Lexington man used COVID as excuse when he couldn’t pay back fraudulent $382K loan
A Lexington man was sentenced to prison time after he got a fraudulent six-figure loan to buy an office building rented by the state. He used COVID-19 as an excuse when the state moved out and he couldn’t afford to pay the bank back.
He crafted fake documents from the state to try to make his excuse look more legitimate.
Vonnie McDaniels, 32, was convicted on two counts of bank fraud and one count of aggravated identity theft in June and was sentenced to more than two years in prison, prosecutors announced Wednesday.
McDaniels fraudulently got a $382,500 commercial loan in August 2019 to buy an office building in Frankfort. The building was being leased by the state of Kentucky at the time, according to prosecutors.
But the state terminated its lease just a few months later in December. In March 2020, McDaniels lied to Kentucky Bank and said the state was still leasing the space.
After suffering the rental income loss when the state moved out of the building, he requested loan forbearance under false pretenses. McDaniels claimed he couldn’t repay the loan because the state suspended rent payments due to the COVID-19 pandemic, prosecutors said.
“To corroborate this lie about the pandemic, McDaniels fabricated a letter from a state employee purporting to suspend lease payments at the office building, and used the name and signature of that employee,” the U.S. Attorney’s office said in a news release Wednesday.
The letter was crafted to appear as though it came from a state leasing manager, according to court records. It had letterhead from the state’s Finance and Administration Cabinet and featured the names of Gov. Andy Beshear and other state officials. The letter stated that because of COVID-19, “we are suspending rent payments to all state leased buildings until further notice.”
The falsified letter led to McDaniels’ aggravated identity theft charge.
McDaniels was investigated by the FBI and the Federal Deposit Insurance Corporation, according to prosecutors. Multiple Kentucky Bank employees and a special agent from the FDIC testified at McDaniels’ trial.
A jury convicted McDaniel less than a year after his September 2020 indictment. McDaniels must serve at least 85 percent of his sentence, which would be less than two years. He will be on federal probation for three years after his release, according to prosecutors.