Employee and Boyfriend Charged in Another Refund Scam
Wednesday, June 4, 2008
A D.C. government employee and her boyfriend were charged yesterday with netting more than $180,000 in another alleged tax scam against the D.C. Office of Tax and Revenue.
Tax office employee Jacqueline C. Wright, 40, and her boyfriend, Michael Clark, 31, were charged with mail fraud in a scheme that prosecutors said began in late 2006. Wright manipulated a government computer system to engineer phony refunds that went to Clark, and the two then shared the proceeds, prosecutors said.
Prosecutors wrote in the charging documents that Wright and Clark used much of the money -- just over $100,000 -- on home improvement projects.
The charges come at a time when the city is reeling from the case of Harriette Walters, the former tax office manager accused of embezzling millions through phony tax refunds. Eleven people have been charged in that investigation, which authorities have called the biggest corruption case ever involving the D.C. government. That scheme, which allegedly stretched back almost 20 years, is estimated to have cost the D.C. government as much as $50 million.
Authorities said the cases are not connected.
A spokesman for the U.S. attorney's office declined to comment on yesterday's charges, which were filed in U.S. District Court. The charges were made in what is known as a "criminal information." Such a document can be filed only with the defendant's consent and typically signals that a guilty plea is imminent.
District officials said they detected the thefts in March, thanks to "new controls" put in place shortly after Walters was arrested in November. They referred the matter to law enforcement authorities, said David Umansky, a spokesman for the District's chief financial officer, Natwar M. Gandhi.
According to the charging papers, Wright and Clark waited several months after hatching the scheme to put it into action because they were worried about getting caught. The stealing allegedly began in March 2007, when Clark filed a D.C. income tax return that requested a refund of $310, even though he was owed no money for the previous year.
Wright then used the District's Integrated Tax System, a computer program, to alter Clark's refund amount to $11,610, the charging papers state. The government issued Clark a check in that amount, and he cashed it, later giving Wright $5,850, the documents say.
Just two weeks later, prosecutors wrote, Clark submitted a second fake tax return that said he was owed a refund of $40,192. The government issued him a check in that amount, and he gave Wright a cashier's check for $15,000, prosecutors wrote.
In April, Wright manipulated the computer system to issue Clark a second $11,610 refund on the grounds that he had lost the first one, prosecutors said. A month later, she exploited the computer system to reissue the $40,192 refund for the same reason, prosecutors wrote.
In June, Wright repeated the scam, prosecutors wrote, and the government issued Clark yet another check for $40,192.
Wright did the same thing to generate another $40,192 check in September, prosecutors alleged. But this time, the refund amount increased by $33.03 because the government thought it owed Clark interest for not delivering the refund on time, the charging papers say.
All told, Clark received about $184,000 in illicit refunds, the charging papers state. He allegedly gave Wright at least $85,000.
The scam unraveled, authorities said, when Wright and Clark made one more attempt at theft -- within months of Walters's arrest, at a time when enormous attention was focused on the tax office. In March, prosecutors wrote, Clark filed a fake tax return seeking a refund of $40,785. The payment was never made because the scheme was detected, prosecutors wrote.