Fredericksburg Man Pleads Guilty To Defrauding COVID-19 Relief Program

FREDERICKSBURG, VA — A 34-year-old Fredericksburg man pleaded guilty Monday to conspiring to commit wire fraud for his role in an an effort to defraud the federal government of approximately $340,000 in COVID-19 relief funding.

Sherman Green Jr. admitted that in September 2017 he incorporated the business entity Green Information Solutions LLC and later opened business accounts for the company at Navy Federal Credit Union, according to court documents.

A co-conspirator told Green in May 2020 about the Paycheck Protection Program, a COVID-19 relief plan meant to provide loans backed by the Small Business Administration to help businesses and other entities keep employees and stay afloat during the pandemic, according to court documents.

Green and the co-conspirator submitted a PPP loan application to Atlantic Union Bank on behalf of GIS. In addition to representing himself as the president/CEO of the company, Green falsely reported that he had seven employees and an average monthly payroll of $78,215.41, according to evidence presented in court.

Based on this information, the bank awarded GIS a first-draw PPP loan in the amount of $195,500, which was deposited into GIS' account at the bank. Green then used cashier's checks to transfer the money to GIS' business checking account at NFCU. 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, according to court documents. This time, they claimed GIS had five employees and an average monthly payroll of about $57,486. He also falsely reported that GIS had about $1,000,500 in gross receipts 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 set up fake payroll and expense accounts for GIS at Atlantic Union Bank and then transferred the funds into them. That money was used for other purposes, such as payment to Ford Motor Credit.

Green also admitted that he transferred funds from the second draw PPP loans to his personal accounts. To cover his tracks, he even set up a Quickbooks account that identified the transfers as "payroll" in 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, when he will face a maximum penalty of up to five years in prison.