Accused spy Jerry Alfred Whitworth, charged with receiving hundreds of thousands of dollars for his role in the alleged Walker spy ring, and his wife, Brenda Reis, are the subjects of a federal grand jury probe into whether they reported all of their income on their tax returns, according to sources close to the investigation.
The sources also provided new details about the methods allegedly used by Whitworth, a retired Navy communications specialist, and his Navy buddy, accused spy John Anthony Walker Jr.
The sources said the investigation includes records indicating that John Walker made trips to his Virginia safe deposit box shortly before he allegedly met with Whitworth in California, or in overseas locations such as Hong Kong and the Philippines when Whitworth was serving aboard ships.
Investigators seized from Whitworth's house a letter they believe he wrote to his wife after one of his alleged meetings with Walker. The letter instructed Reis to buy precious metals but to use only cash or a cashier's check, rather than a personal check, to make the purchase, a government source said. The source said it is not known whether the purchase was made.
Sources said the San Francisco grand jury is investigating whether to bring criminal tax evasion or tax conspiracy charges. The investigation is expected to be completed within two weeks.
Clyde Blackmon, Reis' lawyer, said after Whitworth's arrest in June that he did not believe his client was under criminal investigation. But he said in an interview yesterday that while Reis has not been informed that she is a subject of grand jury proceedings, "I think it's safe to say that the government is looking into the possibility of tax charges against her."
He said Reis and Whitworth, who have been married since 1976, filed joint tax returns. The investigation of Reis involves whether Reis knew or should have known that the couple's spending habits and assets indicated more income than was reported on their tax returns, according to a government source.
Reis, a doctoral candidate in nutrition at the University of California at Davis, declined comment.
A San Francisco federal grand jury last month charged Whitworth with one count of conspiring to commit espionage with John Walker and unknown "others." The indictment charged that Walker gave Whitworth $328,000 in return for his role in the alleged espionage conspiracy, which it said lasted from "at least 1976" through April or May 1984.
The indictment charges that Whitworth "would use his access to classified national defense information" to accumulate secret documents and material, including special coding devices called "cryptographic keylists," that he would deliver to Walker. The indictment did not detail any specific documents or other information that Whitworth allgedly gave Walker, but set out a series of 21 meetings between Walker and Whitworth in California, Hong Kong, the Philippines and elsewhere, often just days before Walker allegedly met with his Soviet contact.
The grand jury proceeding currently underway is expected to result in a "superseding indictment" that will restate the espionage charge against Whitworth and possibly add details about his alleged spy activities as well as tax charges, the sources said.
Among those who have been called to testify before the grand jury are Pamela K. Carroll, a Norfolk police officer who dated John Walker before his arrest, and Laurie Robinson, Walker's former partner in his Virgnia Beach detective agency. Robinson said she did not testify before the grand jury, however, because federal prosecutors refused to grant her immunity unless she agreed to give them more information.
Robinson said yesterday that she told prosecutors she had no more to tell them, but "they felt there was more to it than I was giving them."
Robinson said in an interview last week that she has been told she is a suspect in the Walker investigation. She denied any wrongdoing.
A source close to the investigation said that prosecutors were seeking the tax charges because they were concerned about the strength of their espionage case against Whitworth. In addition, if the grand jury brought tax charges, it would give the government additional leverage to persuade Whitworth and Reis to cooperate with prosecutors.
Assistant U.S. Attorney William (Buck) Farmer yesterday refused comment on the matter.
Whitworth's lawyer, James Larson, said the government is simply attempting to get "more bites at the apple" by seeking the tax charges.
In a separate probe in Norfolk, Internal Revenue Service criminal investigators in Norfolk are tracing the finances of John Walker and his brother, Arthur James Walker, who has also been charged with espionage.
The investigators are examining records of more than 20 trips that John Walker made to Europe and the Far East, often with a female companion, to determine whether they involved money that Walker may have accumulated through the alleged espionage.
The investigators are also trying to trace any money that may have been received by Arthur Walker.
It is not yet clear whether a grand jury will be convened to consider tax charges against John and Arthur Walker, a government source said. The source noted that civil tax liens totaling $252,000 had already been filed against John Walker.
Also yesterday, federal judges in Baltimore and Norfolk refused to permit a conservative public interest law firm to enter the cases against John and Arthur Walker as a friend of the court.
The firm, the Washington Legal Foundation, had argued in briefs that the death penalty could be imposed against the men, although government prosecutors have said they believe that provisions authorizing capital punishment for espionage have been invalidated by the Supreme Court.
In London, former Royal Navy Undersecretary Patrick Duffy said the alleged espionage activities "suggest disturbing implications for the Royal Navy."
In a letter to Prime Minister Margaret Thatcher released yesterday, Duffy, a Labor member of Parliament, called the Walker case "a profoundly disturbing situation that has exposed the Royal Navy -- through no fault of its own -- to horrendous penalties."