FREDERICKSBURG, Va. — A 34-year-old Fredericksburg man pleaded guilty Monday to conspiracy to commit wire fraud for his role in an attempt to defraud the federal government of nearly $340,000 in COVID-19 relief funds.
According to court documents, Sherman Green Jr. admitted that in September 2017 he created a business entity called Green Information Solutions LLC and later opened business accounts for the company at Navy Federal Credit Union.
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According to court documents, a co-conspirator told Green in May 2020 about the Paycheck Protection Program, a COVID-19 relief plan intended to provide loans backed by the Small Business Administration to help businesses and other entities retain employees and stay afloat during the pandemic.
Green and a co-conspirator submitted a PPP loan application to Atlantic Union Bank on behalf of GIS. According to evidence presented in court, in addition to calling himself the company's president/CEO, Green falsely claimed it had seven employees and an average monthly payroll of $78,215.41.
Based on this information, the bank provided GIS with a first-draw PPP loan in the amount of $195,500, which was deposited into GIS's account at the bank. Green then transferred the money to GIS's business checking account at NFCU using a cashier's check. According to court documents, between May 2020 and March 2021, Green withdrew $81,131.60 from the NFCU account and deposited it into his personal bank accounts.
According to court documents, in March 2021, Green and his associate electronically submitted a second-draw PPP loan application to Atlantic Union Bank. This time, they claimed that GIS had five employees and an average monthly salary of approximately $57,486. They also misrepresented that GIS had gross receipts of approximately $1,000,500 in 2019 and $700,000 in 2020. Based on this information, GIS received $143,715 from the bank.
In addition, Green admitted in court that he created fake payroll and expense accounts for GIS at Atlantic Union Bank and then transferred funds into them. The money was used for other purposes, such as making payments to Ford Motor Credit.
Green also admitted that he transferred money from the second draw PPP loan to his personal accounts. To hide his tracks, he also created a QuickBooks account that identified the transfers as “payroll” on bank statements. He made seven of these transactions between June 15 and July 15 in 2021.
Green is due back in court on Sept. 3 for sentencing, where he faces a maximum sentence of five years in prison.