NEWPORT NEWS, Va. – A Norfolk man was indicted by a federal grand jury Friday on charges of submitting fraudulent COVID-19 disaster-related loan applications.
According to the indictment, 39-year-old Joseph Cherry II allegedly fraudulently obtain disaster-related loan benefits in the form of Small Business Administration sponsored Economic Injury Disaster loans and a Paycheck Protection Program loan.
The loans resulted in the disbursement of over $190,000 in proceeds from March 2020 to May 2020.
These SBA programs under the CARES Act are designed to provide support for small businesses in the community impacted by the COVID-19 pandemic.
“The COVID-19 pandemic continues to affect our communities in innumerable ways,” said G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia. “The CARES Act provides emergency relief to help mitigate some of those effects.”
“Fraud targeting CARES Act benefits unjustly diverts these resources away from the people and businesses who most need them. EDVA remains steadfastly committed to prosecuting those who seek to exploit this crisis for their own personal gain,” Terwilliger continued.
According to the indictment, Cherry allegedly obtained these loans under false pretenses related to fabricating his income, job status, businesses, and prior criminal record.
Additionally, in April, Cherry obtained the proceeds of over $190,000, and of that, about $140,000 was exchanged into cash or a cashier’s check within a few days.
“Providing false statements to gain access to SBA’s programs will be aggressively investigated by our office,” said Hannibal “Mike” Ware, Inspector General of the U.S. Small Business Administration.
“SBA OIG and its law enforcement partners are poised to root out fraud in SBA’s programs and bring wrongdoers to justice. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and pursuit of justice,” he said.
The Norfolk Police Department Special Operations Team assisted the U.S. Marshals Fugitive Task Force with the arrest.
“The immediacy with which the Deputy Marshals responded in making this arrest should send a clear message to those intending to misuse the financial resources our government is providing to those trying to recover from the ongoing pandemic,” said Nick E. Proffitt, U.S. Marshal for the Eastern District of Virginia.
“The public should take comfort in knowing that even in this difficult COVID-19 environment, Deputy United States Marshals are at work each and every day to help ensure the community is safe, and justice is served.”
A statement released by the Department of Justice stated that “Cherry is charged in a 10-count indictment with charges of wire fraud, theft of government property, false statements to the small business administration, and money laundering. If convicted, he faces statutory maximums ranging from 10 to 30 years in prison on each count.”
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.
If you think you are a victim of a scam or attempted fraud involving COVID-19, contact the National Center for Disaster Fraud Hotline at 866-720-5721 or via email.
The Eastern District of Virginia community is encouraged to call 804-819-5416 or email to reach their local Coronavirus Fraud Coordinator.
G. Zachary Terwilliger, U.S. Attorney for the Eastern District of Virginia; Nick E. Proffitt, U.S. Marshal for the Eastern District of Virginia; Hannibal “Mike” Ware, Inspector General of the Small Business Administration (SBA); Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office; Kelly R. Jackson, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI); and Peter R. Rendina, Inspector in Charge of the Washington Division of the U.S. Postal Inspection Service, made the announcement. Assistant U.S. Attorney Brian Samuels is prosecuting the case.
The full release can be found online at the U.S. Attorney’s Office for the Eastern District of Virginia.
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