Detroit man sentenced in pandemic unemployment fraud scheme involving multiple states

FOX 2 - A Detroit man was sentenced to over four years in a million-dollar pandemic unemployment insurance fraud scheme on Wednesday.

Tracey Dotson, 49, was pleaded guilty in the scheme that involved multiple states for money earmarked for unemployment assistance in Michigan, Pennsylvania and Maryland during the COVID-19 pandemic.

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

The backstory:

According to court records, Dotson and a co-defendant conspired and defrauded the government and the states of Michigan, Pennsylvania, and Maryland of about $1 million in funds intended to support individuals who had lost their jobs during the COVID-19 pandemic.

The pair used 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.  

They 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."