Anchorage woman sentenced to 5 years in federal prison in COVID-19 relief fraud case

ANCHORAGE, Alaska (KTUU) - An Anchorage woman was sentenced to five years in federal prison after pleading guilty to wire fraud and aggravated identity theft in a scheme involving COVID-19 relief funds and stolen identities.

Dusty Starr, 47, received 36 months on the wire fraud count and 24 months on the aggravated identity theft count. The sentences will be served consecutively, followed by five years of supervised release. She also was ordered to pay more than $70,000 in restitution.

Under a plea agreement, Starr pleaded guilty to counts 3 and 8 of the indictment. The remaining counts were dismissed.

According to the indictment, the wire fraud count involved a December 2021 application for rent relief through the Alaska Housing Finance Corporation.

Prosecutors said Starr used another person’s identity to falsely portray that person as a landlord seeking assistance, and $4,050 was sent to an account in the person’s name that Starr controlled. The aggravated identity theft count related to the use of that person’s identity in connection with the application.

Two victims spoke during sentencing, including Andrea Gusty, president and CEO of The Kuskokwim Corporation. Gusty said Starr’s actions would affect the corporation far into the future.

In an interview after the hearing, Gusty said COVID-19 relief checks intended for the corporation’s shareholders were stolen. She said the incident changed how the corporation banks, communicates with shareholders and issues checks, noting that many shareholders rely on the mail.

“Cases like this, and this case specifically, have directly impacted how we do business and cost us a large amount of money on an annual basis to be able to protect our shareholders from this type of fraud,” Gusty said.

Gusty said the effects extend beyond the sentence and touch nearly 4,600 people because of changes to how the corporation does business.

David Larson, 89, also addressed the court. He said he was out of state when a detective called to tell him his identity had been stolen in connection with the COVID-19 relief fraud. Larson said his mail had been rerouted to Starr, and he was no longer receiving it.

“Crimes like this to happen to older people, who aren’t computer savvy, it’s significant to get out of situations like this,” Larson said in court.

Given an opportunity to speak before sentencing, Starr apologized to the victims and discussed working to change her life after what she described as a difficult upbringing.

“I do realize I made a lot of mistakes. I do very much apologize to the victims in this case,” Starr said.

Judge Aaron Peterson acknowledged Starr’s difficult upbringing but said that, at age 47, it could no longer serve as an excuse.

“Defrauding the numerous victims and stealing from COVID relief funds is especially egregious,” he said.

Peterson also called the theft of people’s identities and the damage to their credit “quite serious.”

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