Ex-Banker Gets 61/2 Years For His Part in D.C. Tax Scam
Tuesday, January 6, 2009; Page B04
A former bank manager who deposited almost $18 million in fraudulent D.C. property tax checks was sentenced yesterday in federal court to 6 1/2 years in prison for his role in a scandal that cost the District almost $50 million.
Walter R. Jones Jr., 34, became a vital cog in the scheme, ignoring signs that the refund checks were not legitimate and receiving hundreds of thousands of dollars for his complicity in the fraud, according to prosecutors.
A teller and later an assistant branch manager at Bank of America in Maryland, Jones was befriended by the scheme's mastermind, Harriette Walters, beginning in 1994. Walters, then a manager in the D.C. Office of Tax and Revenue, plied Jones with gifts and persuaded him to join in the conspiracy.
From 2000 to 2006, Jones deposited 61 checks, totaling $17,941,817, and he helped convert the money into cashier's checks to be distributed to other participants in the scheme.
The fraud was uncovered in 2007, and investigators concluded that it went back almost two decades, built by Walters into the biggest known embezzlement of local government funds in the District's history.
Eleven people, including Walters, have pleaded guilty. No additional prosecutions appear likely. But the effort to recover the proceeds of the fraud continues, and the District has sued Bank of America for $105 million, alleging that the bank failed to properly train and supervise its employees.
Jones's take totaled $366,000, according to his attorney, Timothy J. Sullivan. In a scandal marked by Neiman Marcus shopping sprees and Caribbean vacation homes, Jones profited only modestly. But as Sullivan acknowledged in court, without Jones, Walters would have had to look elsewhere for a suitably situated accomplice.
In May, Jones pleaded guilty to one count of conspiracy to commit money laundering, and yesterday he went before U.S. District Judge Alexander Williams Jr. in Greenbelt to learn his punishment. Jones was the sixth defendant sentenced in the case and the sixth sentenced by Williams, who is handling the defendants charged in Maryland.
Under federal sentencing guidelines, Jones faced a recommended range of about 5 1/2 to 7 years. Sullivan urged Williams to impose a sentence at the low end of the range, portraying Jones as a young man who was lured into a web of deceit by Walters.
"Unfortunately, one day Harriette Walters walked into that bank," and over time, she "bought" Jones, Sullivan told the judge.
After his arrest, Jones cooperated with investigators, and at the urging of the U.S. attorney's office, the judge factored that cooperation into the calculation of the sentencing range. The U.S. attorney's office sought a sentence in that range but on the high end, saying that Jones played a critical role in enabling the fraud to flourish for years.
Given the chance to speak, Jones apologized to the taxpayers of the District and to his family and friends. Then he heard from the judge, who shared the view that however small Jones's take, his role was anything but.
"There's no doubt in my mind that you were a big player and but for your involvement, the scheme would not have continued for so long," Williams said.
After Jones was fired from his bank job and Walters was forced to go to other banks, the scheme unraveled. In 2007, a SunTrust bank employee, suspicious of one of the fraudulent checks, refused to cash it. The bank contacted authorities, and that led to the investigation into the D.C. tax office.
Jones, who lives in the Baltimore County community of Essex, will report to prison next month to begin serving his sentence. Walters is awaiting sentencing in federal court in the District, where she was charged.