Fredericksburg Man Admits to PPP Loan Scam

ALEXANDRIA, Va. – Sherman Green Jr., 34, of Fredericksburg, Virginia, admitted in federal court today to conspiring to fleece the federal government out of COVID-19 relief funds. The scheme saw Green and an accomplice pocket over $339,000 in Paycheck Protection Program (PPP) loans meant to keep businesses afloat during the pandemic. Green pled guilty to one count of conspiracy to commit wire fraud, a crime that could land him in prison for up to five years.

Court documents reveal Green incorporated Green Information Solutions LLC (GIS) back in September 2017. In May 2020, when the PPP was launched, a co-conspirator tipped him off. Green, acting as President/CEO of GIS, fabricated employment and payroll numbers in a loan application to Atlantic Union Bank. He claimed GIS had seven employees and a monthly payroll of $78,215.41 – a complete fabrication. Atlantic Union Bank, with the assistance of a senior bank officer, approved a $195,500 first-draw PPP loan, depositing the funds on May 11, 2020. The money wasn’t used for payroll. It was quickly diverted.

Green then cashed out the fraudulently obtained loan with a series of cashier’s checks, depositing them into GIS’s account at Navy Federal Credit Union. Despite the checks being labeled as “payroll” or “business expenses,” GIS had no employees and no legitimate expenses. Between May 2020 and March 2021, Green systematically transferred $81,131.60 into his personal bank accounts. He wasn’t satisfied with that haul. He and his co-conspirator went back for more.

In March 2021, they submitted a second-draw PPP loan application to Atlantic Union Bank, doubling down on the lies. This time, they claimed GIS had five employees and a payroll of $57,486, along with inflated revenue figures of $1,000,500 in 2019 and $700,000 in 2020. The bank approved another $143,715 loan. Green established payroll and expense accounts at Atlantic Union Bank and promptly began funneling the funds to his personal accounts and towards payments like those to Ford Motor Credit. He attempted to cover his tracks by creating a fraudulent Quickbooks account, falsely labeling transfers as “payroll” to disguise the theft.

From June 15 to July 15, 2021, Green made seven such transactions, knowingly moving criminally-derived property under the guise of legitimate business expenses. The scheme was elaborate, but ultimately unraveled. Green is scheduled to be sentenced on September 3 before U.S. District Judge Leonie M. Brinkema. While the maximum penalty is five years, federal sentencing guidelines and other factors will determine the final outcome.

The case was investigated by a multi-agency task force including the U.S. Attorney’s Office for the Eastern District of Virginia, the AmeriCorp Inspector General, the FBI Washington Field Office, the Board of Governors of the Federal Reserve System and Consumer Financial Protection Bureau’s Office of Inspector General, the Department of Veterans Affairs Inspector General, and the Small Business Administration Office of Inspector General. Assistant U.S. Attorneys Katherine E. Rumbaugh and Heidi B. Gesch are prosecuting the case. This investigation highlights the continued federal crackdown on those who exploited the PPP program for personal gain.

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