$400K COVID Scam UNCOVERED — Taxpayers Fleeced

Briefcase with handcuffs and stacks of US dollars

A Detroit man allegedly stole the identities of 12 Americans to siphon over $400,000 from taxpayer-funded COVID relief programs, exposing the rampant fraud that plagued pandemic assistance and left hardworking families footing the bill.

Story Snapshot

Stanley Butts, 58, charged with stealing 12 identities to fraudulently claim over $300,000 in unemployment benefits and more than $100,000 in rental assistance
Michigan Attorney General Dana Nessel announced charges on February 5, 2026, following a coordinated investigation by state agencies
Butts arraigned with bond set at $200,000, faces multiple felony counts for identity theft and false pretenses
Case highlights ongoing abuse of COVID-era aid programs that drained billions from state trust funds nationwide

Massive Fraud Scheme Targets Pandemic Relief Programs

Stanley Butts of Detroit was arraigned on February 4, 2026, before Magistrate Judge Laura A. Echartea in 36th District Court on charges of stealing identities to defraud Michigan’s Unemployment Insurance Agency and the State Housing Development Authority. Prosecutors allege Butts used personal information from at least 12 individuals to submit fraudulent claims totaling over $300,000 from the UIA and more than $100,000 from the COVID Emergency Rental Assistance program administered by MSHDA. The defendant posted a $200,000 bond with 10 percent required and awaits a probable cause conference on February 12, 2026, followed by a preliminary examination on February 19.

Michigan AG: Detroit Man Stole 12 Identities to Collect Over $400,000 in Public Aid
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— Townhall Updates (@TownhallUpdates) February 7, 2026

Taxpayer-Funded Programs Exploited During Economic Crisis

The fraud targeted assistance programs established during the COVID-19 pandemic to support unemployed workers and renters facing eviction. These programs were designed to help struggling Michigan families during an unprecedented economic crisis, yet vulnerabilities in verification systems allowed bad actors to exploit them. Michigan’s unemployment trust fund, like those across the nation, suffered billions in losses from widespread fraud during the pandemic years. Attorney General Nessel emphasized that these programs exist for difficult times, not as opportunities for theft that harms innocent victims and taxpayers who fund the safety net.

State Agencies Strengthen Anti-Fraud Collaboration

The case originated from referrals by the UIA and MSHDA after agencies detected irregularities in benefit claims. A 2024 Memorandum of Understanding between MSHDA and the Department of Attorney General formalized enhanced collaboration on large-scale fraud investigations and prosecutions. UIA Director Jason Palmer stated his commitment to fraud-free service and protecting the integrity of the unemployment trust fund. MSHDA CEO Amy Hovey noted that fraud undermines critical support systems meant to serve vulnerable populations. This coordinated approach reflects increased scrutiny of pandemic-era aid programs and signals tougher prosecutions ahead for public assistance fraud.

Victims and Communities Bear the Costs

The 12 identity theft victims face potential credit damage and complications from having their personal information misused for fraudulent claims. Detroit and Michigan residents lose access to resources when funds are diverted to criminals instead of legitimate claimants. Taxpayers ultimately absorb losses exceeding $400,000 from this single case, while administrative costs rise as agencies implement stricter verification measures. The fraud erodes public trust in assistance programs at a time when economic recovery remains fragile. This undermines the safety net conservatives support for truly needy Americans, while enabling the kind of government waste that frustrates taxpayers and demonstrates why oversight matters.

Butts is presumed innocent until proven guilty, but the charges illustrate a pattern Michigan’s Attorney General has aggressively pursued across sectors. Just weeks earlier, on January 20, 2026, Nessel charged Tamela Peterson with health care fraud at Oxford Recovery Center, showing the office’s focus on false claims against public programs. The upcoming court hearings will determine whether sufficient evidence exists to proceed to trial on multiple felony counts that carry serious penalties for identity theft and obtaining money under false pretenses.