A 40-year-old man in Virginia on probation for fraud and money laundering secured nearly $ 200,000 in COVID-19 relief loans at the start of the pandemic last year, according to federal prosecutors.
Joseph Cherry was sentenced Thursday to just over 4 years in prison on charges of wire fraud and theft of government property after pleading guilty in October, the U.S. Attorney’s Office for the Eastern District of Virginia said in a press release.
“Operating programs to help businesses in need during a global pandemic is appalling,” Special Agent in Charge Kelly R. Jackson said in the statement. “Today, Cherry learned that her actions were having repercussions.”
According to court documents, Cherry applied for an economic disaster loan on March 30 – three days after the The law on aid, relief and economic security against the coronavirus has been promulgated.
The $ 2 trillion CARES Act provided the Small Business Administration with billions of dollars fund the paycheck protection program and Economic disaster loan program for small businesses struggling to stay afloat during the pandemic.
Cherry submitted her first EIDL application for a company called “Global Concepts,” which operated as “Joes Tortured Sol,” prosecutors said in an indictment.
He provided the business address of a UPS store in a shopping mall, according to the court indictment, and claimed it was a clothing store that employed three people. But he is accused of failing to register the company with the Virginia State Corporation Commission until April 8 – nine days after the loan application was filed.
A loan of $ 197,000 was deposited in Cherry’s account on April 24, the indictment says.
On the same day, prosecutors said he withdrew $ 34,500 in cash and spent $ 296.77 at a local ABC liquor store. He then continued to make small cash withdrawals at ATMs and other branches throughout the day.
Cherry attempted to withdraw an additional $ 9,000 from the account the next day, but was refused, according to the indictment. Upon his return later that day, prosecutors said he was able to obtain a cashier’s check for $ 70,000 and withdraw an additional $ 35,000 in cash.
“Cherry informed a bank teller that he was buying houses at auction and that he would come back to the branch the next day to get the remaining $ 56,000,” the indictment reads.
He also applied for a second EIDL loan on April 3 as well as a PPP loan on April 5 for another non-existent company, prosecutors said. Neither application seems to have been successful.
It was not clear from court documents how investigators found Cherry, but law enforcement executed a search warrant at her home on May 8. dump truck, about $ 13,000 in cash and a forged business license.
Cherry was charged at the end of May and pleaded guilty to some of the charges on October 23, court documents show.
Prosecutors had been pushing for a sentence close to the upper limit of the recommended prison sentence of 41 to 51 months, pointing to his criminal record.
Cherry was previously charged with fraud, money laundering and identity theft involving a $ 1.5 million scheme in 2009, prosecutors said. He was sentenced to more than nine years in prison, returned for another three months and finally released in February 2019 with a long period of supervised release.
He was still under court supervision when the alleged offenses occurred last year.
“The accused has proven that he will take any opportunity to take advantage of himself by putting others at a disadvantage,” prosecutors wrote in the sentencing documents.
A defense attorney for Cherry had requested a sentence of just three years, pointing to mental health issues and his willingness to accept responsibility and plead guilty “very early in the process.”
But the judge disagreed, sentencing Cherry to the high end of recommended guidelines with three years of supervised release and ordering her to pay $ 57,303 in restitution, according to court documents.