While many renters had been unable to continue paying rent because of the economic impact of the COVID pandemic, policies aimed at helping renters were thought to threaten the financial health of landlords. Some had worried that eviction moratoriums might result in tenants not paying rent, even when they have the means to do so. Evidence is limited, but there is evidence – thanks to Vonnie McDaniels – that some landlords benefited greatly from the COVID pandemic…to the detriment of the renters.
In 2021, Vonnie McDaniels submitted false applications to Lexington-Fayette Urban County Government’s Housing Service Program for tenant rent relief for two properties. After he told the tenants that they did not qualify, McDaniels then uploaded fraudulent leases while pretending to be his two tenants and vastly inflating the monthly rent. By submitting fraudulent leases and impersonating tenants, he secured $45,000 in rental assistance while still collecting rent from his tenants.
McDaniels also submitted false information to secure almost $200,000 in Economic Injury Disaster Loan (EDIL) and the Payment Protection Program loans (PPP) for businesses including one that was not operational during the pandemic. McDaniels schemes came to light during preparations related to a previous trial where he had been convicted for bank fraud and aggravated identity theft in June 2021.
On January 31, 2025, McDaniels was sentenced to eight years in prison for COVID-19 relief loan fraud, Housing Stabilization Program fraud, identity theft and money laundering. He was ordered to pay restitution amounting to $262,017.43.
Excellent job by the Federal Deposit Insurance Corporation – Office of Inspector General in this case.
Today’s Fraud of The Day is based on article “‘No respect for the law.’ Lexington landlord gets prison sentence over fraudulent loans” published by The Lexington Herald-Leader on January 31, 2025.
A Lexington landlord convicted of submitting false loan applications has been sentenced to eight years in prison. Vonnie J. McDaniels, 35, also was ordered to pay a total of $262,017 in restitution to the federal Small Business Administration, a bank in New Jersey and the Lexington-Fayette Urban County Government.
McDaniels created false tax documents and “doctored” leases and Social Security letters in applying for financial assistance available under programs designed to help small businesses and renters with the economic downturn that happened during the the COVID-19 pandemic, according to the court record.
