Capitol Heights Man Sentenced To 53 Months In Federal Prison For Wire Fraud

Summary

A press release from the U.S. Attorney's Office, District of Maryland, dated July 22, 2024, announcing that U.S. District Judge Brendan A. Hurson sentenced Stephawn Watson of Capitol Heights on July 18, 2024 to 53 months in federal prison and three years of supervised release for charges related to a Maryland and California unemployment insurance (UI) fraud scheme and Illegal Possession of a Firearm. The judge ordered forfeiture of over $90,000 and restitution of $2,094,319. According to the plea agreement, Watson and co-conspirators used victims' personal identifying information to submit fraudulent pandemic UI claims, and a search of Watson's residence recovered 11 UI debit cards. The firearm charge arose from an arrest in January 2022 by the Cumberland Police Department.

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PRESS RELEASE

Capitol Heights Man Sentenced To 53 Months In Federal Prison For Wire Fraud And Illegal
Possession Of A Firearm

Monday, July 22, 2024

For Immediate Release

U.S. Attorney's Office, District of Maryland

Baltimore, Maryland – On July 18, 2024, U.S. District Judge Brendan A. Hurson sentenced
Stephawn Watson, also known as “O Dawg,” age 28, of Capitol Heights, Maryland to 53 months in
federal prison, followed by three years of supervised release, for charges related to a Maryland and
California unemployment insurance (UI) fraud scheme totaling more than $1.5 million, as well as
Illegal Possession of a Firearm. Judge Hurson also ordered Wason to forfeit over $90,000 and to pay
restitution of $2,094,319.

The sentence was announced by Erek L. Barron, U.S. Attorney for the District of Maryland; Acting
Postal Inspector in Charge Ajay Lall of the U.S. Postal Inspection Service – Washington Division;
Special Agent in Charge Michael McCarthy of Homeland Security Investigations (HSI) Baltimore;
and Special Agent in Charge Troy W. Springer of the National Capital Region, U.S. Department of
Labor’s Office of Inspector General (“DOL-OIG”); Chief Amal E. Awad of the Anne Arundel County
Police Department, Colonel Roland L. Butler, Jr., Superintendent of the Maryland State Police
(MSP); Chief Charles H. Hinnant of the Cumberland Police Department, and Special Agent in
Charge Toni M. Crosby of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) Baltimore
Field Division.

Financial assistance offered through the CARES Act included expanded eligibility for
Unemployment Insurance (“UI”) beneﬁts and increased UI beneﬁts through the Pandemic
Unemployment Assistance Program (“PUA”), Federal Pandemic Unemployment Compensation
(“FPUC”), and the Lost Wages Assistance Program (“LWAP”).

According to his plea agreement, from March 2020 to October 2021, Watson and his co-
conspirators impersonated victims to submit fraudulent claims for pandemic-related UI beneﬁts in
Maryland and in California. As part of the scheme, Watson and his co-conspirators obtained the
birthdates, social security numbers, and other personal identifying information (“PII”) of numerous
victims which they used to prepare and submit fraudulent applications for UI beneﬁts. The
applications contained false information, including the victims’ contact information, states of
residence, and availability for work. These fraudulent applications caused ﬁnancial institutions to
load UI beneﬁts onto debit cards and mail the cars to physical addresses provided and monitored
by co-conspirators. Once Watson and his co-conspirators received fraudulently obtained beneﬁts
on the debit cards, they used them for cash withdrawals and other transactions for their own
beneﬁts.

A search of Watson’s residence in February, 2021, recovered 11 UI debit cards in the names of 9
victims as well as a fraudulent account created in Watson’s name. The investigation also revealed
numerous text messages between Watson and his co-conspirators exchanging PII of victims and
discussing the execution of the UI fraud scheme. In all, Watson and his co-conspirators submitted
more than 200 fraudulent UI claims using the names and PII of victims, resulting in more than $1.6
million in losses.

Watson was also sentenced for his Illegal Possession of a Firearm based on his arrest in January
2022 by the Cumberland Police Department. At the time of his arrest, Watson was wanted for three
different warrants in three different jurisdictions for ﬁrearms related offenses. The ﬁrearm was later
determined to be stolen.

The District of Maryland Strike Force is one of ﬁve strike forces established throughout the United
States by the U.S. Department of Justice to investigate and prosecute COVID-19 fraud, including
fraud relating to the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The CARES Act
was designed to provide emergency ﬁnancial assistance to Americans suffering the economic
effects caused by the COVID-19 pandemic. The strike forces focus on large-scale, multi-state
pandemic relief fraud perpetrated by criminal organizations and transnational actors. The strike
forces are interagency law enforcement efforts, using prosecutor-led and data analyst-driven
teams designed to identify and bring to justice those who stole pandemic relief funds.

For more information on the Department’s response to the pandemic, please
visit https://www.justice.gov/coronavirus. Anyone with information about allegations of attempted
fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for
Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form
at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

U.S. Attorney Barron commended the USPIS, HSI, DOL-OIG, the Anne Arundel County Police
Department, MSP, the Cumberland Police Department, and the ATF for their work in the
investigation. Mr. Barron thanked Assistant U.S. Attorney Colleen Elizabeth McGuinn who
prosecuted the federal case.

For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available
to help the community, please visit www.justice.gov/usao-md and https://www.justice.gov/usao-
md/community-outreach.

###

Contact

Angelina Thompson
USAMD.Press@usdoj.gov
(301) 344-4338

Updated July 22, 2024

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