Norfolk man lied on coronavirus relief applications, got over $100K
ANorfolkmanliedabouthiscriminalhistoryandbusinesses he claimed to own on applications for coronavirus relief loans established under the federal CARES Act in the spring.
Joseph Cherry II, 40, pleaded guilty Friday in federal court to engaging in a loan fraud scheme to obtain COVID-relatedloanbenefitsthroughtheSmallBusiness Administration and affiliated lenders, according to court documents.
Cherry withdrew more than $100,000 in April and used the funds to make purchases “inconsistent with the purposes of the PPP and EIDL programs,” according to a newsreleasefromtheU.S.Attorney’sOfficeintheEastern District of Virginia.
At the end of March, Cherry applied online for an Economic Injury Disaster Loan, which was meant to provide loan assistance for small businesses, according to court documents. The loans were intended to pay fixed debts, payroll and other bills that would have been paid had it not been for the pandemic.
Cherryfirstappliedfortheloanwiththebusinessname Global Concepts, saying it was a limited liability company that sold clothing, according to court documents.
Cherry claimed the business opened in 2015, but court documents say he didn’t try to register with the Virginia State Corporation Commission until January 2020. The business was not successfully registered until April.
Court documents say Cherry falsely claimed the business made more than $1 million in gross revenue during the12monthsbeforethepandemic.Hewasofferedloans worth $197,000.
Cherry applied for at least two additional loans under thebusinessnameContraSurplusLLC,accordingtocourt documents. The business was registered in 2018 but was considered inactive because of unpaid registration fees.
On his loan applications, Cherry falsely said he had never been convicted of or plead guilty to any criminal offense other than a minor vehicle violation, according to the documents. He was actually serving a term of federal supervised release from a prior federal conviction and was not allowed to obtain loans or open bank accounts without permission.
He was previously convicted for his role in a three-year scheme to defraud USAA Bank and other financial institutions, according to Virginian Pilot archives. Cherry and his co-conspirators used stolen identities and false information on applications for military pre-commissioned loans,consumerloansandvehicleloansfrom2005-2008.