The woman charged with being the mastermind of the largest corruption scandal in the history of the District of Columbia had a plan to escape to the Caribbean and confessed her role in the scam when caught, prosecutors said in court Tuesday.

Citing the “sheer magnitude” of the allegations against former D.C. Office of Tax and Revenue manager Harriette Walters, U.S. Magistrate Judge Alan Kay ordered her held indefinitely. Federal prosecutors had argued that the $20 million identified in the probe may be only a fraction of the amount she stole.

Walters and her ex-colleague, Diane Gustus, stand accused of pilfering tens of millions of dollars from the public in an elaborate fraud conspiracy that cooked up six-figure payments to dummy companies and financed lavish lifestyles that included homes in the Caribbean, multimillion-dollar Nieman Marcus shopping sprees and garages full of high-priced cars from Corvette and Bentley.

Walters, wearing an oversized denim jacket and with her blond-dyed dreadlocks tied away from her face, spoke softly but clearly in Tuesday’s hearing, answering questions in short, declarative sentences. Authorities acknowledged in court filings that it is unusual for a white-collar criminal defendant to be held without bond, but U.S. Attorney Timothy Lynch said that Walters was “a highly sophisticated offender.”

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In Tuesday’s hearing, Lynch described how Walters doctored records, corrupted bank tellers and fellow employees and otherwise ran “a terribly successful conspiracy.”

He also offered new details on the allegations, including charges that Walters and her cronies shipped high-priced cars, including a Corvette, to the West Indies. Lynch said a pass book from a Puerto Rican bank found in her home suggested that Walters had a “Plan B” to flee to her native Caribbean.

Walters’ attorney, Peter Zeidenberg, denied that his client was a flight risk.

And he said there was “no evidence” of a plan to escape to the Caribbean.

Walters has confessed but hasn’t helped investigators track down the stolen funds, Lynch said.

In the last three years before their arrests, the conspirators were averaging $7 million per year in illegal payments, Lynch said.

“It’s an improbable burn rate, even for her tastes in clothing,” he said.

Got a tip on the finance office? Call Bill Myers at 202-459-4956 or send him an e-mail, bmyers@dcexaminer.com.

dc examiNation and poll: How high do you think the number will go in the total looted from the D.C. Tax office?