D.C.’s largest-ever corruption scandal widened Thursday when prosecutors worked out a plea agreement charging two tax office bureaucrats with mortgage fraud.
In a “criminal information” filed Thursday, prosecutors said Temika Gustus and Sheila Jones lied on federal housing applications in order to get favorable loans from the Department of Housing and Urban Development.
Also included in Thursday’s information was Alethia Grooms, a friend of alleged tax scam mastermind Harriette Walters, who is accused of helping Gustus and Jones put together the bogus applications.
Gustus is the daughter of Diane Gustus, another tax office employee who is charged with conspiring to steal upward of $50 million in public money through a series of dummy companies.
Thursday’s court papers do not connect Temika Gustus, 27, and Jones, 46, directly to the tax scandal, but documents said that Grooms used money from the scam to help finance houses for Temika Gustus and Jones.
Defendants can only be charged “by information” when they waive their right to a grand jury. Such charges are usually an indication of a plea deal. Plea hearings have not been scheduled, prosecutors said.
Grooms, 52, will be the ninth of 13 co-defendants to plead guilty in the scam since it was publicly revealed in November. She is a longtime friend of Walters and, according to sources familiar with the investigation, is suspected of joining the conspiracy in its earliest days.
Grooms has told federal authorities of wild spending sprees and jaunts to casinos in Las Vegas and Atlantic City. In one such trip, the defendants blew through tens of thousands of dollars in Atlantic City and had no money left for gas to get home. They drove back to D.C. on fumes, according to sources familiar with the investigation.
Walters and Grooms met in the 1980s as students at the University of the District of Columbia and began frequenting “Vegas nights” at local firehouses.
According to authorities, around 1989, Walters told Grooms that she was able to obtain fraudulent D.C. property tax refund checks
and asked whether Grooms knew anyone who could cash them. Grooms agreed to participate and provided Walters with the names of two other friends, authorities said.
Over nearly two decades, Grooms helped launder hundreds of thousands of dollars in fraudulent checks, documents said. When the scheme began unraveling last year, authorities said, Walters called Grooms in tears, and they agreed for Grooms to use her graphic design business to create bogus documents.
