SAN FRANCISCO – Sheila Denise Dunlap was sentenced today to 27 months in federal prison for engaging in a conspiracy to commit wire fraud and for aggravated identity theft, announced United States Attorney Stephanie M. Hinds, Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Mark H. Pearson, and U.S. Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA) Special Agent in Charge Rod Ammari. United States District Judge Susan Illston handed down the sentence.
Dunlap, 52, of Modesto, pleaded guilty on March 4, 2022, to engaging in a wire fraud conspiracy and in aggravated identity theft by filing scores of fraudulent applications for Economic Impact Payment (EIP) payments, commonly known as stimulus checks. The EIP program was part of the federal CARES Act signed into law on March 27, 2020, to relieve the adverse economic impact of the COVID-19 pandemic upon individuals. Under the EIP provision of the CARES Act, individuals who made less than $99,000 on their 2019 tax returns and those whose income was sufficiently low that a tax return filing was not required (non-filers) were eligible to receive EIP funds. EIP payments amounted to as much as $1,200 per adult and $500 for a qualifying child.
In her plea agreement, Dunlap admitted that she conspired from March 2020 through July 2020 with her son to obtain the personal identifiable information (PII) of others and to use that PII to apply for EIP funds. In 2016, Dunlap’s son began serving a capital sentence on Death Row in San Quentin State Prison.
Dunlap described in her plea agreement how her son, identified only by his initials D.W., sent her the PII of his fellow prisoners along with the PII of other individuals whom they suspected might qualify as non-filers of 2018 or 2019 income tax returns and thus were eligible for EIP funds. Dunlap admitted she used the PII to file multiple fraudulent claims for EIP funds through the Internal Revenue Service’s online EIP Portal. In each of the applications, Dunlap listed her own Bank of America account to receive the EIP payments.
Dunlap specifically admitted that in or about April 2020, her son arranged the delivery to her of an email containing a spreadsheet with the PII of 9,043 individuals. She and her son agreed on a strategy to begin filing fraudulent EIP claims first by using the PII of the youngest adults listed on the spreadsheet. According to Dunlap, both she and her son believed that the younger, college-aged individuals on the list likely lacked income sufficient to trigger their filing of a 2018 or 2019 tax return. These individuals were thus more likely to be non-filers and thereby eligible for EIP payments.
Using the PII of these real individuals – including their names and social security numbers and other personal details – Dunlap admitted that in May and June 2020 she electronically filed 121 fraudulent EIP claims. Each EIP application, regardless of the applicant’s name, listed Dunlap’s bank account number for payment of the stimulus check. In total, Dunlap filed claims for $145,200 in EIP payments.
In addition to the 27 month prison sentence, United States District Judge Susan Illston imposed a three year term of supervision following release from prison and ordered Dunlap pay full restitution. Dunlap remains out of custody and will surrender to begin her sentence on September 30.
The case has been prosecuted by Assistant U.S. Attorneys Christa Hall and Annie Hsieh, with the assistance of Llessica Chan Fierro, Ralph Banchstubbs, and Maribel Gallegos. The prosecution is the result of an investigation by IRS-CI and TIGTA.
On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. 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 via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.