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Date: 07-08-2024

Case Style:

United States of America v. Neal Harris

Case Number:

Judge: Karen Caldwell

Court: The United States District Court for the Eastern District of Kentucky

Plaintiff's Attorney: The United States Attorney’s Office for Lexington, Kentucky

Defendant's Attorney:

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Description:

Lexington, Kentucky criminal defense lawyer represented the Defendant charged with Fraudulently Obtaining COVID Relief Loans

Lexington Couple Sentenced for Fraudulently Obtaining COVID Relief Loans



A Lexington man, Neal Harris, 57, was sentenced on Monday, by U.S. District Judge Karen Caldwell, to 37 months in prison, for eight counts of wire fraud, for obtaining Economic Injury Disaster Loans under false pretenses. His co-defendant, Kelly Harris, 64, was sentenced on July 2, 2024, to 46 months in prison, also for eight counts of wire fraud.

In March 2024, following a four-day jury trial, the Harrises were convicted of all the wire fraud charges against them. According to the evidence at trial, from May 5, 2020 through July 25, 2020, the Harrises submitted materially false applications to the Small Business Administration (SBA), to obtain Economic Injury Disaster Loans (EIDL), for five businesses they claimed were impacted by the COVID-19 pandemic.

In total, they claimed to run five businesses that had done a total of $1.4 million in business in 2019. In reality, none of the businesses were operational in 2019. The only business that existed prior to the COVID-19 pandemic, Ruby Bailey Family Service Center, had been dissolved in 2019. Despite this, the Harrises sought more than $450,000 in loans to which they were not entitled. They obtained $357,600 in disaster relief funds from the SBA for three of the businesses. A local bank detected the fraud in August 2020 and secured the funds remaining in the business accounts. After the bank returned the fraudulently obtained funds, Neal and Kelly Harris then submitted additional fraudulent documentation to the SBA, attempting to get these funds back. At sentencing, both defendants were found to have obstructed justice by testifying falsely at the trial.

Under federal law, the Harrises must serve 85 percent of their prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for two years.

Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky; Lesley Allison, Special Agent in Charge, United States Postal Inspection Service, Pittsburgh Field Division; and Kelly K. Moening, Special Agent in Charge, Treasury Inspector General for Tax Administration, Great Lakes Field Division, jointly announced the sentencing.

the investigation was conducted by the USPIS and Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Kate Smith is prosecuting the case on behalf of the United States.

On May 17, 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, among other methods, 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.

Outcome:

Defendant was found guilty and sentenced to 37 months in prison. Under federal law, the Harrises must serve 85 percent of their prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for two years.

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