Harwood couple pleads guilty in tax scandal

He was a public servant making $143,471 a year with the IRS.

She was a retired doctor whose clothing design company never grossed more than $15,000 a year.

But together over the past 16 years, Robert O. Steven and his wife, Dr. Patricia A. Steven, ran about $9 million through their bank accounts - buying four Jaguars, two south county homes worth $480,000 and $720,000, and numerous high-end accoutrements.

Patricia Steven, 72, pleaded guilty yesterday in U.S. District Court in Greenbelt to receipt of stolen property and conspiracy to commit money laundering as part of a multimillion-dollar property tax refund scheme involving the District of Columbia's Office of Tax and Revenue.

Her husband, Robert Steven, who worked as a division director at the Internal Revenue Service National Office in New Carrollton until his December arrest, pleaded guilty June 25 to the same charges.

When sentenced later this year, each will face the possibility of 30 years in prison and millions of dollars in fines.

"Money laundering is tax evasion in progress. It is fuel for criminals to conduct their criminal affairs and is used to manipulate and erode our financial systems," C. Andre Martin, a special agent in charge with the IRS Criminal Investigation Division, said in a prepared statement.

U.S. Attorney Rod J. Rosenstein added that this case is particularly egregious because Robert Steven, 55, worked for the IRS for more than 22 years. At the time of his arrest, he was leading the Modernization Information Technology Systems division.

"We are committed to ensuring that any government employee who betrays the public trust and steals from the taxpayers is held accountable," Mr. Rosenstein said in a prepared statement.

Prosecutors said Harriette Walters, a mid-level manager at the Washington tax office, approved fraudulent property tax refunds - cutting checks to friends and family members, including the Stevens.

According to court documents, Robert Steven and his wife laundered the money through their clothing design business, "Bellarmine Design."

That company, prosecutors said, never grossed more than $15,000 in a single year. From 1990 to 2007, however, the Stevens made dozens of deposits into company accounts totalling about $9 million. The deposits were in the form of D.C. government checks and cash and ranged from about $4,000 at the beginning to as much as $490,000 at the end.

Prosecutors said the Stevens were supposed to keep some of the money and give Ms. Walters the rest.

Over the years, the Stevens transferred at least $1,162,750 of the money into a personal bank account. Robert Steven used that money to pay for at least four Jaguars, a $720,000 home in Harwood, a $480,000 townhouse in Edgewater and multiple vacations to the Bahamas.

The Stevens also transferred $344,700 to Ms. Walters, prosecutors said.

Although no divorce paperwork has been filed in Maryland, neighbors said in December that Robert Steven and his wife were separated. Robert Steven was living in Edgewater and Patricia Steven was living in Harwood.

Neighbors recalled how the Stevens enjoyed the finer things in life - nice sports cars, gourmet food, designer clothes. They said they occasionally threw "name-dropper" parties.

The neighbors, however, didn't suspect anything nefarious. They thought Robert Steven was a high-priced tax attorney and that Patricia Steven had been a well-to-do anesthesiologist before she retired.

According to court documents, the Stevens have agreed to pay back the ill-gotten money but the scope of the fraud is unclear. Robert Steven agreed in June to pay back $9,272,312 and Patricia Steven agreed yesterday to pay back $8,833,310, but those totals include many of the same D.C. checks according to the plea agreements.

Regardless, to pay off their respective debts, the Stevens will forfeit their homes at 3721 Glebe Meadow Way in Edgewater and 4434 Indigo Lane in Harwood, the three cars they still own, two plasma-screen televisions and numerous pieces of jewelry and china. They also will forfeit all money seized in four different bank accounts.

Marcia Murphy, a spokesman for the U.S. Attorney's Office, declined to comment about how much was in the seized accounts because it is not yet public information.

The Stevens are just two of eight defendants to date to plead guilty in connection with the property tax refund scheme. A total of 12 people were charged in Washington, D.C., and Maryland.

Connie Alexander, 52, and Richard Walters, 49, both of Bowie; and Ricardo Walters, 33, of Ft. Washington, Prince George's County, and Samuel Earl Pope, 61, of Washington, D.C., have pleaded guilty to receipt of stolen property and conspiracy to commit money laundering. Walter Jones, 33, of Essex, Baltimore County, pleaded guilty to conspiracy to commit money laundering. Marilyn Yoon, 40, of Derwood, Montgomery County, pleaded guilty to possession of property obtained by fraud.