(Washington, DC) Several individuals, including two employees from the Office of Tax and Revenue (OTR), were arrested today for allegedly defrauding the District government of millions of dollars through a real property tax adjustment refund scheme. District Chief Financial Officer Natwar M. Gandhi made the following statement today regarding these arrests:
“This behavior on the part of those entrusted to safeguard the government’s resources is reprehensible and will not be tolerated. Those involved will be prosecuted to the fullest extent of the law. Our Office of Integrity and Oversight and the OTR Criminal Investigation Division assisted the FBI and US Attorney’s Office in conducting this investigation, and we pledge our continued support and cooperation to ensure that all involved will be punished. District taxpayers deserve a government that manages its financial affairs with integrity and accountability. The chain of command at OTR will be held accountable for this failure of management and internal controls, and I will take all appropriate administrative action necessary to address the deficiencies that exist at the agency.”
Gandhi has tasked the Office of Integrity and Oversight (OIO) to immediately undertake actions to address this matter and ensure that there are sufficient checks in the system to detect and prevent fraud in this area in the future, such as:
- Immediately issuing a directive to the Deputy Chief Financial Officer for the Office of Tax and Revenue, describing the management control failures that have been identified in the investigation. The directive includes recommendations for immediate implementation for a broader review of the system.
- Coordinating and overseeing the OTR review, which will address any additional criminal activity and/or deficient management controls.
- Requesting the assistance of the Inspector General of the District of Columbia in conducting a review of management controls at OTR, which will include other areas of potential vulnerability, to ensure that proper controls are in place.
- Expanding OIO staff assigned to review and audit the OTR. These staff members will be assigned full-time to OTR and will have specialized experience in auditing tax systems.
Gandhi said, “It is important to emphasize that this unfortunate incident does not compromise the financial stability and viability of the District. The District’s finances remain sound.”