TAX NEWS - June 2010

D.C. Tax: D.C. tax office worker, businessman charged in bribery scam

A District tax office investigator and a Bethesda businessman have been indicted in federal court on bribery charges in what prosecutors are calling a scheme to avoid paying D.C. sales taxes.

Shelly-Ann N. Wicker, an investigator for the Office of Tax and Revenue, and John F. Craul, owner of a corporate tax consulting firm, were indicted on 28 counts of bribery and forgery charges.

The alleged scheme lasted between 2005 and 2007, ending mere months before the FBI uncovered a different $50 million scandal in the same office.

Reached by phone Wednesday, Craul called the charges ridiculous.

"I have never bribed anybody, and they don't have proof," Craul said. "If Shelly did it, she did it on her own."

Craul said he and Wicker were good friends, and he loaned her money and she paid him back.

"I wish I could afford to bribe somebody," Craul said, "but I don't have any money."

Prosecutors said Craul resorted to bribing Wicker for "obscure" sales tax breaks because new regulations making it tougher to obtain the exemptions had put a squeeze on his firm, Metropolitan Business Associates.

The exemptions were worth tens of thousands of dollars to Craul, prosecutors said. Craul's company was hired by corporate clients -- mainly restaurants, hotels, hospitals and assisted care facilities -- to obtain the tax break.

If the application were approved, Craul's business would receive half of the client's first-year tax savings and one third of the deduction during subsequent years.

But in 2005, the office of tax and revenue began to tighten the standards to obtain the exemptions, which had a significant effect on MBA's businesses, prosecutors said.

That's when Craul approached Wicker, prosecutors said.

According to the indictment, Craul met Wicker on the first floor of the D.C. government building where she worked. Prosecutors said he promised Wicker $2,000 but only gave her $1,800 in $100 bills. In return, she agreed to approve the exemptions even though Wicker was not authorized to do so. Instead, she forged her boss' signature on at least 25 certificates, prosecutors said.

The alleged scheme cost the D.C. government about $106,000.