Two mid-level employees from Washington DC’s Office of Tax and Revenue and three alleged accomplices were charged yesterday with offences, including mail fraud, bank fraud and money laundering, according to US media reports.
Authorities told The Washington Post they had evidence of doctored refunds dating back to 2004 totalling $US16m (£4.5m), but the total amount could be more and the activity might have started as early as 2000.
The group allegedly used the Washington DC's property tax refund system for residents or businesses that overpay their taxes. One of the accused tax officials approved vouchers for all 42 fraudulent refunds, according to the affidavit. It is alleged the money was put into the accounts of front companies controlled by the family members.
Natwar Gandhi, Washington CD chief financial officer and head of the tax office, said such schemes could occur despite the city's system for checking for fraud. He said four high-ranking finance officials, including a deputy financial officer in charge of the tax office, have resigned.
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