Norfolk man pleads guilty to $196K COVID-19 loan fraud scheme
A convicted felon pleaded guilty today to engaging in a COVID-19 related loan fraud scheme with losses of $196,000.
According to court documents, Joseph Cherry, 40, of Norfolk, who was previously convicted of federal felony charges involving fraud and money laundering, engaged in a scheme to obtain COVID-related loan benefits through the Small Business Administration and affiliated lenders.
In addition to traditional SBA funding programs, the CARES Act, which was signed into law in March, established several new temporary programs and provided for the expansion of others to address the COVID-19 outbreak.
Such programs include the Paycheck Protection Program and the Economic Injury Distaster Loan.
In March and April, Cherry submitted multiple applications for PPP and EIDL loans. Cherry provided false information on the loan applications related to his claimed businesses, income, employment and his criminal record.
As a result of these false applications, Cherry fraudulently obtained $196,900 in loan proceeds from the U.S. Treasury into a bank account he established at Langley Federal Credit Union. In a brief period of time in April, Cherry withdrew over $100,000 in the form of cash and a cashier’s check and made various purchases inconsistent with the purposes of the PPP and EIDL programs.
Cherry pleaded guilty to wire fraud and theft of government property. He faces a maximum penalty of 30 years in prison when sentenced on March 11. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.