Raids in D.C. Tax Probe Reveal Lives of Luxury

By Carol D. Leonnig
Washington Post Staff Writer
Wednesday, November 28, 2007

A 70-piece Versace china set was displayed in the Bowie home of Harriette Walters's niece. In her closets, the FBI found 135 designer purses and 76 pairs of shoes from such labels as Ferragamo, Manolo Blahnik and Jimmy Choo.

Jayrece Turnbull, who prosecutors say has no known employment, also had 79 pieces of jewelry, much of it made of gold and pearls, the FBI said. Agents also found several Hello Kitty necklaces and pendants purchased from Neiman Marcus in the home, along with numerous other luxury items.

The details are included in just-released investigators' reports in what authorities are calling the biggest corruption case in D.C. government history. The reports, filed in federal court, list the items seized in raids Nov. 7 at the Maryland homes of Turnbull and three others charged along with her in the case. They follow a previous report that covered a search of the Washington home of Walters, the D.C. government employee charged with masterminding a long-running scheme to cash in on illegal property tax refunds.

Walters's brother Richard lived just a few blocks away from Turnbull in Bowie. He had $16,000 in cash, most of it in $20 bills, stuffed in an office safe near two handguns, the FBI reported.

Meanwhile, Diane Gustus, the D.C. tax specialist accused of aiding Walters in the scam, had numerous boxes of lottery tickets in her Clinton home, a few designer bags and eight pairs of garden-variety shoes.

The haul from the suspects' closets and cabinets is considered highly valuable intelligence and evidence for investigators trying to track what became of the money. Federal investigators are poring through hundreds of boxes loaded with high-price items, receipts and bank statements, seeking clues about how Walters and others might have spent millions of dollars. They also are trying to determine how the alleged scam continued for at least seven years without being detected by D.C. government officials.

Only in late July did investigators begin probing the D.C. tax refunds, when a bank employee in Bowie reported suspicions about a $410,000 District check that Turnbull was trying to cash for a company she couldn't prove was real.

A Washington Post analysis has found that the D.C. Office of Tax and Revenue has issued at least $34.1 million in suspicious refund checks since October 1999. The checks, more than 100 of them, were issued without the required court orders and often to companies that did not exist. The majority of the checks went to companies that have been identified in court records as shams created by Walters's relatives.

Walters, a mid-level manager in the District's Office of Tax and Revenue, is accused of engineering the rip-off. Turnbull is accused of helping move the money through banks. Richard Walters and Ricardo Walters, Harriette Walters's nephew, are accused of helping to launder the proceeds. All are charged with conspiracy, mail fraud, bank fraud and theft.

The details of the FBI raids hint at the lives of conspicuous consumption that some of the suspects were leading.

Authorities previously revealed that they seized a mink coat, a Mercedes-Benz convertible and other items from Walters's home facing Rock Creek Park. They also found 68 pairs of shoes, 16 casino cards, 90 purses, assorted jewelry and boxloads of designer clothing.

Turnbull apparently had a taste for Louis Vuitton purses, satchels and wallets; there were 41 in all. She had 28 purses from Chanel, the FBI reported. Scattered in her master bedroom closets and basement storage containers were several dozen more bags, including styles from Gucci, Prada and Cartier. Agents found two bags by Judith Lieber, best known for her ornate designs of crystals and diamonds, which can cost $3,000 to $100,000.

Louis Vuitton appeared to be Turnbull's shoe brand of choice. Agents seized 76 pairs of shoes from her basement and bedroom closets, including some from Prada, Ferragamo, Gucci, Chanel, Jimmy Choo, Armani and Kate Spade.

In a jewelry pouch in the master bedroom, agents found a string of rosary beads packed away with a strand of pearls and three Rolex watches. On a nearby dresser lay a receipt for a stay in an unidentified Paris hotel, the FBI said.

Stuffed into assorted purses and in cabinets in her bedroom and the basement was $18,015 in cash. Agents found three plasma television sets in the study, family room and basement.

In Richard Walters's home, agents found what appeared to be premium tickets for Washington Wizards basketball games -- 21 in all -- including choice contests against the Phoenix Suns, Miami Heat and Detroit Pistons.

Inside Ricardo Walters's Fort Washington home, FBI agents seized a bag of something they listed as "suspected marijuana," a box containing four Faberge eggs and a semiautomatic handgun. The FBI also found documents from "Provident Corporation," a company that prosecutors say was a sham set up to get the illegal refunds.

At each of the locations, agents took reams of records and other evidence that they hope will yield far more information about the case: bank statements, tax returns, disks, laptops and computer hard drives.

The U.S. attorney's offices in Washington and Maryland, which are jointly investigating the case, declined to comment on the raids.

Harriette Walters and Turnbull have been jailed since their arrests after federal judges deemed them flight risks. Gustus, Richard Walters and Ricardo Walters were released under varying conditions.

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