Perjury and Sophisticated-Means Enhancements in COVID-19 EIDL Fraud Sentencing: Commentary on United States v. Kelly Harris (6th Cir. 2025)

I. Introduction

This commentary analyzes the Sixth Circuit’s unpublished decision in United States v. Kelly Harris & Neal Harris, Case Nos. 24‑5622/5627 (6th Cir. Dec. 17, 2025), arising out of fraudulent applications to the federal COVID‑19 Economic Injury Disaster Loan (EIDL) program. Although the opinion is “not recommended for publication” and therefore non‑precedential under Sixth Circuit rules, it is a detailed application of settled doctrines in three important areas:

Wire‑fraud prosecutions based on pandemic‑relief fraud,
Perjury‑based obstruction‑of‑justice enhancements under U.S.S.G. § 3C1.1, and
Sophisticated‑means enhancements under U.S.S.G. § 2B1.1(b)(10)(C) in the context of online benefit fraud using sham entities and post‑hoc documentation.

The case involves a married couple, Kelly and Neal Harris, convicted by a jury of multiple counts of wire fraud for submitting false EIDL applications on behalf of largely fictitious or non‑operational businesses and then withdrawing federal funds for personal use. On appeal, they challenged the sufficiency of the evidence, the reasonableness of their sentences, and, in Kelly’s case, the application of sentencing enhancements and an alleged denial of effective assistance of counsel.

The Sixth Circuit, in an opinion by Judge Mathis joined by Judges Griffin and Thapar, affirmed across the board. Though the panel purports to break no new legal ground, the decision is a clear and instructive application of existing standards to the now‑common category of COVID‑19 relief‑fraud cases, and it reinforces how trial testimony and even relatively “pedestrian” schemes can trigger serious sentencing consequences.

II. Summary of the Opinion

A. Factual Background

In response to the COVID‑19 pandemic, Congress expanded the SBA‑administered EIDL program to provide loans and grants to small businesses. From May to July 2020, Kelly and Neal Harris submitted numerous online EIDL applications for entities they claimed to operate:

Kelly’s entities: Ruby E. Bailey Family Service Center, Inc. (“Ruby Bailey”); Turtle Doves LLC; North Side Market.
Neal’s entities: Grace Christian Fellowship Church (“Grace Christian”); American Workhorse LLC.

The government’s evidence showed that these entities had little to no actual business activity, revenue, employees, or physical operations. The couple repeatedly revised and resubmitted applications—changing, among other things, the business sector from “faith‑based” to “agricultural” (which was then eligible for EIDL funds)—until some applications were approved. Ultimately, the SBA disbursed:

$102,200 for Turtle Doves,
$152,900 for Ruby Bailey, and
$99,200 for Grace Christian,

for a total of $357,300 (plus a $3,000 advance for American Workhorse). Nearly half of these funds were withdrawn in cash or spent on personal expenses before Central Bank, concerned by large cash withdrawals, froze the accounts and ultimately returned $186,503.37 to the SBA.

Federal agents and bank employees testified that:

Tax and unemployment records showed no employees for the funded entities.
Kelly and Neal’s 2019 tax returns did not match the six‑figure business revenues claimed in their EIDL applications.
The addresses listed for the supposed businesses did not correspond to functioning businesses (e.g., one was a closed Pizza Hut).
Kelly created tax returns and other paperwork for the entities only after funds were disbursed and questioned, suggesting post‑hoc attempts to legitimize the entities.

Both Kelly and Neal testified, claiming that any inaccuracies in the applications were the result of good‑faith mistakes, confusion about the questions (for example, about “lost rents”), technological issues submitting applications from a phone, or misunderstandings (such as counting children as “employees”).

The jury convicted both defendants on all counts. At sentencing:

The district court applied a two‑level obstruction‑of‑justice enhancement to Kelly, finding that she committed perjury at trial.
The court applied a two‑level sophisticated‑means enhancement to Kelly (and apparently to Neal as well, though his opinion focuses less on this point), based on the overall structure and execution of the scheme.
Kelly’s Guideline range was 46–57 months; she received 46 months. Neal’s range was 37–46 months; he received 37 months.

