Detroit Man Sentenced To Over Four Years in Federal Prison For Participating In Multi-State Pandemic Unemployment Insurance Fraud Scheme

Summary

Press release of the U.S. Attorney's Office, Eastern District of Michigan, dated February 19, 2025. Tracey Dotson of Detroit was sentenced by United States District Judge Matthew F. Leitman to 51 months in prison and ordered to pay restitution of more than $900,000. The release says Dotson and a co-defendant defrauded the federal government and the states of Michigan, Pennsylvania, and Maryland of roughly $1 million in unemployment funds, using stolen identification to file hundreds of false claims. Bank of America prepaid debit cards loaded with roughly $1 million in Pandemic Unemployment Assistance funds were used to withdraw more than $930,000 in cash and purchases. Dotson pleaded guilty to wire fraud and conspiracy to commit wire fraud in April 2024.

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Full text

PRESS RELEASE


Detroit Man Sentenced To Over Four Years
in Federal Prison For Participating In
Multi-State Pandemic Unemployment
Insurance Fraud Scheme
Wednesday, February 19, 2025

For Immediate Release
U.S. Attorney's Office, Eastern District of Michigan

DETROIT - A man from Detroit, Michigan was sentenced today for his role in a multi-
state, million-dollar unemployment insurance fraud scheme aimed at defrauding the
U.S. government and the states of Michigan, Pennsylvania, and Maryland, of funds
earmarked for unemployment assistance during the COVID-19 pandemic, announced
Acting United States Attorney Julie A. Beck.

Joining in the announcement were Special Agent in Charge Cheyvoryea Gibson, Federal
Bureau of Investigation, Special Agent in Charge Charles Miller, Internal Revenue
Service-Criminal Investigation, and Megan Howell, Acting Special Agent in Charge,
Chicago Region, U.S. Department of Labor Office of Inspector General.

Tracey Dotson, 49, was sentenced to 51 months in prison and ordered to pay more than
$900,000 in restitution in the sentence handed down by United States District Judge
Matthew F. Leitman.

According to court records, Dotson and a co-defendant conspired to, and did, defraud
the federal government and the states of Michigan, Pennsylvania, and Maryland of
roughly $1 million in funds intended to support individuals who had lost their jobs
during the COVID-19 pandemic. The pair committed their crimes through the use of
interstate wires and the unauthorized possession and use of social security numbers and
other means of identification belonging to other individuals.

Dotson pleaded guilty to wire fraud and conspiracy to commit wire fraud in April 2024.
Dotson and his co-defendant, using stolen personal identification, filed hundreds of
false unemployment claims with state unemployment insurance agencies in Michigan,
Pennsylvania, and Maryland in the names of other individuals without their knowledge
or consent. The defendants then received hundreds of Bank of America prepaid debit
cards in the names of those individuals loaded with roughly $1 million in Pandemic
Unemployment Assistance funds at addresses in Michigan and Pennsylvania. Dotson, his
co-defendant, and their accomplices then successfully unloaded more than $930,000
from the cards via cash withdrawals and purchases that included high-end jewelry,
designer fashion accessories by Gucci and Louis Vuitton, drugs, at least one vehicle, and
at least one firearm.

“Taxpayer unemployment assistance funds diverted to the pockets of criminals during
the pandemic resulted in fewer resources that were available for those genuinely in
need at that challenging time,” said Acting U.S. Attorney Julie Beck. “Our office is
steadfast in its commitment to bringing those to justice who used a global health crisis
as a means to illegally line their own pockets at the expense of taxpayers. “

"This sentence underscores the FBI's commitment to investigating complex financial
crimes," said Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. "We
will not tolerate the greed and selfish conduct demonstrated by those who chose to
defraud the unemployment insurance system, especially when we faced an
unprecedented global pandemic. The FBI and our federal partners remain steadfast in
holding criminals accountable and protecting government assistance programs. The
pandemic may be in our rearview mirrors, but our investigations continue to move
forward in the name of justice."

“Individuals who commit such blatant unemployment insurance fraud and identity theft
of this magnitude deserve to be punished to the fullest extent of the law,” said Charles
Miller, Special Agent in Charge, Detroit Field Office, IRS Criminal Investigation. “Tracey
Dotson and his co-conspirator took advantage of a program intended to help those in
need get through a devastating global pandemic, exposed personal identity information
of many, and caused immeasurable hardship to innocent victims. IRS Criminal
Investigation remains committed to the pursuit of pandemic fraud and identity theft,
together with our partners at the U.S. Attorney’s Office, we will hold those who engage
in similar conduct accountable.”

"Tracey Dotson and his co-conspirator defrauded multiple state workforce agencies by
using stolen identities to obtain unemployment insurance (UI) benefits. As a result, he
stole vital taxpayer resources intended for unemployed American workers in dire need
of UI benefits. Today’s sentencing affirms the Office of Inspector General’s commitment
to work with our law enforcement partners to investigate and bring to justice those who
exploit this critical benefit program,” said Megan Howell, Acting Special Agent-in-
Charge, Great Lakes Region, U.S. Department of Labor, Office of Inspector General.
This case was prosecuted by Assistant United States Attorneys Carl D. Gilmer-Hill and
Jessica A. Nathan. The investigation was conducted jointly by the Federal Bureau of
Investigation, Internal Revenue Service - Criminal Investigation, and Department of
Labor, Office of Inspector General.

Updated February 19, 2025

Topic
CORONAVIRUS


Component
USAO - Michigan, Eastern


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