All Muck Is Local: D.C. Data Disposal

February 10, 2008 10:10 a.m.

It was still dark last Wednesday morning when the cleaning crews pulled into the alley behind a Washington, D.C., mall, but not so dark that they didn’t notice some unusual items left for them to pick up with the rest of the trash. The two 3-foot-high servers were clearly labeled “PROPERTY OF D.C. OFFICE OF TAX AND REVENUE.”

Now, who puts a server out on the street? More to the point, who would dump servers belonging to an agency that’s in the midst of a federal investigation of what’s described as the biggest corruption scandal in the city’s history? (See our artful rendering of what it might have looked like above.)

The garbage collectors notified Melvin Barnes, the building maintenance man.

“At first, I was thinking, ‘Man, who’s putting this stuff here?’” said Barnes. “But when I saw the labels of the tax office, with all this stuff going on, I was like, ‘Uh oh.’”

“All this stuff”—the alleged embezzlement of at least $20 million in a money-laundering scheme and its investigation— has been front-page news in Washington for months. Two employees of the city tax office are among the ten people who’ve been arrested in connection with the scandal.

The former supervisor of the tax office, Harriette Walters, has been charged with approving hundreds of fraudulent property tax refund checks made out to to phony companies and handing them over to a group of her relatives and friends. She allegedly instructed her co-conspirators to cash the checks at a Baltimore branch of Bank of America, where Walter Jones, the former assistant bank manager of the branch, would accept them. In one month alone, three bogus checks totaling $1.1 million were cashed through Bank of America. Jones was arrested last December.Walters’s niece, Jayrece Turnbull, who’s charged as one of the principal conspirators in the case, maintained several accounts at Bank of America in the name of companies that were either non-existent or didn’t own property in D.C. Federal prosecutors say Turnbull used these as fronts to launder the money generated by the illegal checks.

The Washington Post analyzed records and found $44.3 million in 160 suspicious property tax refund checks issued by the city since 1999. For at least 10 years, the scam proceeded unimpeded.

On Wednesday morning, Barnes consulted with the Tivoli Square property manager, Mary Ellen Bayer. They called the office of Chief Financial Officer Natwar M. Gandhi, whose agency oversees the tax office, as well as the Police Department.

“When I remembered the scandal that happened in that office, I thought giving it back to the tax office wasn’t necessarily the right thing to do,” said Bayer on Thursday. “There was no way this was the standard procedure to get rid of D.C. government computers. It appeared someone was trying to get rid of information.”

Police officers picked up the servers and delivered them to the city technological office.

But after inquiries from The Washington Post, the police retrieved the computers from the city. By late Thursday they were in F.B.I. custody. The agency will examine them for data that may be used as evidence of corruption in the D.C. Office of Tax and Revenue.

According to Barnes, he received calls on Thursday from the tax office and the office of the Chief Financial Officer. Both were looking for the servers and asking that they be returned.

“I told them,” said Barnes, “‘You’ll have to call the police. They have them now.’”

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