Federal authorities have charged a D.C. tax official and her boyfriend with running a phony refund scheme at the same time a different group was ripping off the city, The Examiner has learned.
Jacqueline Wright and Michael Clark stole nearly $185,000 in a series of phony income tax returns, documents filed in federal court show. The two have waived their rights to appear before the grand jury and are engaged in plea negotiations, a source said Tuesday.
According to Tuesday’s documents, Wright “exploited” weaknesses in the finance office’s $120 million automated tax system to gin up bogus tax returns for Clark.
Tuesday’s charges are another black eye for city Finance Officer Natwar Gandhi, who is still trying to explain how two of Wright’s fellow bureaucrats pilfered almost $50 million in a separate scheme.
According to charging documents, Wright used her city identification number to log the phony tax returns. She also used Clark’s real Social Security number to file the claims.
Earlier this year, a blistering unpublished audit of the tax system accused finance officials of overpaying for a shoddy computer network that failed nearly half the time and left the city’s coffers wide open for corruption.
According to charging documents, Wright continued filing bogus claims even after federal authorities swooped in on Harriette Walters and Diane Gustus and charged them with the largest public corruption scandal in city history. As late as March 2008 — four months after Walters and Gustus were arrested — Wright was filing fake tax returns, authorities allege.
Finance office spokesman David Umanski defended his agency, saying that Wright was caught after finance officials implemented new checks and balances.
“When the refunds involved in this case were reviewed in March 2008 they raised serious questions,” Umanski said in a statement. “The matter was immediately reported to the chief financial officer’s Office of Integrity and Oversight, which contacted the inspector general and the U.S. attorney.”
The roots of the alleged Wright-Clark plot extend to 2006, when the two met at an area nightclub. They both began complaining about their jobs and decided to get even, authorities allege in charging documents.
Wright remains on the city payroll. She has been put on administrative leave and finance officials have moved to have her fired.
