"She had a nice run; now it's time to pay the piper. That's all there is to it."

That's what LL heard from a fellow spectator in Courtroom 24 of the E. Barrett Prettyman United States Courthouse this morning, while we waited for the greatest thief of public funds in District government history, Harriette Walters, to enter, along with man who had her future in his hands, Judge Emmet G. Sullivan.

Truth be told, Sullivan's role was not quite that dramatic. Walters and her attorney, Steven C. Tabackman and worked out a plea deal with federal prosecutors, so it was left to Sullivan only to decide whether Walters would get 15 years of incarceration or 18 years. Still, those three years were debated, quite passionately at times, by Tabackman, Assistant U.S. Attorney Timothy Lynch, and by Walters herself.

Walters entered the courtroom dressed in a blue garment, her hair short and braided. She wore glasses that she took off and placed on the table for most of the proceeding. At the beginning of the hearing, Sullivan brought Walters, 52, up to a podium answer a few perfunctory questions; she then sat back down while Tabackman did what he could to spare three years of her life.

Read More "How Harriette Walters Made Up For Her Crimes" »

Harriette Walters, mastermind of a nearly two-decade tax scam that cost D.C. taxpayers almost $48 million, will get 17 years and six months for her crimes, a sentence handed down by federal judge Emmet G. Sullivan. The 52-year-old will also have to make restitution for the $48 million that she stole. In addition, she has to pay $12 million in tax payments to the federal government and $3.2 million to the District. Walters is a former mid-level manager in the D.C. Office of Tax and Revenue who engineered a complicated tax-assessment scam.

We're here at the District's federal courthouse this morning to report on the sentencing of Harriette Walters, the central figure in the $50 million tax scam that spanned nearly two decades. Walters appeared in court wearing a blue smock, her hair short and braided. She sat behind her attorney, Steve Tabackman, who argued that his client's sentence should be on the lower end of the 15- to 18-year range laid out in the scammer's plea agreement. In a statement to Judge Emmet G. Sullivan, Tabackman cited Walters' cooperation in a D.C. Council probe of the wrongdoing as the basis for his leniency request.

Speaking for herself, Walters said, "I stand before your honor in full repentance. I never blamed anyone for my part in what I did." She went on to detail the cooperation she'd given to authorities investigating the scam and insisted that without her assistance, the scam could have been perpetrated all over again.

Once Walters finished up, Sullivan said, "It's a shame you couldn't have used your talent and your brilliance to help the D.C. government."

At that, the hearing recessed. After the break, the prosecution will make its case as to why Walters should serve the max. We'll have another report later.

Go right now to D.C. Wire and read what reporter Dan Keating turned up in a records request: Harriette Walters kissing Nat Gandhi's ass months before her $50 million embezzlement scheme was discovered. David Nakamura provides some context.

In April 2007, Gandhi decided not to accept an offer to become Amtrak's CFO, and he told his employees in an e-mail about his decision. Walters replied to that e-mail, writing, "Sir, I would like to say thank you for keeping us inform of a decision that would have impacted the employees within the CFO Cluster. I appreciate that you respected us to provide follow up to the recent news reports that we read and heard over the pat week. Thank You!"

Replied Gandhi, "Thank you. Keep up the good work."

"Snitches get stitches"---such was the mantra Harriette Walters used to effect a massive fraud on D.C. taxpayers over a 20-year span.

That's among the juicier revelations contained in the 122-page report that caps an yearlong investigation commissioned by the D.C. Council and performed pro bono by law firm WilmerHale and accounting firm PricewaterhouseCoopers. The report details massive failures in oversight and the existence of a "dysfunctional work environment" at the Office of Tax and Revenue.

The text of the report and highlights thereof to come.

UPDATE, 1:44 P.M.: A PDF of the report is available.

Here's what the report has to say about the "dysfunctional work environment" at OTR:

Many offices within the OCFO are beset by what might be described as a "culture of silence." In a nutshell, employees seem to have entered into an implicit compact not to question others' work, lest their own work be scrutinized. This culture of silence created an environment in which Walters could process real property tax refunds with little interference from her coworkers and managers. There were a number of indications suggesting that something was amiss in the Adjustment Unit, not the least of which was Walters' extravagant generosity toward co-workers. But no one spoke up, raised a question, or considered whether such generosity was appropriate. An anecdote perhaps explains the silence: when one senior OCFO manager asked his assistant, after the discovery of the fraud, why no one reported the misconduct of members of the Adjustment Unit, she responded: "snitches get stitches." When asked, during her interview, what she would have done if she had discovered a scheme similar to hers, Walters said she would not report misconduct of another Union employee.