Most of Money Still Missing in Scandal
FBI Tries to Find $50 Million Stolen in Scam That Netted Luxury Cars, Clothes

By Yolanda Woodlee
Washington Post Staff Writer
Saturday, April 26, 2008

Nearly six months after the first arrests in the D.C. tax scandal, only a fraction of the money stolen from the D.C. Office of Tax and Revenue has been recovered, according to recent court documents.

Federal authorities are trying to find up to $50 million stolen in an embezzlement scheme run out of the tax office. So far, the FBI has seized about $4 million from bank accounts, three luxury cars, designer clothing and other items, according to papers filed by prosecutors this month in U.S. District Court.

An FBI affidavit provides the most up-to-date account of law enforcement activities surrounding the biggest corruption scandal in the city's history.

Ten people have been arrested, including two described as the leaders of the alleged scam to get illegal property tax refunds: Harriette Walters, a former tax office manager; and her niece, Jayrece Turnbull. Walters and Turnbull are being held without bond on federal charges.

The affidavit said that authorities have determined that more than $14 million in stolen money flowed through accounts controlled by Turnbull before being moved to "other accounts and conspirators."

Authorities traced more than $8.5 million to accounts under Walters's control, the affidavit said. Nearly $2.5 million was deposited into accounts controlled by Walters's brother, Richard Walters, who is also charged in the case, the affidavit stated.

The affidavit provided another example of the steps being taken by investigators to find the money. While executing a search warrant in St. Thomas, U.S. Virgin Islands, the affidavit said, federal agents learned that Richard Walters had wired $30,000 to Metro Motors SC in St. Croix. The money was used to buy a 2007 Ford Sport Trac, which authorities asked the court for permission to seize.

Authorities said earlier that they had tracked receipts showing that Harriette Walters spent more than $1.4 million at Neiman Marcus. The affidavit revealed that about $500,000 in purchases were traced to Saks Fifth Avenue, with other purchases at Louis Vuitton, Nordstrom and Macy's stores.

"To date, the Federal Bureau of Investigation has seized in excess of $4 million from bank accounts, a Bentley, two Mercedes, more than 100 designer handbags, over 100 pair of designer shoes, boots and items of clothing, and other evidence," the affidavit said.

Staff writer Carol D. Leonnig contributed to this report.