A Lexington resident, Vonnie McDaniels, has been sentenced to 96 months in prison for wire fraud and other charges related to COVID relief programs. The sentence was handed down by Chief U.S. District Judge Danny Reeves.
McDaniels was convicted in September 2024 on multiple counts, including 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). He also faced two counts of aggravated identity theft, six counts of money laundering, and two counts of committing an offense while on conditions of release.
Evidence presented at trial revealed that McDaniels submitted false applications to the SBA, obtaining a $100,000 Economic Injury Disaster Loan (EDIL) and $93,231 through Payment Protection Program (PPP) applications. He inflated figures on his applications and provided fraudulent tax documents. In total, he acquired $193,231 in disaster relief funds from the SBA.
The investigation into McDaniels' activities began during preparations for an earlier trial in June 2021 when he was previously convicted of bank fraud and aggravated identity theft. He used the loan proceeds for personal expenses including paying off credit cards and purchasing property in South Carolina.
In addition to defrauding the SBA, McDaniels submitted false applications to LFUCG’s HSP for tenant rent relief. He falsely claimed rental assistance while continuing to collect rent from tenants who were told they did not qualify for the program. This resulted in him obtaining $45,000 in COVID rental relief assistance.
Under federal law, McDaniels is required to serve 85 percent of his sentence before being eligible for release. Following his release from prison, he will be under supervised probation for three years and must pay restitution totaling $262,017.43.
The sentencing was announced by Carlton S. Shier IV, United States Attorney for the Eastern District of Kentucky, alongside Kathy Enstrom from the Office of Inspector General at the Federal Deposit Insurance Corporation.
The case was investigated 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.