B. Issues on Appeal

On appeal, the defendants raised four principal issues:

Sufficiency of the evidence to support the wire‑fraud convictions (both Kelly and Neal).
Procedural reasonableness of Kelly’s sentence (incorrect application of obstruction‑of‑justice and sophisticated‑means enhancements).
Substantive reasonableness of both sentences (alleged overemphasis of the loss amount and underweighting of their limited criminal histories and community contributions).
Ineffective assistance of counsel as to Kelly (raised on direct appeal based on counsel’s alleged repeated missteps, including calling his own client a “fraudster”).

C. Holdings

The Sixth Circuit held:

The evidence was sufficient to support all wire‑fraud convictions for both defendants.
The record was inadequate to resolve Kelly’s ineffective assistance of counsel claim on direct appeal; she must raise it, if at all, in a 28 U.S.C. § 2255 motion.
The district court properly applied the obstruction‑of‑justice enhancement to Kelly based on her perjury at trial, and correctly applied the sophisticated‑means enhancement based on the totality of her conduct.
Both sentences, which were at the bottom of the advisory Guidelines ranges, were substantively reasonable and entitled to a presumption of reasonableness that the defendants did not overcome.

III. Detailed Analysis

A. Legal Framework and Standards Applied

1. Wire Fraud under 18 U.S.C. § 1343

The Sixth Circuit reaffirmed the familiar three‑element test for wire fraud, drawing on United States v. Daniel, 329 F.3d 480 (6th Cir. 2003):

A scheme or artifice to defraud (or obtain money or property by false or fraudulent pretenses);
Use of interstate wire communications in furtherance of the scheme; and
Intent to deprive the victim of money or property (specific intent to defraud).

The Harrises did not contest the “interstate wire” element, since the EIDL application process is online and obviously reliant on interstate wire transmissions. The dispute focused on:

Whether there was a scheme to defraud—i.e., materially false statements that could influence a reasonable decision‑maker (citing Daniel and United States v. Robinson, 99 F.4th 344 (6th Cir. 2024)), and
Whether the defendants possessed the necessary specific intent to induce the SBA to part with funds by deception (citing Daniel and United States v. Davis, 490 F.3d 541 (6th Cir. 2007)).

2. Sufficiency-of-the-Evidence Standard

Citing Musacchio v. United States, 577 U.S. 237 (2016), and Sixth Circuit cases such as United States v. Emmons, 8 F.4th 454 (6th Cir. 2021), the court applied the standard de novo:

Whether, viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the elements of the crime beyond a reasonable doubt.

Critical sub‑rules emphasized by the panel:

Appellate courts do not re‑weigh credibility; conflicts in testimony and competing inferences are for the jury (United States v. Johnson, 79 F.4th 684 (6th Cir. 2023)).
“Substantial and competent evidence” is enough—even if circumstantial, and even if other innocent explanations are possible (United States v. Vichitvongsa, 819 F.3d 260 (6th Cir. 2016); United States v. Grubbs, 506 F.3d 434 (6th Cir. 2007)).
Circumstantial evidence alone can sustain a conviction and need not rule out every hypothesis of innocence (United States v. LaVictor, 848 F.3d 428 (6th Cir. 2017); United States v. Gonzalez, 512 F.3d 285 (6th Cir. 2008>).

3. Ineffective Assistance of Counsel on Direct Appeal

As to Kelly’s Sixth Amendment claim, the court invoked a line of cases—United States v. Zheng, 27 F.4th 1239 (6th Cir. 2022); United States v. Lopez‑Medina, 461 F.3d 724 (6th Cir. 2006); United States v. Hynes, 467 F.3d 951 (6th Cir. 2006)—and the Supreme Court’s holding in Massaro v. United States, 538 U.S. 500 (2003):

IAC claims are typically not resolved on direct appeal because the trial record seldom reveals “why” counsel acted as he did; it usually shows only “what” he did.
The proper vehicle is a 28 U.S.C. § 2255 motion, where the record can be developed with affidavits, testimony, and an evidentiary hearing.
Only if the existing record is “adequate to assess properly the merits” will the court consider such a claim on direct appeal. Here, the record was not sufficient.

