D.C. Tax Scam Total Rises to $20 Million, Officials Say

FBI agents continued interviewing tax office employees yesterday and cataloguing hundreds of items of evidence seized at the homes and workplaces of those accused. Investigators found more than 100 pieces of jewelry at Walters's home, including diamond rings and diamond, sapphire or ruby necklaces.

[an error occurred while processing this directive]

At the morning gathering at the Convention Center, Ben Lorigo -- whom Gandhi named acting director of the tax and revenue office after Sherryl Hobbs Newman resigned -- told employees: "The checks and balances have failed. Management has to be responsible. There was a very serious breakdown in internal control. I mean very serious."

In an interview, Lorigo said he is not certain whether Walters was required to get clearance from a superior before issuing refund checks. From now on, he said, all refunds of $10,000 or more will require his clearance. Because of glitches in the tax office's new $150 million computerized tracking system, the property tax office still processed refunds manually.

Lorigo has been in charge of running audits and investigations of various departments that report to Gandhi, but he acknowledged that in his five years on the job, he never scrutinized the real property tax division.

Asked why he didn't, Lorigo said: "That is a question I have pondered in my own mind."

Staff writers Paul Duggan, Nikita Stewart, Clarence Williams and Yolanda Woodlee and researcher Meg Smith contributed to this report.