New Yorker Gets Four Years for $9m COVID Fraud Scheme

A New York woman has been jailed for nearly four years after pleading guilty to offenses related to a fraud scheme which stole millions in COVID relief funds.

Sherry Joseph, 34, pleaded guilty to conspiracy to commit wire fraud back on November 10 2022, and was handed a 45-month sentence last Friday.

Court documents revealed she recruited multiple individuals to apply for fraudulent Paycheck Protection Program (PPP) loans in exchange for kickbacks from their payment checks.

She sent their information to other co-conspirators, who prepared the loan applications, including faked bank statements and payroll tax forms, and exaggerated the number of employees and amount of monthly payroll the applicants had.

All 30 of those charged with participation have been convicted, in the Southern District of Florida, Northern District of Ohio, and Middle District of North Carolina, according to the Department of Justice (DoJ).

Joseph herself was apparently on pretrial release for separate federal fraud-related offenses in the District of New Jersey when she participated in the scheme.

The false applications sought a total of $9.2m in forgivable PPP loans guaranteed by the Small Business Administration under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Alongside her jail term, Joseph has been ordered to serve three years of supervised released and pay over $1.6m in restitution and $55,000 in forfeiture.

With the US government shelling out trillions during the pandemic in a bid to soften its impact on the economy, fraudsters were often first in line for handouts.

In December 2021, the Secret Service estimated that as much as $100bn may have been stolen. As of that month, the government said that 150 individuals in 95 criminal cases had been prosecuted since the CARES Act was rolled out.