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Thursday, October 20, 2011

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Former District of Columbia Government Tax Examiner
Pleads Guilty in Scam Involving More Than $400,000 in Refunds
- Defendant Had Refunds Sent to Herself and Others -

     WASHINGTON - Mary Ayers-Zander, 47, a former tax examiner for the District of Columbia Office of Tax and Revenue (OTR), pled guilty today to a federal charge of wire fraud stemming from a scheme involving more than $400,000 in fraudulent refunds.

     The guilty plea, in the U.S. District Court for the District of Columbia, was announced by U.S. Attorney Ronald C. Machen Jr., James W. McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office, Charles J. Willoughby, Inspector General for the District of Columbia, and Natwar M. Gandhi, Chief Financial Officer for the District of Columbia.

     Ayers-Zander, of College Park, Md., pled guilty before the Honorable Richard W. Roberts. She is to be sentenced February 2, 2012. Under federal sentencing guidelines, Ayers-Zander faces a likely sentence of 33 months and potentially up to 63 months in prison. As part of the plea agreement, Ayers-Zander also will be subjected to forfeiture of the proceeds of her crimes and required to pay restitution of more than $410,000 to the District government.

     According to the government’s evidence, Ayers-Zander used her position to issue fraudulent tax refunds that went into the bank accounts of herself and others. Her activities came under scrutiny as a result of enhanced control techniques by the Office of the Chief Financial Officer’s Office of Tax and Revenue to detect tax fraud and criminal activity. An audit uncovered abnormalities in the amount of tax credits Ayers-Zander was issuing. The findings were shared with the Chief Financial Officer’s Office of Integrity and Oversight. The Office of Integrity and Oversight reported the matter to the FBI’s Washington Field Office and the Inspector General’s Office for the District of Columbia.

     A joint investigation was conducted. Ayers-Zander was placed on administrative leave and her employment was subsequently terminated in June 2011 by the Office of Tax and Revenue.

     “This tax examiner was supposed to be protecting the public’s tax dollars, not squandering them on herself and her friends,” said U.S. Attorney Machen. “Today’s guilty plea demonstrates how vigilant we must be to detect abuses of the public trust in government agencies and how committed we are to prosecuting those who seek to enrich themselves at taxpayer expense.”

     “Through a scheme devised by Ms. Ayers-Zander, she lined her own pockets with D.C. taxpayer money,” said Assistant Director McJunkin.“This is another example of the FBI’s investigations which target financial corruption and hold accountable those who violate the public’s trust. Anyone with information about any type of corruption should contact the FBI.”

     “The role the D.C. Office of the Inspector General played in this matter demonstrates how local and federal authorities can work together in combating fraud, waste and abuse for the benefit of District residents,” said Inspector General Willoughby.

     “We are pleased that the internal controls we established in recent years, and the vigilance of the Office of Tax and Revenue staff, detected this breach,” said Chief Financial Officer Gandhi. “Once we brought this matter to the attention of federal law enforcement, we worked closely with them to bring it to a conclusion. We expect that Ms. Ayers-Zander will be prosecuted to the fullest extent of the law.”

     According to a statement of offense, signed by the defendant, Ayers-Zander was hired by OTR in August 2001 as a tax examining assistant. She was promoted to the position of tax examining technician in June 2007. Her duties included discussing tax situations with taxpayers, researching and analyzing current and historical tax cases, interpreting and applying guidelines and policies of the District of Columbia code, and making adjustments to existing tax filings.

     As a tax examining technician, Ayers-Zander had the ability to access a taxpayer’s account to make adjustments, including issuing refunds without contacting the taxpayer. If the amount was below $10,000, she could do this without supervisory approval. In addition, she could make electronic payments by entering a financial institution’s routing information and account number.

     On 48 occasions, from February 2007 through January 2011, Ayers-Zander accessed taxpayer accounts of four individuals and credited them with fraudulent withholding credit adjustments. This caused a total of $365,281 in electronic fund transfers to be sent from OTR’s bank account to two personal accounts that Ayers-Zander maintained.

     In addition to those payments, Ayers-Zander accessed the accounts of five other individuals 10 times, likewise crediting them with fraudulent withholding credits. This caused a total of $46,175 in fraudulent refunds to be issued directly to those individuals. Ayers-Zander also eliminated a $1,147 tax liability for one of these individuals.

     Ayers-Zander also prepared and filed fraudulent income tax returns for individuals, including one that caused a $2,195 refund to be sent.

     In announcing the plea, U.S. Attorney Machen, Assistant Director McJunkin, Inspector General Willoughby, and Chief Financial Officer Gandhi praised the work of those who investigated the case from the various agencies. They also praised those who worked on the case from the U.S. Attorney’s Office, including the Asset Forfeiture and Money Laundering Section, Paralegal Specialist Tasha Harris, and Legal Assistant Jared Forney. Finally, they commended the efforts of Assistant U.S. Attorney Susan Menzer, who is prosecuting the case.





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