Wedding ring seized in D.C. tax office investigation

Federal prosecutors trying to recover tens of millions of dollars that were stolen in the D.C. tax fraud scheme have seized a pricey wedding ring set from a former District employee.

D.C. tax office manager Harriette Walters, the ringleader behind the $48 million embezzlement scheme, and co-worker Kim Fleet, together bought the wedding bling shortly before law enforcement investigators uncovered the decades-old scam, according to court documents.

Fleet had gotten married, and Walters was known to shower co-workers and co-conspirators with gifts and cash. In June 2007, Fleet visited Adore Jewelry in Annapolis and picked out an expensive diamond engagement ring and wedding band. Walters shelled out $10,000, and Fleet paid the balance of $19,000 with a credit card.

But most of that money belonged to D.C. taxpayers, prosecutors said in court documents filed last week.

Walters’ role in the largest financial corruption scandal in the District’s history has been well-documented, but Fleet’s money was tainted as well, authorities said. Walters had given her more than $167,000, including a $25,000 check that she deposited five days earlier.

Channing Phillips, a spokesman for the U.S. attorney, said prosecutors did not charge Fleet because there was insufficient evidence that she knew of the scam.

The jewelry store owner, Michael Jangali, had no comment on the case.

Prosecutors requested the seizure warrant for the ring in November, a month after Walters was debriefed by WilmerHale, the law firm investigating the tax office at the request of the D.C. Council.

For nearly 20 years, Walters created fake property tax refund checks that were cashed by co-conspirators and laundered through bank accounts from Maryland to the Bahamas to Puerto Rico.

Prosecutors have convicted 11 people in the case. Walters pleaded guilty in September. She has been jailed since her arrest a year ago and awaits sentencing.