Banker Admits to Role in Tax Office Scam

Man Got $366,000 To Launder Checks

Prosecutors say Harriette Walters had the bank manager convert D.C. checks into cashier's checks.
Prosecutors say Harriette Walters had the bank manager convert D.C. checks into cashier's checks. (D.c. Government)
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By Paul Duggan
Washington Post Staff Writer
Thursday, May 22, 2008; Page B01

A former Bank of America manager pleaded guilty yesterday to participating in a massive embezzlement at the D.C. tax office, admitting that he deposited nearly $18 million in fraudulent checks and helped distribute the stolen money to others in the scam.

In pleading guilty to money laundering, Walter Jones, 33, of Essex, Md., acknowledged in U.S. District Court in Greenbelt that from 2000 to 2006, he deposited 61 checks totaling $17,941,817 from the D.C. Office of Tax and Revenue. Authorities said Jones received more than $366,000 for his role in the scheme.

Authorities say up to $50 million in property tax money was stolen in the form of fraudulent refund checks in a scam allegedly orchestrated by former tax office manager Harriette Walters, 51, who is in jail awaiting trial. She has pleaded not guilty.

The theft was the biggest municipal fraud in memory in the Washington area. Only a small fraction of the money has been recovered.

Referring to Jones's guilty plea, the U.S. attorneys for Maryland and the District said in a joint statement that the case "dramatically illustrates the importance of banks as gatekeepers of our financial system. . . . Corrupt bank officials facilitate criminal activity and undermine the integrity of our banking system.

"Our investigation will continue until everyone involved in devising, implementing and assisting this appalling criminal scheme is held accountable," said the statement from the two top prosecutors, Rod J. Rosenstein of Maryland and Jeffrey A. Taylor of the District.

Jones's attorney, Timothy Jones, did not return a phone call seeking a comment on the guilty plea.

A Bank of America spokeswoman, Shirley Norton, declined to comment on the case except to say that the bank is cooperating with law enforcement officials.

The 61 checks ranged from $71,777 to $490,000, the U.S. attorney's office in Maryland said. Prosecutors said Jones arranged for the checks to be converted into cashier's checks and distributed to others involved in the scheme.

"For example," the office said in a statement, "in October 2006, Jones prepared 15 cashier's checks payable to other co-conspirators or businesses at the direction of a co-conspirator who had deposited a $460,000 District of Columbia government check at the bank."

The crime to which he pleaded guilty is punishable by up to 20 years in prison, but federal sentencing guidelines probably will recommend a considerably shorter term. Judge Alexander Williams Jr. scheduled sentencing for Sept. 11.

Both sides agreed to a statement of facts filed in court that said Jones met Harriette Walters in 1994 or 1995 when she was a bank customer.

The two "developed a friendship, and Harriette Walters asked for Jones' assistance with many of her banking transactions," the statement said. "As their friendship progressed, Harriette Walters offered Jones $100 for his assistance with her banking transactions. After initially declining Harriette Walters' offers of monetary gifts, Jones accepted the gifts."

Referring to the 61 checks, the statement said, "At the time the checks were deposited by Jones, he was aware of a high probability that [the] funds were proceeds of fraud, but he deliberately avoided learning the truth."

After Jones was fired by Bank of America in February, two other defendants in the scheme, Jayrece Turnbull and Connie Alexander, each gave him $20,000, the statement said.

Jones is the third person to admit involvement in the scheme.

Walters's nephew, Ricardo Walters, 33, pleaded guilty May 2 to money laundering and receiving stolen property. On Monday, Marilyn Yoon, 40, a Derwood resident and former Louis Vuitton store employee in Tysons Corner, pleaded guilty to possession of property obtained by fraud.

In addition to Harriette Walters, seven people are awaiting trial in the case.

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