Charlotte Woman On Federal Supervised Release Is Sentenced To Prison For COVID-19 Fraud Scheme

CHARLOTTE, N.C. – Nkhenge Shropshire, 49, of Charlotte, was sentenced today to 42 months in prison followed by three years of supervised release for submitting fraudulent loan applications to the U.S. Small Business Administration (SBA) to obtain COVID-19 relief loans, announced Dena J. King, U.S. Attorney for the Western District of North Carolina.

U.S. Attorney King is joined in making today’s announcement by Tommy D. Coke, Inspector in Charge of the Atlanta Division of the U.S. Postal Inspection Service (USPIS) which oversees Charlotte.

“At a time that businesses and communities were doing their best to survive the devastating impact of COVID-19, Shropshire was busy trying to make a quick buck and take advantage of the aid administered by the government,” said U.S. Attorney King. “There’s a price to pay by those who seek to exploit federal aid programs and that’s prison time. Together with our law enforcement partners we will continue to investigate and prosecute COVID-19 fraudulent schemes and hold perpetrators of fraud accountable for their actions.”

“In the midst of a pandemic and as the economy suffered, this defendant lined her pockets by cheating the federal aid provided by the government to assist those communities who struggled during these unprecedent times,” said Inspector in Charge Coke. “Our office will relentlessly pursue fraudsters that defraud federal programs for greed and personal gain.”

According to filed court documents and court proceedings, Shropshire conspired with others to defraud the SBA by submitting fraudulent applications for Economic Disaster Relief Loans (EIDL), available under the expanded Coronavirus Aid, Relief, and Economic Security (CARES) Act, to business owners adversely impacted by the COVID-19 pandemic. To obtain a loan under the EIDL program, business owners are required to submit certain information in support of the application, including information about the business’s gross revenues in the 12 months prior to COVID-19’s impact and the number of workers employed by the company, among other things.

According to court records, between July 2, and September 2, 2020, Shropshire and her co-conspirators submitted at least 10 fraudulent EIDL applications to the SBA. The applications and supporting documents were for fictitious businesses and contained false information regarding the total number of employees employed by each business and total gross revenues. Court records show that Shropshire and her co-conspirators attempted to obtain at least $331,072 in relief funds. The SBA accepted and paid out at least $45,000 to Shropshire and her co-conspirators as a result of the scheme. Court records reflect that Shropshire spent the fraudulent proceeds on personal expenses, including hotel stays, shopping sprees, and cars.

In 2014, Shropshire was convicted of filing false tax returns and lying on a loan application and was sentenced to 33 months in prison and five years of supervised release. Shropshire was on federal supervised release when she participated in the EIDL fraud scheme.

On May 6, 2022, Shropshire pleaded guilty to wire fraud conspiracy. She is in federal custody and will be transferred to the federal Bureau of Prisons upon designation of a federal facility.

In making today’s announcement, U.S. Attorney King commended USPIS for their investigation of the case.

Assistant United States Attorney Matthew Warren, of the U.S. Attorney’s Office in Charlotte prosecuted the case.  

In May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.