Swindle mastermind gets 17 1/2-year prison term

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By Sarah Abruzzese

The mastermind of the biggest swindle in D.C. government history was sentenced Tuesday to 17 1/2 years in prison.

Harriette Walters, a former manager of the D.C. Real Property Tax Administration Adjustments Unit in the Office of Tax and Revenue, faced 15 to 18 years in prison under a plea agreement reached with federal prosecutors.

U.S. District Court Judge Emmet G. Sullivan said the punishment "sends a message to anyone who wants to commit this type of crime in the District of Columbia."

Judge Sullivan said the prosecution's suggestion that Walters receive a year in prison for every year she committed a crime was reasonable, but he also took into consideration her assistance to investigators trying to understand how she perpetrated her crimes.

He took six months off the recommended maximum 18-year sentence because Walters spent two days explaining the scheme to city investigators and accountants.

Walters, 52, used her position to issue 226 fraudulent property-tax refunds worth more than $48.1 million.

She was arrested in November 2007 and pleaded guilty nearly a year later to federal wire fraud, money laundering, conspiracy and tax evasion charges.

The scheme spanned 18 years and escalated from vouchers worth $4,000 to more than $500,000. She then funneled the money to family, friends and co-workers.

She is not eligible for early release, but the sentence could be shortened for time already served.

Walters also agreed to pay restitution and forfeiture of the amount she stole and pay about $16 million in federal and city taxes.

"I stand before your honor in full repentance of a crime I accepted full responsibility for," she said. "I made poor decisions. I had poor behavior."

Ten other people have pleaded guilty in the scheme. Walters was the only city employee sentenced in the crime. Another city employee was arrested but let go. More than 30 tax office employees were forced to resign.

Walters' defense attorney, Steven Tabackman, tried to portray her as a complex woman who executed her job well but committed crimes at night. Mr. Tabackman said that for all of Walters' sophistication, she was enormously insecure and used food, drugs and alcohol to cope.

In the roughly three-hour sentencing hearing Tuesday, Mr. Tabackman said her stealing was connected to "complex psychological needs" and asked Judge Sullivan to take into consideration during sentencing Walters' poor health and cooperation with investigators.

Prosecutors had repeatedly said Walters lavished people with gifts to perpetuate the scheme.

The catalogue of her spending including designer clothes, a Rolex watch, a home in the Virgin Islands, Washington Wizards season tickets, a 2005 Bentley and other luxury items outraged city residents. Her friend and personal shopper, Marilyn Yoon, 41, was among those sentenced in relation to the crime.

Prosecutors said Tuesday that they have recovered only about $10 million in property, which might fetch more at an upcoming auction.