‘Theft of public funds.’ Jury convicts Lexington couple of fraud over COVID-19 loans.
A Lexington couple committed fraud in applying for more than $350,000 in loans meant to help businesses that suffered as a result of the COVID-19 pandemic, a jury has ruled.
The jury convicted Kelly Harris, 64, and Neal Harris, 57, of wire fraud on March 14 in federal court in Lexington.
Kelly Harris or Neal Harris submitted applications in 2020 for loans for the Ruby E. Bailey Family Service Center, Turtle Doves, North Side Market, Grace Christian Fellowship Church and American Workhorse LLC, according to court documents.
The Bailey Center supports programs that include community gardens, jobs for young people, food aid and help with rent and utilities, it has said in tax returns available online.
State incorporation records list Kelly Harris as the president and Neal Harris as treasurer. Neal Harris also was pastor of the church at the time he applied for a loan in 2020.
Turtle Doves was created to help Black farmers bring crops to market, a defense attorney said in a court motion.
The Harrises put false information in the loan applications, including gross receipts, lost money and the number of employees, the prosecutor, Assistant U.S. Attorney Kate K. Smith, alleged in one court document.
The applications resulted in loans totaling $357,600 for three of the businesses, according to a news release from the U.S. Department of Justice.
A bank detected the fraud in August 2020 and returned the money remaining in the business accounts, according to the release.
A defense attorney said in one document the businesses were eligible to apply for the loans and the Harrises had no intent “to deprive a victim of money or property.”
In a separate document, defense attorney Ned Pillersdorf said Kelly Harris denied making any false or fraudulent statements in the loan applications.
She provided the information during a time in which her businesses were shut down, and she believed the statements she made were accurate, Pillersdorf said.
However, the jury convicted the Harrises on eight charges each.
U.S. Attorney Carlton S. Shier IV noted in the release that the pandemic aid Congress approved was meant to help businesses stay open during the unprecedented disruption in the economy.
“When such funds get dissipated through fraud, that has two results: A theft of public funds and a shortcoming in the funds available to help those businesses who were supposed to receive it,” Shier said.
The investigation in the case was handled by the U.S. Postal Inspection Service and the Treasury Inspector General for Tax Administration.
The Harrises face up to 20 years each in prison. They are scheduled to be sentenced in July.
How to report COVID loan fraud
Anyone with information about potential fraud involving COVID-19 can call Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
