Anatomy of an Embezzlement Scam
Sunday, September 28, 2008
Samuel E. Pope needed money fast. The landlord raised the rent on his Head to Toe hair salon in Southwest Washington, the bills were piling up, and he was on the verge of closing.
"That's when Harriette came in," Pope recalled. "Basically, she said, 'Well, maybe I can help you.' "
With that simple line, Harriette Walters drew Pope into the biggest embezzlement scandal in the District government's history. In May 1991, he agreed to take fraudulent property tax refund checks, created by Walters at the D.C. tax office where she worked, and to share the money with her. He was among the first to sign onto the scam.
"It was to be a one-shot deal," Pope, 61, said. "I just needed to get caught up on my bills and rent. But it happened again and again. The needs kept coming up."
Pope got hooked on the fast, easy money, like everyone else Walters brought in: the college classmate, the fashion aficionado and her husband, the blackjack dealer, the banker, the relatives and, finally, the personal shopper.
Based on interviews and court documents -- including the first account from an insider -- new details have emerged that show how Walters assembled and deployed her team of thieves, ordinary people from different walks of life. She sized them up over a period of years, proving herself a good judge of people's vulnerabilities. Then, using friendship, family ties and trust, she reeled them in.
Pope had confidence that Walters could pull it off, and for 18 years, she did, raking in more than $48 million. At the same time, Pope said, he knew that if Walters went down, the others could follow. For a while, Pope hoped the statute of limitations might save him. Now he, Walters and eight others have pleaded guilty, and one more person is awaiting trial. Few have publicly expressed remorse.
Walters, 52, surrounded herself with those who shared her interests: fashion, gambling, travel. Joining the scheme didn't require any particular skill, except for the ability to create real and phony companies and deliver, deposit and cash illegal checks. It was all quite informal, and they all didn't even know one another.
Yet, when Walters called to say "the package is ready," they all knew what she meant.
Walters met Alethia Grooms in 1989 when they took an accounting class at the University of the District of Columbia. Walters, who moved to Washington from the Virgin Islands more than a decade earlier to attend college, went to school while working at the tax office. Grooms worked in the university comptroller's office. She later became a real estate agent.
The two became friends, and Walters told Grooms about her plan to steal from the city using fraudulent refunds. Walters, who was hired at the tax office in 1981, patterned the scam on a rip-off that she came across at work and was preparing to make some money on her own.
"Harriette was looking for someone to cash small checks," said Kevin McCants, Grooms's attorney. Grooms was the first to join in. She got the first check, dated June 27, 1989, for $4,060, and she shared the proceeds with Walters.