D.C. Tax Scandal At $44.3 Million, Analysis Finds

A total of 130 checks -- worth $41.1 million -- should have been reviewed by the director of real property tax administration, a position held in recent months by Thomas Branham, one of those ousted by Gandhi. Branham's attorney has said that Branham played no role in the tax scandal.

Ninety-five of the checks were written for more than $250,000 apiece and should have been moved all the way up to the director of the tax office, a job held by Sherryl Hobbs Newman since 2005.

Hobbs Newman, who was forced out Nov. 7, the day of Walters's arrest, has issued a statement saying she did nothing wrong. She later testified at a council hearing that Walters did not forward the checks to any higher-ups.

Early this decade, the District's Integrated Tax System was rolled out under Gandhi to modernize financial control over revenue. Officials said they have yet to determine why no one noticed that tens of millions in refunds were issued for locations that were not in the $130 million tax system.

So far, six people have been charged with bank fraud, mail fraud and conspiracy. In addition to Walters and Gustus, they are: Walters's brother Richard J. Walters; her niece Jayrece Turnbull; her nephew Ricardo Walters; and her friend Connie L. Alexander.

The Post's analysis relied upon a database of 9,800 property tax refund checks that the Office of Tax and Revenue has issued since June 1999, the oldest computerized records available.

Starting as early as then, the questionable checks typically were issued to legitimate companies and mirrored refunds the firms had been issued years earlier. Nine listed Harriette Walters's extended family members as co-payees who also could cash the check. Some of those people have not been charged, and it is unclear whether they personally cashed the checks or benefited in any way.

During this time, Walters, who had been hired for a clerk job in the District government in 1981, was a rising employee in the tax unit. She was well-regarded by her bosses for her ability to get the job done and resolve taxpayers' complaints.

On July 1, 1999, the city issued a $122,413 tax refund to Taliafaro Inc., a Nashville-based property management company. The refund was not authorized by court order, according to D.C. Superior Court records, and Taliafaro didn't own the specific D.C. property listed for the refund check.

The check listed "R.O. Steven" as a co-payee. Robert O. Steven is one of Walters's relatives. Prosecutors recently asked a judge to bar the defendants from contacting Steven, saying that doing so could interfere with the investigation.

On Aug. 20, 1999, the city issued a refund check for $187,167 to Winkler Co., an Alexandria-based firm that owned and managed some apartment buildings in the city. A company official said the firm has no record of receiving the money. The co-payee on the check was "Steven-Campbell."

Another check, issued to a Nashville property manager, lists "P.A. Steven" as the co-payee. Patricia A. Steven is one of Walters's relatives, and real estate records list her as sharing an address in Edgewater with Robert O. Steven.