Detroit Man Sentenced to 51 Months for Pandemic Fraud Scheme

• Feb 20, 2025

A Detroit man has been sentenced to 51 months in prison for his role in a nearly $1 million unemployment fraud scheme that targeted pandemic relief funds in Michigan, Pennsylvania, and Maryland. The scheme exploited federal assistance programs designed to help those financially impacted by COVID-19.

Tracey Dotson, 49, was sentenced on Wednesday by United States District Judge Matthew F. Leitman. In addition to his prison term, he was ordered to pay more than $900,000 in restitution, according to a press release from the U.S. Attorney's Office for the Eastern District of Michigan.

Dotson pleaded guilty in April to wire fraud and conspiracy to commit wire fraud. Prosecutors revealed that he and a co-conspirator filed hundreds of fraudulent unemployment claims using stolen Social Security numbers and other personal information. These claims were made without the knowledge or consent of the individuals whose identities were used.

The fraudulent applications led to the issuance of hundreds of Bank of America prepaid debit cards, which were loaded with unemployment benefits. These cards were sent to addresses in Michigan and Pennsylvania, allowing Dotson and his accomplice to access nearly $1 million from the Pandemic Unemployment Assistance (PUA) program. The PUA, introduced in mid-2020, was designed to extend unemployment benefits to those whose jobs were disrupted by the pandemic.

Instead of using the funds for legitimate financial relief, Dotson and others spent the money on expensive jewelry, designer accessories, illegal drugs, and at least one firearm and vehicle. The case highlights how some individuals took advantage of emergency federal aid programs at a time when millions of people were struggling to make ends meet.

Charles Miller, Special Agent in Charge of the IRS Criminal Investigation Detroit Field Office, condemned Dotson’s actions, stating that he and his co-conspirator "took advantage of a program intended to help those in need, exposed personal identity information of many, and caused immeasurable hardship to innocent victims."

The case was investigated by the IRS Criminal Investigation Division, the FBI, and the Department of Labor’s Office of Inspector General.

Acting U.S. District Attorney Julie Beck emphasized the impact of the fraud, stating that "taxpayer unemployment assistance funds diverted to the pockets of criminals resulted in fewer resources for those genuinely in need at that challenging time."