A Baltimore man was sentenced to more than four years in federal prison for his role in an unemployment insurance fraud scheme that exploited vulnerable victims and caused losses exceeding $167,000, federal prosecutors said.
U.S. District Judge Julie R. Rubin on Tuesday sentenced Duane Watts, 46, to 54 months in prison, followed by three years of supervised release, for participating in a conspiracy that used stolen personal identifying information to file fraudulent unemployment insurance claims during the COVID-19 pandemic.
“Duane Watts has for decades contributed to his Baltimore community as a committed employee, brother, caretaker for his mother, and attentive stepfather,” his Baltimore-based attorney, David Walsh-Little, said in a statement to The Baltimore Sun. “Like everyone, his character is not defined by his worst choices. Mr. Watts accepted responsibility for his involvement in this non-violent fraud conspiracy and looks forward to continuing his service to his family and city once his sentence has concluded.”
According to court records and Watts’ guilty plea, the scheme operated from at least May 2020 through May 2021, when unemployment benefits were expanded under federal pandemic relief programs. Prosecutors said Watts and his co-conspirators used the identities of multiple victims, including individuals considered vulnerable because of mental status or cognitive impairment, to submit false claims to the Maryland Department of Labor.
Watts was also convicted of aggravated identity theft. Authorities said he obtained the personal information of real people and used it to file fraudulent claims, then accessed the resulting benefits for personal use. Prosecutors detailed numerous ATM withdrawals made with debit cards loaded with unemployment funds intended for others.
In one case cited by the government, a vulnerable victim whose identity was used in the scheme later lost her job and was unable to collect legitimate unemployment benefits because the fraudulent claims had already been filed in her name.
Two co-defendants in the case have already been sentenced. Judge Rubin previously imposed prison terms of 74 months for Tiia Woods and 57 months for Devante Smith for their roles in the conspiracy.
The fraud took place during the rollout of the federal Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted in March 2020 to provide emergency financial assistance to Americans affected by the pandemic. The law significantly expanded unemployment insurance benefits and broadened eligibility to include groups such as self-employed workers and independent contractors who typically would not qualify.
Federal authorities have said the rapid expansion of benefits, while critical for economic relief, also created opportunities for large-scale fraud.
The case was prosecuted as part of the District of Maryland Strike Force, one of five such units created by the U.S. Department of Justice to investigate and prosecute COVID-19-related fraud nationwide. The strike forces focus on complex, often multi-state schemes involving pandemic relief funds and rely on interagency teams of prosecutors, investigators and data analysts.
Prosecutors said the sentencing reflects continued efforts to hold individuals accountable for exploiting emergency programs intended to help those most in need during the public health crisis.
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