LEXINGTON, Ky. – A brazen scheme to fleece the federal government during the height of the COVID-19 pandemic landed a Lexington couple in federal prison this week. Neal Harris, 57, received a 37-month sentence, and his co-defendant, Kelly Harris, 64, was slapped with 46 months, both for eight counts of wire fraud. U.S. District Judge Robert Wier handed down the sentences after a four-day jury trial in March 2024 found them guilty on all counts.
The Harrises systematically lied to the Small Business Administration (SBA) to secure Economic Injury Disaster Loans (EIDL). From May 5, 2020, through July 25, 2020, they submitted applications for five businesses, claiming over $1.4 million in 2019 revenue. The problem? Most of those businesses didn’t exist. The only legitimate business, Ruby Bailey Family Service Center, had already been dissolved in 2019. Despite the blatant fiction, they sought over $450,000 in loans, ultimately pocketing $357,600 in SBA funds for three of the phantom businesses.
A sharp-eyed local bank flagged the suspicious activity in August 2020, managing to recover the fraudulently obtained funds. But the Harrises weren’t done. They doubled down on the deception, submitting additional false documentation to the SBA in a desperate attempt to reclaim the money. The jury clearly wasn’t buying it. Adding insult to injury, both Neal and Kelly Harris were found to have obstructed justice by lying on the stand during their trial, a move that likely contributed to the severity of their sentences.
“This wasn’t a simple mistake or a misunderstanding,” stated Carlton S. Shier, IV, United States Attorney for the Eastern District of Kentucky. “This was a calculated and deliberate attempt to exploit a crisis for personal gain.” Under federal sentencing guidelines, the Harrises will serve 85% of their prison terms. Upon release, Neal Harris will face two years of supervised probation.
The investigation was a joint effort by the United States Postal Inspection Service (USPIS) and the Treasury Inspector General for Tax Administration (TIGTA). Assistant U.S. Attorney Kate Smith prosecuted the case. This case is part of the broader COVID-19 Fraud Enforcement Task Force, established by the Attorney General to aggressively pursue pandemic-related fraud schemes.
If you have information about COVID-19 fraud, authorities urge you to report it. Contact the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or submit a complaint online at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form. Don’t let these scammers get away with it.
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Key Facts
- State: Kentucky
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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