TAX OFFICE SCAM
'Remorseful' Friend of Accused Ringleader Pleads Guilty
Thursday, August 14, 2008
A former friend of the woman at the center of the D.C. tax scandal pleaded guilty yesterday to charges stemming from her participation in a scheme that authorities allege siphoned nearly $50 million from the District government.
In pleading guilty to possession of stolen property, money laundering and mortgage fraud, Alethia Grooms, 52, admitted in U.S. District Court that she had accepted about $650,000 in funds tied to the scam. She had been scheduled to plead guilty July 30 but disputed key facts presented by the government. Judge Emmet G. Sullivan continued the hearing until yesterday.
Grooms said she no longer disputes the facts involving the acceptance of a $145,000 cashier's check last year from Harriette Walters, a former mid-level employee in the D.C. tax office who is accused of being the scam's ringleader.
"I'm pleading guilty because I am guilty," Grooms said.
Nine people, including Grooms, have pleaded guilty in the tax scandal, which became public in November. Three people still face charges: Walters; her niece Jayrece Turnbull; and former tax office employee Diane Gustus.
Walters, who remains in jail on charges tied to the scam, has been cooperating with investigators.
Authorities allege that she used her position to issue fraudulent property tax refund checks to businesses and friends. Grooms admitted in court that she began accepting fraudulent refund checks from Walters in 1989.
Over the years, Grooms collected $463,000 in refund checks and $42,000 in personal checks from Walters, according to court papers filed by assistant U.S. attorneys Timothy G. Lynch and David S. Johnson.
As part of the plea deal, Grooms admitted to using her computer skills to create forged pay stubs and W-2 forms to help three other people, including Turnbull, obtain mortgages.
Grooms also admitted yesterday that she helped Walters launder $145,000 in proceeds from the tax refund scam. Walters apparently needed to have the money laundered through Grooms's bank account to help Walters with a real estate transaction in New Jersey, prosecutors wrote in court papers.
At Grooms's initial plea hearing July 30, she said she did not know the $145,000 had been stolen from the District. She said prosecutors had not described the deal "as how it happened."
Her attorney, Kevin McCants, said yesterday that Grooms still denies knowing the money had been stolen from the District but that she admitted to helping Walters launder the funds.
Grooms, who was freed pending sentencing, declined to comment after the hearing. Under federal sentencing guidelines, she could face 37 to 46 months in prison. No date was set for the sentencing.
According to court papers, Grooms and Walters met while taking classes at the University of the District of Columbia in the 1980s. They often gambled together, and Grooms acted as Walters's real estate agent when she bought her Northwest Washington home for $420,000 in 2000.
By cooperating with the government, Grooms hopes to get a more lenient sentence, McCants said. "She feels quite remorseful," he said.