Ninth Defendant in D.C. Property Tax Refund Fraud Scheme Pleads Guilty
– Real Estate Agent and Graphics Designer Participated in Theft and Laundering of Over $600,000 from Fraudulently Obtained Property Tax Refund Checks; Used Graphics Design Skills to Assist with Cover-up of Fraud Scheme; Conspired with OTR Employees to Commit Mortgage Fraud –

Washington, D.C. – Alethia Olivia Grooms, 52, of Clinton, Maryland, pleaded guilty today before the Honorable Emmet G. Sullivan in the U.S. District Court for the District of Columbia to Possession of Stolen Property, Conspiracy to Commit Money Laundering, and Conspiracy to Make False Statement in Connection with FHA Loan, U.S. Attorney for the District of Columbia Jeffrey A. Taylor, U.S. Attorney for the District of Maryland Rod J. Rosenstein, Joseph Persichini, Jr., Assistant Director in Charge of the FBI’s Washington Field Office, Charles J. Willoughby, Inspector General for the District of Columbia, Special Agent in Charge C. André Martin, Internal Revenue Service, Criminal Investigation, and District of Columbia Chief Financial Officer Natwar M. Gandhi jointly announced. Grooms is the ninth defendant in the long-running District of Columbia Office of Tax & Revenue property tax refund fraud scheme to enter a guilty plea.

The maximum sentence for Possession of Stolen Property is ten years of incarceration, three years of supervised release, and a fine of $250,000 or twice the gain or loss. The maximum sentence for Conspiracy to Commit Money Laundering is 20 years of incarceration, three years of supervised release, and a fine of $500,000 or twice the gain or loss. The maximum sentence for Conspiracy to Make False Statement in Connection with FHA Loan is five years of incarceration, three years of supervised release, and a fine of $250,000 or twice the gain or loss. Under the non-binding U.S. Sentencing Guidelines, Grooms faces a likely prison sentence of between 37 to 46 months and a fine of between $7,500 and $75,000. As part of her plea deal, Grooms agreed to provide $650,929.19 in restitution to the District of Columbia. A status hearing date has been scheduled for October 31, 2008.

According to the factual proffer presented by the government in court earlier today, Grooms participated in the theft and laundering of over $600,000 from the District of Columbia government through the D.C. property tax refund fraud scheme allegedly orchestrated by Harriette Walters, a former manager in the D.C. Office of Tax & Revenue. Walters has been charged with using her position at OTR to create false property tax refund vouchers that produced millions of dollars of fraudulent refund checks. From June 1989 through August 2007, Grooms and two of her friends received 17 fraudulent D.C. property tax refund checks, totaling over $460,000. Grooms also laundered an additional $145,000 in stolen D.C. funds through one of her bank accounts.

Grooms used her graphics design skills to help cover up the D.C. property tax refund fraud scheme. In June 2007, officials at SunTrust Bank became suspicious when a co-conspirator tried to deposit a $410,000 fraudulent D.C. check at that bank. The co-conspirator asserted that the money came from the co-conspirator’s participation in a tax sale auction at OTR. Grooms attempted to help the co-conspirator provide documentation by scanning a D.C. Real Property Tax Sale form with writing on it onto her computer.

In 2006, Grooms also conspired with two OTR employees to commit mortgage fraud. Grooms was their real estate agent and assisted them with obtaining Federal Housing Administration loans. In their loan applications, these individuals falsely claimed to have second jobs and inflated their bank accounts by $20,000. Using her graphics design skills, Grooms created bogus pay stubs and W-2 forms and forged bank statements.

In addition to her share of the proceeds of the fraudulent D.C. property tax refund checks, Grooms received cash, checks, and other items of value from Walters. In particular, Grooms received personal checks from Walters in the total amount of $42,300.

“As we have learned, it took a number of different individuals, conspiring together, to pull off this extraordinarily lengthy, complex, and thieving fraud scheme,” said U.S. Attorney Taylor. “We will continue to follow all leads in this investigation, and we will not stop until all those responsible are held fully accountable.”

“Today’s guilty plea is proof of the FBI’s continued diligence and dedication in its efforts to identify all participants in this egregious fraud scheme that took funds from the good citizens of the District of Columbia,” stated FBI Assistant Director in Charge Persichini.

In addition to Grooms’s guilty plea, the investigation has thus far resulted in guilty pleas from eight of Walters’s other co-conspirators: Walters’s brother (Richard Walters, 49); Walters’s nephew (Ricardo Walters, 33); Walters’s close friend (Connie Alexander, 52); Walters’s former banker at Bank of America (Walter Jones, 33); Walters’s close friend (Samuel Pope, 61); Walters’s personal shopper (Marilyn Yoon, 40); Walters’s friend and mentor (Patricia Steven, 73); and the husband of Walters’s friend and mentor (Robert Steven, 55). Ricardo Walters was sentenced last month to a term of 78 months in prison.

In announcing today’s guilty plea, U.S. Attorneys Taylor and Rosenstein, Assistant Director in Charge Persichini, D.C. Inspector General Willoughby, IRS Special Agent in Charge Martin, and D.C. Chief Financial Officer Gandhi commended the outstanding and dedicated team that has investigated this case and the entire OTR tax fraud scheme, including: FBI Special Agents Andrew Sekela, Julie Shields, Debra LaPrevotte, and Matthew Walsh, and Intelligence Analyst Jessica Pipher, Paralegal Specialist Lucy Sampson, and Contract Forfeiture Investigator Jerry Simpson; IRS CID Special Agent Nicole Davis and TIGTA Special Agent Edward Bosak; Director of Internal Security Charles Fultz and Senior Investigator Donna Tolliver, of the OCFO Office of Integrity and Oversight; Special Agent Kevin Craddock and Tax Auditor James LeSane, of OTR; D.C. OIG Special Agent Kerthalia Peavely; and HUD OIG Assistant Special Agent in Charge Kathleen Hatcher and Forensic Auditor Robert Fisher.

U.S. Attorney Taylor commended Paralegal Specialist Diane Hayes; Criminal Investigator Diane Eickman; Legal Assistants April Peeler, Lisa Robinson, and Michael Thompson; former summer legal intern George Ingham; former Assistant U.S. Attorney Geoffrey L.J. Carter; and Chief Steven Durham, Deputy Chief Howard Sklamberg, and the attorneys and entire staff of the Fraud & Public Corruption Section of the U.S. Attorney’s Office for the District of Columbia. U.S. Attorney Taylor also commended Information Technology Specialist Oliver John-Baptiste, Litigation Support Specialist Joseph Calvarese, and the entire staff of the Litigation Services Unit of the U.S. Attorney’s Office for the District of Columbia.