Former IRS agent sentenced for helping to hide cash transactions

By Julia Cheever, Bay City News Service

November 29, 2006

OAKLAND (BCN) - A former U.S. Internal Revenue Service agent from San Jose has been sentenced in federal court in Oakland to three years and four months in prison for helping businesses to hide large cash transactions.

Clarence Walker, 56, of San Jose, was sentenced by U.S. District Judge Saundra Armstrong on Tuesday. Armstrong also fined him $30,000 and ordered him to serve an additional year of home confinement after completing the prison term.

Walker was convicted by a jury in Armstrong's court in June of conspiracy and causing others to fail to file documents known as currency transaction reports.

Banks and businesses are required to file the reports with the IRS when they engage in cash transactions of more than $10,000.

The large cash transactions are monitored by government investigators in an effort to detect tax violations and other criminal activity.

IRS spokeswoman Arlette Lee said Walker's former job as an IRS revenue agent was to educate businesses that cashed checks, such as liquor and grocery stores, about the reporting requirement and to monitor the stores' compliance.

Prosecutors charged during the trial that despite his obligation to educate businesses, Walker entered into a conspiracy with others to hide cash transactions in order to help fund a company selling illegitimate computer software.

Lee said that evidence at the trial showed that during the conspiracy, Walker cashed more than $400,000 in checks at businesses he monitored, while instructing the check cashers not to file the required reports. Lee said Walker received $30,000 in fees for his part in the scheme.

Alan Hatcher, chief of the treasury inspector general for tax administration in Washington, D.C., said, "The public deserves and demands ethical behavior and high integrity from its government employees.''

Hatcher said, "Sadly, this individual choose a path that could only have resulted in (Tuesday's) sentencing. His actions were not typical of IRS employees, but the result would be the same for anyone who chooses to break the law,'' Hatcher said.

Walker's attorney was not immediately available for comment today.

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