Tax scandal may date to '90

WASHINGTON (Map, News) - The District of Columbia’s tax scandal, already thought to be the largest public corruption case in city history, may stretch back as far as 1990 or even earlier, federal law enforcement officials said Tuesday.

Prosecutors on Tuesday charged real estate agent Alethia O. Grooms, of Clinton, Md., as an accessory to the scheme and said in charging documents that they have evidence that the scam reached back to 1990. Before Tuesday, authorities had officially dated the scandal to 2001.

The Examiner reported last month that federal investigators believed the origins of the scam would be traced well back into the 1990s. At that time, investigators were poring through written records in city warehouses to determine when, and how, tax office employees began siphoning tens of millions of dollars through a series of dummy companies and phony property tax refunds.

To date, only two ex-tax office employees — alleged mastermind Harriette Walters and Diane Gustus — have been charged in the conspiracy. The other six co-defendants, including Grooms, worked outside of D.C. government, according to court papers.

Grooms, 52, is charged with 10 counts, from fraud to money laundering. Authorities charged in court papers that she helped Walters hide the stolen money through a series of bank and real estate transactions.

Sources familiar with the investigation said they expected more arrests, and some inside the U.S. Attorney’s Office are speculating that Walters may have had a tutor.

Grooms stood mostly silent in court Tuesday but leaned forward often and asked U.S. Magistrate Judge John M. Facciola to repeat himself, explaining that she had left her hearing aide behind.

Facciola prohibited her from having contact with a list of defendants and potential witnesses, most of whose name remained sealed.

Walters also recommended Grooms’ services as a real estate agent, an unnamed witness has told authorities. Grooms works for Visions Realty Signature Properties, at 7851 Belle Point Drive in Greenbelt. Calls to the business were unanswered Tuesday.

The rudimentary scheme, which used legitimate names and phony companies to shuffle fat checks through the property tax office, has already embarrassed Chief Finance Officer Natwar Gandhi, but the widening scope of the investigation now raises disturbing questions for ex-city leaders long out of government.

Prosecutors said in court documents that they have evidence that the scam began in 1990, when Grooms accepted a $4,600 property tax refund check made out to her.

That puts the scandal under then-Mayor Marion Barry, who was in that year fending off federal allegations that he bought crack cocaine in a hotel.

Got a tip on the tax scandal? Call Bill Myers at 202-459-4956 or e-mail bmyers@dcexaminer.com.

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