Gladys Louise Stephenson, a 48-year-old woman from Chicago, Illinois, was sentenced to federal prison on April 13 after pleading guilty to theft of government property, supplemental security income benefits fraud, and making false statements or representations.
The sentencing highlights the consequences for individuals who make false claims to receive benefits from needs-based federal programs. The case involved fraudulent activity across multiple agencies and pandemic-related relief efforts.
According to information presented at her plea and sentencing hearings, Stephenson made false statements between March 2017 and April 2022 in order to receive Social Security benefits. She concealed her marital status and living arrangements from the Social Security Administration. During this period, she also provided similar false information to the Iowa Department of Human Services while receiving food and family assistance benefits.
Stephenson further committed fraud related to COVID-19 relief funds. In May 2021, she applied for a Paycheck Protection Program loan under the CARES Act by claiming nearly $100,000 in gross income as a sole proprietor. She received $20,416 based on these claims but spent the funds on personal expenses such as hotel stays and casino visits. Additionally, in January 2021 she falsely claimed unemployment due to COVID-19 by stating she had been employed as a housekeeper.
United States District Court Chief Judge C.J. Williams sentenced Stephenson in Cedar Rapids to ten months’ imprisonment and ordered restitution totaling $106,058.97—distributed among four government agencies including the Social Security Administration ($58,950.97), Iowa Department of Human Services ($15,123), Small Business Administration ($20,416), and Iowa Workforce Development ($11,569). After serving her sentence she will be subject to three years of supervised release; there is no parole in the federal system.
Stephenson remains free on bond until her surrender date of May 11.
On April 7 prior to sentencing in this case, the Department of Justice announced its new National Fraud Enforcement Division aimed at investigating misuse of taxpayer dollars within federal benefit programs—a mission aligned with President Trump’s Task Force chaired by Vice President J.D. Vance targeting fraud elimination across government assistance efforts.
Assistant United States Attorney Kyndra Lundquist prosecuted Stephenson’s case following investigations by both the Social Security Administration Office of Inspector General and Iowa Department of Inspections and Appeals.
