A former federal prosecutor has avoided jail time, despite pleading guilty to five counts of stealing identity, which she used to open multiple online gambling accounts, according to reports.
Monica Dillon, who previously served as an assistant US attorney in the Southern District for nearly 20 years, submitted a guilty plea and pre-trial diversion agreement, which US District Judge Kenneth E Bell accepted.
Dillon ordered to pay $30,000 in restitution
Dillon profited to the tune of $1,000 from at least three of the stolen betting accounts, which she used from January 2021 until January 2023, but will only pay $30,000 to one individual, named in the case as Victim 1.
She will also serve a two year probation, reporting to the US Probation Office, but will avoid prison. In the US, federal identity theft charges can carry penalties ranging from up to five years in prison, depending on the nature of the offense. Aggravated identity theft carries a mandatory additional two-year prison sentence that must run consecutively to any other sentence.
According to her LinkedIn profile, Dillon spent decades in law enforcement and government service, including as an adviser to the Federal Bureau of Prisons and later as a federal prosecutor in West Virginia from 2005 to 2025. From 2021 to 2024, she served as deputy chief of the district’s white-collar fraud team, overseeing fraud and civil rights prosecutions.
Dillon’s West Virginia law license was annulled by voluntary consent in January after a disciplinary petition was filed against her in late 2024. Court records do not explain why she allegedly used stolen identities to open online gambling accounts or how she obtained the victims’ information.
Identity theft on the rise in online gambling
The incident comes just months after two men in Connecticut were charged with a $3 million gambling fraud scheme. In February, federal prosecutors charged two Connecticut men in what authorities describe as a large-scale identity theft and fraud scheme targeting major online gambling platforms, including FanDuel, DraftKings and BetMGM.
A 45-count federal indictment alleges Amitoj Kapoor and Siddharth Lillaney, both 29 and from Glastonbury, used stolen identities from roughly 3,000 victims to create fraudulent betting accounts and exploit promotional offers, generating about $3 million in profits over several years.
According to court filings, prosecutors say the pair purchased personal identifying information through darknet marketplaces and the messaging platform Telegram. Authorities allege the stolen data included names, Social Security numbers, birth dates, phone numbers and addresses, which were then used to bypass identity verification systems on gambling sites.
Prosecutors also said the defendants used background-check services, including BeenVerified and TruthFinder, to verify victim information and maintain fraudulent accounts.
Investigators allege the defendants used promotional credits and free bets offered to new users to place wagers across multiple gambling platforms. When bets were successful, prosecutors said the winnings were transferred onto virtual stored-value cards linked to FDIC-insured institutions before being moved into bank and investment accounts controlled by the defendants.
The indictment includes charges of wire fraud, identity fraud, aggravated identity theft and money laundering conspiracy. Kapoor and Lillaney were arrested shortly afterward and later released on $300,000 bond pending further proceedings.
Bonus abuse most widespread form of gambling fraud in America, report finds
In March, a 2026 LexisNexis Risk Solutions study, based on a survey of nearly 1,000 gaming industry executives, found 78% of operators identified “bonus abuse” as the most prevalent example of gambling fraud. This practice refers to criminals who use fake or stolen identities to exploit sign-up offers and it represents the industry’s most widespread fraud threat.
The report identified more than 95,000 fraud events linked to a single organized abuse network, representing potential losses of up to $3.2 million.
Sean Britt, senior director, global gaming markets at LexisNexis Risk Solutions, said: “Bonus abuse has become the gaming industry’s version of first-party fraud. It’s organized, repeatable and difficult to detect without multi-layered intelligence. As gaming operators compete for players through incentives and faster onboarding, they must also strengthen their defenses at the point of entry.”
Researchers said roughly 60% of fraud exposure occurs during account creation and withdrawals, with operators also reporting rising compliance costs, customer losses and reputational damage. The survey found 81% of gaming executives believe additional identity checks or onboarding delays could drive users to competitors, increasing pressure on operators to balance security with fast account access.
