Local Landlord Convicted of COVID-19 Rental Assistance Fraud and Identity Theft

Lexington, KY — A local landlord has been convicted in federal court for committing multiple fraud offenses involving COVID-19 rental assistance funds. A jury found Vonnie McDaniels, 35, guilty of wire fraud, money laundering, and aggravated identity theft. The verdict was reached on September 25, 2023.

McDaniels’s fraudulent activities took place while he was under court supervision from a previous conviction related to bank fraud and identity theft. According to court records, McDaniels submitted misleading information, including falsified Internal Revenue Service forms, to obtain financial aid intended to support businesses impacted by the pandemic.

During the year 2020, McDaniels fraudulently received a sum of $193,231 in pandemic relief funds. He also filed false applications for rental assistance from the city for two properties located on Hollow Creek Road in Lexington. These applications were supported by inflated rent figures, which aimed to enhance the claims he submitted.

In 2021, McDaniels secured $45,000 from the city’s rental assistance program, which was designed to support tenants affected by job losses or reduced working hours due to the ongoing pandemic. However, he misled his tenants into believing they were ineligible for assistance, all the while continuing to collect rent from them.

Following the jury’s conviction, Chief U.S. District Judge Danny C. Reeves ordered McDaniels to be taken into custody immediately. His sentencing is set for January, where he faces a potential maximum sentence of 20 years in prison for the fraud charges.

This case unfolds as federal authorities continue to scrutinize fraudulent activities that exploit relief programs established to assist individuals and businesses struggling during the COVID-19 pandemic, underscoring the ongoing challenges in safeguarding public funds.