A Baltimore bank that discovered “irregularities” five months before federal authorities were tipped about a multimillion-dollar public corruption scandal in the D.C. tax office may face tough questions about why it didn’t alert prosecutors.

Bank of America fired then-asssistant manager Walter Jones in February, after noticing that Jones deposited more money into two bank accounts than he earned annually. In a written statement dated Feb. 2, 2007, Jones admitted that he deposited and transferred tens of thousands of dollars of checks for alleged co-conspirator Jayrece Turnbull and accepted $145,000 from Turnbull.

The bank treated the matter as an in-house ethics problem, fired Jones and didn’t alert law enforcement, a bank source said.

Jones, Turnbull and five others — including two former D.C. tax office employees — are now charged with siphoning off tens of millions of dollars from the public in D.C.’s largest corruption scandal. The investigation began in late June after SunTrust bank officials raised questions about the checks Turnbull was allegedly trying to move.

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The question many are asking is why didn’t Bank of America pick up the phone five months earlier?

“It is not only something prosecutors encourage [financial institutions] to do. They are required to under civil law,” said Joseph diGenova, the former U.S. Attorney for D.C. who supervised numerous public corruption trials. “To fail to do so can get you in a lot of trouble.”

Bank of America spokeswoman Nicole Nastacie said she could not go into details of the Jones cases because the matter remained under investigation.

A federal law enforcement source told The Examiner that authorities are miffed that they didn’t hear from Bank of America earlier, but it’s unclear what steps they’ll take. For now, investigators are focusing on tracking down the lost money, the source said.

After the collapse of energy giant Enron, Congress passed a raft of new laws making “gatekeepers” — bankers, accountants, auditors and lawyers — civilly, and sometimes criminally, responsible for corporate fraud.

“Banks are under obligation to monitor for and identify suspicious activity,” said Carol Van Cleef, an anti-money-laundering expert and partner at Bryan Cave law firm. “In hindsight, this case raised classic red flags.”

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

smccabe@dcexaminer.com