According to statements made by U.S. Attorney Stephanie M. Hinds, IRS-CI Special Agent in Charge Mark H. Pearson, and Treasury Inspector General for Tax Administration (TIGTA) Special Agent in Charge Rod Ammari, Sheila Denise Dunlap was sentenced today to 27 months in federal prison for participating in a conspiracy to commit wire fraud and for aggravated identity theft. The punishment was imposed by United States District Judge Susan Illston.
On March 4, 2022, Dunlap, 52, of Modesto, entered a guilty plea to participating in a wire fraud conspiracy and aggravated identity theft by submitting a large number of false applications for Economic Impact Payments (EIP), sometimes known as stimulus checks. The government CARES Act, which was passed on March 27, 2020, included the EIP programme to lessen the negative economic effects of the COVID-19 epidemic on people.
Individuals who earned less than $99,000 in 2019 on their tax returns and those whose income was so low that filing a tax return was not necessary (non-filers) were eligible to receive EIP funding under the EIP section of the CARES Act. EIP payments could reach $1,200 for each adult and $500 for each eligible child.
Dunlap acknowledged in her plea deal that she and her son plotted between March 2020 and July 2020 to collect the personally identifiable information (PII) of others and use that PII to submit an application for EIP funds. On Death Row in San Quentin State Prison, Dunlap’s son started carrying out the death penalty in 2016.
Dunlap explained in her plea deal how her son, who went by the letters D.W., supplied her with the PII of his fellow inmates, as well as the PII of other people who they felt, would be eligible for EIP funds as non-filers of 2018 or 2019 income tax returns. Dunlap acknowledged using the PII to submit many fictitious EIP fund claims via the Internal Revenue Service’s online EIP Portal.
Dunlap named her own Bank of America accounts as the EIP payment recipient on each application.
Dunlap specifically acknowledged that her son set up the sending of an email to her in or around April 2020 that contained a spreadsheet containing the PII of 9,043 people.
She and her son came up with a plan to start submitting false EIP claims by using the personal information of the youngest adults listed on the database.
According to Dunlap, she and her son thought that it was likely that the younger, college-aged people on the list did not have enough money to warrant their submitting a 2018 or 2019 tax return. These people had a higher likelihood of not filing taxes, making them eligible for EIP benefits.
Dunlap admitted that in May and June 2020, she electronically filed 121 false EIP claims using the PII of these real people, including their names, social security numbers, and other personal information.
Regardless of the applicant’s name, Dunlap’s bank account information was provided on each EIP application to receive the stimulus payout. Dunlap submitted claims totalling $145,200 in EIP payments.
In addition to the 27-month jail term, United States District Judge Susan Illston mandated Dunlap serve three years of probation after being released, as well as make full restitution. Dunlap is still at large and will turn herself in on September 30 to start serving her sentence.
Along with Jessica Chan Fierro, Ralph Banchstubbs, and Maribel Gallegos, Assistant U.S. Attorneys Christa Hall and Annie Hsieh have been prosecuting the case. An investigation by IRS-CI and TIGTA led to the prosecution.
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The COVID-19 Fraud Enforcement Task Force was established by the Attorney General on May 17, 2021, to coordinate the Department of Justice’s resources with those of other federal agencies in an endeavour to strengthen the fight against and prevention of pandemic-related fraud.
By enhancing and incorporating current coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and utilising information and insights gained from prior enforcement efforts, the Task Force supports efforts to investigate and prosecute the most responsible domestic and international criminal actors and assists agencies tasked with administering relief programmes to prevent fraud.
