A 41-year-old Baltimore woman who once worked inside Maryland's unemployment system has been sentenced to four years in federal prison and three years of supervised release for orchestrating a scheme that siphoned pandemic jobless benefits using stolen identities and her own insider access. Katrina McCant was convicted of wire fraud and aggravated identity theft after prosecutors said she spent nearly a year manipulating the state's claims system from the inside.
U.S. District Judge Julie R. Rubin handed down the sentence in Baltimore, according to the U.S. Department of Justice, District of Maryland. The sentence was announced by Kelly O. Hayes, U.S. Attorney for the District of Maryland, with participation from Anthony P. D'Esposito, Inspector General of the U.S. Department of Labor Office of Inspector General, and Jimmy Paul, Special Agent in Charge of the FBI's Baltimore Field Office. As Southern Maryland News Net first reported, the case stemmed from McCant's work as a contractor for a company that provided support services to the Maryland Department of Labor, or MD-DOL, in 2021.
How the Scheme Worked From the Inside
According to the Justice Department's account, McCant advanced the fraud scheme from January 2021 through December 2021, using her insider access to MD-DOL data and databases to upload and approve documents supporting unemployment insurance claims. She initiated some fraudulent claims herself, the department said, and took over others already in the system by changing claimants' names and email addresses to her own.
From there, prosecutors said, she removed fraud holds that had flagged suspicious claims and certified weeks of benefits on those claims, then changed the claimant names tied to direct deposits so the money landed in her own financial accounts. The scheme also relied on the personally identifiable information of multiple real individuals, who became victims of aggravated identity theft when their details were used to alter claims in the MD-DOL system, per the department's account.
Selling Fraud Help for Up to $8,000 a Claim
McCant didn't limit the scheme to her own claims, prosecutors said. She also provided fraudulent claim assistance to other individuals in exchange for one-time fees, often paid through PayPal, with those fees ranging from approximately $500 to $8,000 per claim, according to the Justice Department's release.
As part of her case, McCant agreed to pay restitution of $753,551 to the Maryland Department of Labor and to forfeit at least $550,000. An earlier FBI announcement of her guilty plea, filed by the FBI's Baltimore Field Office, had described her agreeing to pay restitution of at least $550,000 and to forfeit at least $550,000 as conditions of the plea.
A Scandal That Overwhelmed Maryland's Claims System
McCant's case lands against the backdrop of a fraud wave that swamped Maryland's unemployment system during the pandemic. The Maryland Department of Labor has said that of 243,186 new claims filed in the state since January 1, 2021, 156,403, or 64.31 percent, were flagged as potentially fraudulent because of security measures put in place to protect taxpayers, according to the agency's own account.
That figure echoes reporting from mid-2021, when Governor Larry Hogan said nearly 1.3 million fraudulent claims had been filed in Maryland since the pandemic began, and state officials told The Hill that nearly 508,000 claims had been flagged as potentially fraudulent in just six weeks. LexisNexis Risk Solutions, cited in that same report, found that nearly 64 percent of a batch of almost 200,000 claims reviewed were fraudulent. The Hill also noted a separate Maryland scheme uncovered the year before that involved $501 million in fraudulent claims and more than 47,000 false claims made using stolen identities.
McCant's case isn't the only one tied to a contractor embedded in MD-DOL's operations. In a separate case, Judge Boardman ordered a woman named Smith, who also served as a contractor for the Maryland Department of Labor, to pay $3.5 million in restitution and imposed a criminal forfeiture of $275,000 after she allowed co-conspirators to use her work access, according to a Justice Department announcement from earlier this year.
Part of a Broader Federal Fraud Crackdown
Officials cast the prosecution as part of the Trump administration's Task Force to Eliminate Fraud, which is chaired by Vice President J.D. Vance and aims to root out fraud, waste, and abuse within federal benefit programs. The Justice Department also pointed to its National Fraud Enforcement Division, announced in April, which investigates and prosecutes fraud against the American people.
Hayes commended the FBI and the Department of Labor's Office of Inspector General for their investigative work on the case, and thanked Assistant U.S. Attorneys Jared W. Murphy and Harry Gruber for prosecuting it, along with paralegal specialists Joanna B.N. Huber and Shelbe Mascaro for their assistance. The Justice Department noted that it operates the National Center for Disaster Fraud Hotline at 866-720-5721 for members of the public to report suspected fraud.
