Friday, December 12, 2008
Former IRS Employee involved on Tax Refund Scheme.
FORMER IRS EMPLOYEE AND WIFE SENTENCED IN D.C. PROPERTY TAX REFUND FRAUD SCHEME
Fraudulently Obtained Nearly $9 Million in D.C. Government Checks;
Used Funds to Purchase at Least Four Jaguars, a Townhouse and Vacations to the Bahamas.
Greenbelt, Maryland—U.S. District Judge Alexander Williams, Jr. sentenced former IRS employee Robert O. Steven, age 55, of Edgewater, Maryland, today to 46 months in prison followed by three years of supervised release, and his wife Patricia A. Steven, age 73, of Harwood, Maryland, to 70 months in prison followed by three years of supervised release, for receipt of stolen property and conspiracy to commit money laundering in connection with a property tax refund scheme in which over $48 million were stolen from the District of Columbia Office of Tax and Revenue, announced United States Attorney for the District of Maryland Rod J. Rosenstein and U.S. Attorney for the District of Columbia Jeffrey A. Taylor.
Judge Williams also ordered that Robert Steven and Patricia Steven each pay $8,833,310.32, and, in order to satisfy such money judgment, to forfeit three Jaguar cars, two residences, jewelry and monies held in four bank accounts.
U.S. Attorney Rod J. Rosenstein stated, “This case is particularly egregious because Robert Steven was an IRS employee when he joined in this conspiracy to steal millions of dollars from D.C. taxpayers and spend the money on luxury items, and his wife Patricia Steven spent over 16 years laundering almost $9 million into a bank account she controlled with her husband. We seek the forfeiture of all criminal proceeds and property purchased with stolen money because victims deserve restitution and criminals must not be permitted to profit from their crimes.”
“Money laundering is not a victimless crime. The underground, untaxed economy harms the entire nation’s economic strength. IRS-Criminal Investigation is united with the rest of the law enforcement community in our resolve to financially disrupt criminal organizations that commit crimes against our society and economy,” said C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge.
According to court documents, Robert Steven was employed with the IRS since 1975. At the time of his arrest, Steven’s position was Division Director, Modernization Information Technology Systems, and his office was located at the IRS National Office in New Carrollton, Maryland.
According to the plea agreements, Patricia Steven first met Harriette Walters, a former manager within the District of Columbia Office of Tax and Revenue, in the mid-1970s. By the late 1980's, Harriette Walters proposed that Patricia Steven deposit a check drawn on a District of Columbia government bank account and made payable to Patricia Steven. Walters explained that Steven would be allowed to keep a portion of the proceeds from the check, but would have to return a substantial portion to Walters. Despite knowing that Walters obtained the check fraudulently, Patricia Steven agreed and deposited the first check.
Robert and Patricia Steven opened a business that eventually developed into a clothing design business called “Bellarmine Design.” Bellarmine Design never grossed more than $15,000 in a single year. From 1990 to 2007, Patricia Steven and Harriette Walters made 67 deposits of fraudulently obtained District of Columbia government checks or cash proceeds from the scheme into a Bellarmine Design checking account maintained by Steven and Patricia Steven. The individual checks ranged in amounts from a handful of initial deposits over $4,000 each, to subsequent deposits of up to $490,000. Patricia Steven also transferred at least $344,700 to Harriette Walters.
Patricia and Robert Steven transferred at least $1,709,500 of these funds into another bank account used primarily by Robert Steven. Using these funds, Robert and Patricia Steven purchased at least four Jaguar cars, a townhouse located in Edgewater, Maryland and multiple vacations to the Bahamas.
Harriette M. Walters, age 52, of Washington, D.C., pleaded guilty in the U.S. District Court for the District of Columbia and faces a maximum sentence of 20 years in prison for wire fraud and money laundering conspiracy; 10 years for District of Columbia tax evasion; five years for federal tax evasion; and an order to pay restitution in the amount of $48,115,419.09. U.S. District Judge for the District of Columbia Emmet G. Sullivan has scheduled her sentencing for March 25, 2009 at 11:00 a.m. Alethia O. Grooms, age 52, of Clinton, Maryland and Samuel Earl Pope, age 61, of Washington, D.C. also pleaded guilty to their participation in the scheme. Judge Sullivan scheduled their sentencing for February 24 and 26, 2009.
Jayrece Turnbull, age 34, of Bowie, Maryland, who is Harriette Walters’ niece, pleaded guilty in the U.S. District Court for the District of Maryland in Baltimore to her participation in this tax refund scheme in which she deposited over $24 million in fraudulently obtained government checks into accounts she controlled. She faces a maximum sentence of 10 years in prison for receipt of stolen property; 20 years in prison and a fine of $500,000 or twice the value of the transactions involved, whichever is greater, for conspiracy to commit money laundering; 30 years for mail fraud; and five years and a fine of $250,000 or twice the gain or loss, whichever is greater, for tax evasion. Judge Williams has scheduled her sentencing for February 4, 2009 at 9:30 a.m.
Judge Williams sentenced Ricardo R. Walters, age 33, of Ft. Washington, Maryland, on July 23, 2008 to 78 months in prison for receipt of stolen property and conspiracy to commit money laundering. Judge Williams sentenced Richard Walters, age 49, of Bowie, Maryland, who is Harriette Walters’ brother, on November 4, 2008 to 51 months in prison for receipt of stolen property and conspiracy to commit money laundering in connection with this scheme.
Marilyn Yoon, age 40, of Derwood, Maryland; Walter Jones, age 33, of Essex, Maryland; and Connie Alexander, age 53, of Bowie, Maryland have also pleaded guilty to their participation in the scheme. Yoon, the next defendant to be sentenced, faces a maximum sentence of 10 years in prison and a $250,000 fine for possession of property obtained by fraud at her sentencing scheduled for December 11, 2008 at 1:30 p.m. Walter Jones faces a maximum sentence of 20 years in prison and a fine of $500,000 or twice the value of the transactions involved, whichever is greater, for conspiracy to commit money laundering at his sentencing on January 5, 2009. Alexander faces a maximum sentence of 10 years in prison for receipt of stolen property and 20 years in prison for conspiracy to commit money laundering at her sentencing scheduled by Judge Williams for February 12, 2009.
United States Attorneys Rod J. Rosenstein and Jeffrey A. Taylor thanked the Federal Bureau of Investigation; the Internal Revenue Service - Criminal Investigation; the Inspector General’s Office for the District of Columbia; the District of Columbia Office of Tax and Revenue, Criminal Investigation Division; the Treasury Inspector General for Tax Administration; and the District of Columbia Office of the Chief Financial Officer, Office of Integrity and Oversight for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Jonathan Su and Deborah Johnston from the District of Maryland and Assistant United States Attorneys Timothy Lynch and David Johnson from the District of Columbia, who are prosecuting the case.