TAX OFFICE EMBEZZLEMENT
Walters the Benevolent or Walters the Greedy? Sentencing in Tax Scam Today
Tuesday, June 30, 2009
What kind of person is Harriette Walters, the mid-level D.C. tax office manager behind the largest embezzlement in District government history?
Was she a deeply insecure and lonely civil servant who stole tax refunds out of an insatiable desire to be seen as a benefactor? Or was she a manipulative and greedy employee who pilfered the District's coffers to selfishly fund an extravagant lifestyle?
Federal prosecutors and Walters's attorney will skirmish over those questions today in federal court during Walters's sentencing in the $48.1 million, nearly two-decade-long embezzlement from the D.C. government.
Under the terms of Walters's plea deal, which still awaits the approval of U.S. District Judge Emmet G. Sullivan, Walters faces 15 to 18 years in prison. Walters, who pleaded guilty to wire fraud, money laundering and other charges last year, is the last of 11 people to be sentenced in the D.C. tax scam.
In court papers, federal prosecutors have described Walters as a sophisticated, calculating woman who exploited lax oversight in the D.C. government to siphon millions of dollars from the treasury. They have urged Sullivan to sentence Walters to 18 years behind bars, saying the massive fraud hampered city services during some of the city's toughest years.
"Walters is extraordinarily greedy," prosecutors Timothy G. Lynch and David S. Johnson wrote in court papers, adding that she was "exceptionally callous about the pain of others."
"As someone who lived in the District in the 1980s, 1990s and 2000s, and particularly someone who worked in city government, Walters knew full well just how tough times were for the District of Columbia and its vulnerable citizens," the prosecutors wrote. "Yet, she stole anyhow, repeatedly and in amounts that shock the conscience."
Walters, 52, has admitted issuing more than 230 fraudulent property tax refund checks to friends and co-conspirators starting in 1989. Between 2000 and 2007, her most prolific period, she issued 152 fraudulent refund checks worth $42 million.
With the stolen cash, Walters made 45 gambling trips to Las Vegas and Atlantic City and charged more than $2.3 million during shopping sprees at such high-end stores as Nordstrom and Neiman Marcus, where she had a personal shopper, prosecutors have said.
When agents raided her Northwest Washington home, they discovered 13 luxury watches, including a platinum and diamond Rolex worth $26,000, prosecutors wrote, and more than 125 designer purses and wallets. Authorities believe they have recovered about $10 million in cash and assets.
But Walters's attorney, Steven Tabackman, said Walters wasn't motivated by self-indulgence. He called his client a deeply insecure and troubled woman. Walters is overweight and has waged a long battle with alcohol, drug abuse and undisclosed problems associated with her childhood, Tabackman has said.
She was motivated to steal and dole out huge amounts of cash to friends and co-workers, in part to pay for private school tuition, clothes and even funerals, Tabackman said. The giving fulfilled a desire to be seen as a benefactor, the attorney said.
Known as "Mother Harriette," Walters distributed $1.2 million in checks and an undetermined amount of cash to her fellow employees from 2001 until 2007, the year of her arrest, federal prosecutors have said.
"Harriette Walters is a pretty complex lady," Tabackman said in an interview. "She gave the District exemplary service on the one hand and on the other engaged in conduct that even she will say should result in the kind of serious punishment she faces. . . . She has absolutely accepted responsibility."