Incompetent boobery

Last year I wrote about master criminal Harriet Walters who was able to embezzle from the Washington, DC government between $50 and $80 million beginning sometimes in the 1990s (here, here, here, and here). Well, today the Washington Post reports that the District government helped Ms. Walters.

Following Harriette Walters’ input, officials left her small unit out of the new software system, making it easier for her to escape detection as she allegedly produced fake checks that prosecutors say amounted to $50 million.

Directors in the scandal-plagued tax department now want to scrap the $135 million system rather than try to upgrade it to make it more secure. The chief financial officer’s technology manager says the system, installed between 2000 and 2004, is too outdated and clumsy to be worth fixing.

Before her arrest in November, Walters was a 26-year tax employee known among her colleagues as a problem solver with a knack for finding solutions by using the department’s antiquated and balky computers or finding a way around them. Although she did not have final say over the new Accenture Integrated Tax System, Walters contributed to the decision that her unit, which handled real estate tax refunds, be left out of it.

Here’s an example of transaction that she was able to circumvent security procedures to accomplish;

The charges in the Wright case include creating a false $40,000 refund in March 2007. Even though the check had been cashed, Wright used the Integrated Tax System to issue a replacement check on the grounds that the first check had been lost, according to the charges. Then she issued a second replacement check. Then she issued a third replacement check. At that time, the Integrated Tax System added $33.03 of interest to the check to compensate for the long delay in issuing the refund.

“Wright thus exploited a deficiency that allowed a check to be ‘reissued’ even without any action being taken to cancel the first check or confirm that the first check had not already been negotiated,” according to the charging papers.

The $40,000 checks fell below the threshold for requiring a supervisor’s approval, said David Umansky, spokesman for Gandhi. He said 77 personal refunds of at least $40,000 were issued last year.

Are any of you in a business that wouldn’t miss 50-80 million bucks? Although this is big news locally, it doesn’t seem to permeate the Beltway – I wonder why? Everyone knows about the Enron scandal, how is this less important? Every time I write about Harriet Walters, I start getting Google hits from the Virgin Islands.

Five accomplices have pleaded guilty thus far, including an IRS employee. The whole gang was finally caught, not by the FBI, not by local cops, not the Treasury Department, but by a bank teller at SunTrust who wouldn’t cash a $400,000 check.

Category: Politics