SAN FRANCISCO – Sheila Denise Dunlap pleaded guilty in federal court today to engaging in a conspiracy to commit wire fraud and to 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.
Dunlap, 51, of Modesto, was charged by a federal indictment on May 13, 2021, with engaging in a wire fraud conspiracy to file scores of fraudulent applications for Economic Impact Payment (EIP) payments, commonly known as stimulus checks. The EIP program was part of the CARES Act, a federal relief bill signed into law on March 27, 2020, to address the economic fallout of the COVID-19 pandemic. 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 (known as 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. Dunlap’s son was serving a capital sentence on Death Row in San Quentin State Prison.
Dunlap admitted in her plea agreement that her son, identified in the agreement only by the 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, thus making them eligible for EIP funds. Dunlap admitted she used that 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 payments.
Dunlap detailed in her plea agreement that in or about April 2020, her son coordinated with another to email her a spreadsheet containing the PII of 9,043 individuals. Her son advised Dunlap to file the fraudulent EIP claims by first using the PII of the youngest adults listed. Both D.W. and Dunlap assessed that these younger, college-aged individuals probably lacked income sufficient to trigger the filing of a 2018 or 2019 tax return and were accordingly likely non-filers eligible for EIP payments.
Dunlap admitted that in May and June 2020 she used the PII of these real individuals – which included their names and social security numbers – to electronically filed 121 EIP claims. Dunlap admitted that each EIP claim contained false statements and directed payment to her bank account. In total, Dunlap filed claims for $145,200 in EIP payments.
Dunlap pleaded guilty to one count of wire fraud conspiracy in violation of 18 U.S.C. § 1349, which carries a maximum statutory penalty of 20 years in prison and a fine of $250,000 or not more than the greater of twice the gross gain or twice the gross loss. Dunlap also pleaded guilty to one count of aggravated identity theft in violation of 18 U.S.C. § 1028A, which carries a penalty of two years imprisonment consecutive to any other sentence imposed and a maximum fine of $250,000. A sentence, however, will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Dunlap is scheduled for her sentencing hearing before United States District Judge Susan Illston on June 24, 2022. She remains out of custody.
The case has been prosecuted by Assistant U.S. Attorneys Yoosun Koh 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.