A Lexington man, Neal Harris, 57, was sentenced 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 pretences.
His co-defendant, Kelly Harris, 64, was sentenced on July 2, 2024, to 46 months in prison 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.
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 before the COVID-19 pandemic, Ruby Bailey Family Service Center, was 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 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 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 per cent 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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