A Lexington resident, Vonnie McDaniels, 35, received a sentence of 96 months for wire fraud and other charges linked to COVID relief programs. The sentencing was delivered by Chief U.S. District Judge Danny Reeves.
McDaniels was found guilty in September 2024 on multiple counts: four counts of wire fraud for fraudulent applications for Small Business Administration (SBA) COVID-19 relief loans and the Lexington Fayette Urban County Government’s (LFUCG) Housing Stabilization Program (HSP); two counts of aggravated identity theft; six counts of money laundering; and two counts related to offenses committed while on release conditions.
Trial evidence revealed that McDaniels submitted false information to secure an Economic Injury Disaster Loan (EDIL) from the SBA, obtaining $100,000 fraudulently. He also submitted three false Payment Protection Program (PPP) applications, receiving $93,231 for businesses including one that was not operational during the pandemic. His actions led to a total acquisition of $193,231 in disaster relief funds from the SBA.
The misuse of these funds included personal expenses such as credit card payments and purchasing property in South Carolina. This conduct came to light during preparations for a previous trial where McDaniels had been convicted of bank fraud and aggravated identity theft in June 2021.
In addition to SBA loan fraud, McDaniels falsely applied for LFUCG's HSP tenant rent relief for two properties in 2021. By submitting fraudulent leases and impersonating tenants, he secured $45,000 in rental assistance while still collecting rent from his tenants.
Federal law mandates that McDaniels serve at least 85 percent of his sentence. Following his release, he will be under supervision by the U.S. Probation Office for three years and must pay restitution amounting to $262,017.43.
The announcement of the sentencing was made by Carlton S. Shier IV, United States Attorney for the Eastern District of Kentucky, along with Kathy Enstrom from the Federal Deposit Insurance Corporation's Office of Inspector General.
The investigation into McDaniels' activities was conducted by the Federal Deposit Insurance Corporation – Office of Inspector General with Assistant U.S. Attorneys Brittany Dunn-Pirio and Andrea Mattingly Williams representing the United States in this case.