U.S. DISTRICT COURT
Pair Sentenced in D.C. Tax Office Scam
Tuesday, December 9, 2008
A Maryland couple who admitted raking in millions in the D.C. tax embezzlement scheme and using the money for homes, cars and other big purchases were sentenced yesterday to federal prison.
Patricia A. Steven, 73, and her husband, Robert, 55, made separate appearances before a federal judge in Greenbelt. She was sentenced to five years and two months in prison. He got three years and 10 months.
Although both pleaded guilty to charges of conspiracy to commit money laundering and receipt of stolen property, prosecutors said Patricia Steven had a larger role.
U.S. District Judge Alexander Williams Jr. said those who joined the scam acted in a "shameful and disgusting" way. Prosecutors said the thefts cost the D.C. government nearly $50 million.
"It's really hard to even put a description on what happened here. What occurred here is almost mind-blowing," Williams said at Patricia Steven's sentencing.
The theft was masterminded by Harriette Walters, a former mid-level supervisor at the D.C. Office of Tax and Revenue, who devised a way to channel illegal property tax refunds to relatives and friends. Walters, who pleaded guilty in September, is jailed while awaiting sentencing in the case.
According to papers filed by federal prosecutors, Patricia Steven was a friend and mentor of Walters and got involved in the scam in May 1990. The refund checks were deposited into a bank account for a wedding consulting business, Bellarmine Designs, that the couple operated, the court papers said. The business was small, with three or four weddings a year and generating about $10,000 in annual income, the papers said.
From 1990 to 2007, more than $8 million in D.C. tax refund checks and cash were deposited into the Bellarmine Designs bank account, prosecutors wrote. Even after the business dissolved in 2000, Patricia Steven continued to use its account to deposit more than $3 million in D.C. government checks and cash, prosecutors said.
Prosecutors have said that the Stevens used the money to buy two Maryland houses, one in Edgewater and one in Harwood; four Jaguar vehicles; tropical vacations; and diamonds and other jewelry worth more than $150,000.
In court yesterday, Assistant U.S. Attorney Jonathan C. Su asked Williams to sentence Patricia Steven to seven years and three months in prison, at the high end of advisory sentencing guidelines.
Patricia Steven's attorney, Michael E. Lawlor, acknowledged that his client's actions amounted to "unmitigated greed." But citing her physical condition and age, Lawlor asked for leniency. Lawlor said that Patricia Steven suffers from osteoporosis, uses a cane and is prone to falling.
Williams cited Steven's age in explaining why he gave her a sentence at the lower end of the guidelines. Still, the judge noted that a pre-sentencing report said Patricia Steven, who once worked as a manager in a doctor's office, had a history of dishonesty, claiming to be a physician and lying to her husband about her age.
The judge ordered Patricia Steven to pay $200 a month in restitution once she leaves prison.
Unlike his wife, Robert Steven cooperated with investigators. His defense attorney, Marc G. Paul, said he initially was misled about the source of the money coming the couple's way. Patricia Steven said she had an inheritance, Paul said. As years went by and the money accumulated, Robert Steven became suspicious, "but he felt he needed to be loyal to his wife," Paul said.
Robert Steven, a former computer analyst for the Internal Revenue Service, apologized to District taxpayers and public service employees.
His wife also expressed contrition: "All I can say is, I am very sorry," she said.