Entrenched Corruption In D.C. Tax Office

A heavily entrenched culture of mismanagement and corruption allowed a veteran public employee in the District of Columbia’s tax and revenue office to embezzle nearly $50 million over two decades without anyone ever questioning the rampant fraud.

In fact, the official (Harriette Walters) who masterminded the massive scheme actually received on-the-job fraud training from co-workers in the department when she got hired in the 1980s. She and her colleagues took cash and gifts from property owners in return for erasing penalties on overdue bills, stole refund checks issued to dead residents and approved fraudulent tax refunds to family members who used the money to buy luxury cars, homes, jewelry and expensive clothes.

This week Walters, who was initially charged last November, pleaded guilty to wire fraud, money laundering and a series of other charges and she could face up to 18 years in prison. The big question is will there be accountability at the top since the corruption is obviously deep-rooted in the department and not limited to just one employee.

Even the federal judge in the case wondered how the scheme could have gone on for so long without any checks and balances. “It strikes me as amazing that this criminal activity can go undetected for 20 years and nobody knew she was stealing,” the U.S. District judge, Emmet Sullivan, pointed out at a hearing.

The crimes were easily committed through the administration of four different mayors and prosecutors say there were ample opportunities for someone to catch on to the huge scam or the suspiciously lavish lifestyle that Walters led on her $81,000 annual government salary.

She never bothered concealing her upscale European vacations, Las Vegas gambling trips, shopping sprees—for expensive jewelry, fur coats and designer handbags—at high-end stores or her multiple houses and imported luxury cars.

While the rest of the department looked the other way, a private bank clerk, who grew suspicious of the large tax refunds being deposited, finally alerted authorities to investigate.