forfeiture of all criminal proceeds and property purchased with stolen money because victims deserve restitution and criminals must not be permitted to profit from their crimes.”

According to the plea agreement, Richard Walters is the brother of Harriette Walters, a former manager within the District of Columbia Office of Tax and Revenue. Richard Walters owned and operated a plumbing business called “Helmet’s Plumbing.” From March 2001 to May 2007, Richard Walters, and on occasion, Harriette Walters with Richard’s knowledge, deposited 15 District of Columbia government checks totaling $4,900,199 into a bank account Richard Walters maintained for his plumbing business. Richard Walters knew that the checks had been obtained by fraud as part of a scheme to embezzle funds from the District of Columbia government. The individual checks ranged in amounts from approximately $95,148 to $541,100.

On many occasions, Harriette directed Richard to take the checks to a bank and have Walter Jones, a bank manager, deposit them into the Helmet account. In addition, on several occasions, Richard Walters deposited a fraudulent District of Columbia government check and immediately thereafter directed Walter Jones to prepare cashier’s checks to recipients of Richard’s choosing.

From July 2001 to November 2007, Richard and Harriette Walters distributed funds from the Helmet account, including at least: 46 transactions directing $1,059,307.50 to accounts controlled by Richard Walters; 14 transactions directing $225,266.87 towards projects for a home that Richard Walters was building in the U.S. Virgin Islands; 11 transactions directing $461,000 to Harriette Walters; $47,149 to the Washington Wizards to purchase season tickets; $40,000 to Neiman Marcus; and $18,100 to Saks Fifth Avenue for purchases. Richard Walters also purchased a 2005 Bentley automobile with proceeds of the fraud.

Harriette M. Walters, age 52, of Washington, D.C., pleaded guilty in the U.S. District Court for the District of Columbia on September 16, 2008 and faces a maximum sentence of 20 years in prison for wire fraud and money laundering conspiracy; 10 years for District of Columbia tax evasion; five years for federal tax evasion; and an order to pay restitution in the amount of $48,115,419.09. U.S. District Judge for the District of Columbia Emmet G. Sullivan has scheduled sentencing for Harriette Walters on March 25, 2009 at 11:00 a.m. Alethia O. Grooms, age 52, of Clinton, Maryland and Samuel Earl Pope, age 61, of Washington, D.C. also pleaded guilty to their participation in the scheme, and are scheduled to be sentenced on February 24 and 26, 2009, respectively.

Patricia A. Steven, age 73, of Harwood, Maryland; Robert Steven, age 55, of Edgewater, Maryland; Connie Alexander, age 52, of Bowie, Maryland; Richard Walters, age 49, of Bowie, Maryland; Walter Jones, age 33, of Essex, Maryland; Marilyn Yoon, age 40, of Derwood, Maryland; and Ricardo R. Walters, age 33, of Ft. Washington, Maryland, have pleaded guilty in U.S. District Court for the District of Maryland to their participation in the scheme. Patricia Steven, Robert Steven, Richard Walters and Alexander each face a maximum sentence of 10 years in prison for receipt of stolen property and 20 years in prison for conspiracy to commit money laundering at their sentencing scheduled by U.S. District Judge for the District of Maryland Alexander Williams, Jr. on December 8 at 10:00 a.m., December 8 at 1:15 p..m., November 4, 2008, and February 12, 2009, respectively. Walter Jones faces a maximum sentence of 20 years in prison and a fine of $500,000 or twice the value of the transactions involved, whichever is greater, for conspiracy to commit money laundering at his sentencing on a date which is not yet scheduled. Marilyn Yoon faces a maximum sentence of 10 years in prison and a $250,000 fine for possession of property obtained by fraud at her sentencing on
December 4, 2008.

United States Attorneys Rod J. Rosenstein and Jeffrey A. Taylor thanked the Federal Bureau of Investigation; the Internal Revenue Service – Criminal Investigation; the Inspector General’s Office for the District of Columbia; the District of Columbia Office of Tax and Revenue, Criminal Investigation Division; the Treasury Inspector General for Tax Administration; and the District of Columbia Office of the Chief Financial Officer, Office of Integrity and Oversight for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Jonathan Su and Deborah Johnston from the District of Maryland and Assistant United States Attorneys Timothy Lynch and David Johnson from the District of Columbia, who are prosecuting the case.

For more information, CONTACT AUSA VICKIE E. LEDUC or MARCIA MURPHY at (410) 209-4885

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