Evans: Arrest of D.C. employee in $400,000 theft shows reforms are working

A D.C. Council member with oversight of the city’s finances says the arrest of a government employee accused of bilking more than $400,000 from the Office of Tax and Revenue shows security reforms are having an effect.

Yet the arrest also offers a stark reminder that “there’s still a propensity of employees of this government and elsewhere to steal,” Jack Evans, Ward 2 Democrat, said.

Mary Ayers-Zander was charged Monday in U.S. District Court for the District with stealing $414,826 from the Office of Tax and Revenue in a four-year period. According to a criminal information document filed in the case — a typical indication that a plea deal is in the works — Ms. Ayers-Zander took most of the money by fraudulently adjusting withholding credits in four taxpayers’ accounts and transferring the approximately $365,000 difference into her own bank accounts.

The U.S. attorney’s office said the thefts began in February 2007, several months before another tax office employee was arrested and charged with stealing more than $48 million over a period of 18 years. After the November 2007 arrest of Harriette Walters, who lavishly spent the money she stole on luxury cars, jewelry and designer handbags, officials promised tighter controls and better policies to avoid future thefts.

However, Ms. Ayers-Zander continued her scheme through January 2011, transferring money into her two bank accounts 48 separate times. Authorities said she siphoned off the money through a series of lower-amount tax refunds that do not require approval from upper management.

She also created several fake withholding credit adjustments, totaling $46,175, and issued that money directly to five taxpayers whose accounts she accessed. Court documents did not identify the people who received the money.

Her attorney could not be reached for comment Thursday.

Natalie Wilson, a spokeswoman for Chief Financial Officer Natwar M. Gandhi, said reforms put in place after the Walters incident are working, “because we were able to uncover what Ms. Ayers-Zander was doing,” adding that a random sampling of refunds “going out the door” uncovered an irregular pattern that led to the charges.

Ms. Wilson said the tax office, even before the incident, was planning to introduce a new system that uses less manual processing, which would reduce the opportunities for theft by an employee.

Mr. Evans said he will not call for a special hearing on the charges against Ms. Ayers-Zander specifically but will use oversight sessions before his Committee on Finance and Revenue to ask the D.C. Office of the Chief Financial Officer “what further controls are being put in place to prevent this from happening.”

A D.C. Republican Party leader faulted the D.C. Council for the latest theft from the tax office, saying the council lacks accountability itself as several members have come under fire for spending and accounting practices this year.

“When you have such problems with our elected officials, how can you expect that stealing [is not occurring] and proper oversight is being done in city agencies?” asked Paul Craney, executive director of the District of Columbia Republican Committee. “This is a systematic problem in our government.”