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

All told, from 1999 to early 2001, questionable refund checks worth $2.6 million were issued by the city and listed variations of Walters's relatives names as co-payees. Those names were recorded in check registers as "Steven-Campbell, Inc.," "P.A. Steven Associates," and "P.A. Steven, Esq." The average check amount was $156,000.

Multiple calls to the Stevens' home were not returned. Phone calls to Stephanie Steven, who is listed as once living in the same Edgewater home, also were not returned. Prosecutors have moved to seize two New Jersey homes purchased by Walters and Patricia and Stephanie Steven because authorities say the properties were bought with stolen funds.

From March 2000 to November 2001, a series of seemingly legitimate -- but unauthorized -- checks listed "C.L. Alexander" or "C.L. Alexander, Esq." as the co-payee. The average check amount was $180,000.

Connie Alexander, one of those charged in the case, is accused in court papers of creating a phony company to help cash illegal refund checks from 2004 to 2007.

Over time, especially from 2002 to the present, the pattern of suspicious refund payments appeared to grow in bravado and sophistication and grew to include a handful of companies that prosecutors say were shams created by Walters's family members or friends.

Starting then, refund checks were issued, at a rate of one or two a month at first, to a handful of companies named "Legna Home Services" and "Chappa." Prosecutors have identified the companies in court papers as fronts that were created by Turnbull, Walters's niece. Other phony companies created by her brother and nephew were also recipients of numerous refund checks, according to records and charging papers.

The dollar value for these unauthorized, suspicious checks grew quickly after 2004. From January 2005 to early 2007, the average check amount was $376,000. This year, the amounts got even higher, closing in on a half-million dollars.

The trouble came to light after Turnbull deposited a $410,000 check at a SunTrust Bank branch. The check was issued to First American Home, in care of David Fuss, a D.C. tax attorney. The bank contacted Fuss, who said he had no association with First American or Turnbull and suggested that something was wrong. The FBI then began its investigation.

Staff writer David Nakamura and staff researcher Meg Smith contributed to this report.