4. Sentencing: Procedural and Substantive Reasonableness

For sentencing, the court followed Gall v. United States, 552 U.S. 38 (2007), and Sixth Circuit cases like United States v. Tristan‑Madrigal, 601 F.3d 629 (6th Cir. 2010), United States v. Simmons, 501 F.3d 620 (6th Cir. 2007), and United States v. Rayyan, 885 F.3d 436 (6th Cir. 2018).

Procedural reasonableness concerns:
- Proper calculation of the Guidelines range,
- Consideration of § 3553(a) factors,
- Reliance on accurate facts, and
- Adequate explanation of the sentence.
Substantive reasonableness asks whether the sentence is “greater than necessary” to achieve the purposes of § 3553(a). The standard is abuse of discretion.
A within‑Guidelines sentence is entitled to a presumption of reasonableness on appeal (United States v. Vonner, 516 F.3d 382 (6th Cir. 2008) (en banc); reaffirmed and applied in United States v. Xu, 114 F.4th 829 (6th Cir. 2024)).
Defendants can rebut this presumption only by showing the court picked a sentence arbitrarily, ignored key factors, or placed unreasonable weight on one factor (Xu; United States v. Woodard, 638 F.3d 506 (6th Cir. 2011)).

5. Obstruction of Justice – Perjury (U.S.S.G. § 3C1.1)

The obstruction enhancement in § 3C1.1 covers conduct that “willfully obstructed or impeded” the administration of justice and includes “the commission of perjury.” Relying on United States v. Maliszewski, 161 F.3d 992 (6th Cir. 1998), and especially United States v. Castro, 960 F.3d 857 (6th Cir. 2020), the panel emphasized:

The district court must specify which parts of the defendant’s testimony were perjurious and then find:
1. Falsity: the testimony was actually false,
2. Materiality: the false statement concerned a material matter, and
3. Willfulness: the statement was intentionally false, not the product of confusion, mistake, or faulty memory.
All three elements must be satisfied to avoid penalizing a defendant merely for choosing to testify.

The court reviewed these findings and their application for clear error, citing United States v. Jackson, 154 F.4th 422 (6th Cir. 2025).

6. Sophisticated Means – U.S.S.G. § 2B1.1(b)(10)(C)

Under § 2B1.1(b)(10)(C), the offense level increases if “the offense involved sophisticated means and the defendant intentionally engaged in or caused the conduct constituting sophisticated means.” The commentary defines “sophisticated means” as “especially complex or especially intricate offense conduct” related to execution or concealment and cites as examples use of fictitious entities or shell corporations.

The panel relied on several Sixth Circuit precedents:

United States v. Chappelle, 78 F.4th 854 (6th Cir. 2023) – focus on the totality of the scheme, not each individual step.
United States v. Tandon, 111 F.3d 482 (6th Cir. 1997) – even individually simple acts can qualify as sophisticated when combined.
United States v. Montgomery, 592 F. App’x 411 (6th Cir. 2014) – creation of falsified documentation supported the enhancement.
United States v. Middleton, 246 F.3d 825 (6th Cir. 2001) – use of cash and non‑traceable instruments as a sophistication factor.
United States v. Vysniauskas, 593 F. App’x 518 (6th Cir. 2015) – repetitive use of false identities in an “extensive and repetitive” scheme supported the enhancement.

The panel noted, but did not resolve, the continuing intra‑circuit question whether application of the enhancement is reviewed de novo or for clear error (United States v. Rupp, No. 22‑1240, 2023 WL 370908 (6th Cir. Jan. 24, 2023)), concluding the result would be the same under either standard.

B. Application to Kelly Harris

1. Evidence of a Scheme to Defraud and Intent to Deprive

For Kelly, the court identified a series of misrepresentations on the EIDL applications concerning:

Dates of establishment of the businesses,
Gross receipts (revenues),
Lost rents, and
Number of employees.

The evidence showed:

Tax returns and unemployment records did not corroborate any employees at the funded entities.
Kelly reported no income in 2019, yet claimed substantial revenues for her entities.
No evidence indicated that the listed addresses housed actual business operations.
Business accounts for Ruby Bailey and Turtle Doves received no deposits other than EIDL funds.
Funds were quickly withdrawn in cash or spent on personal items, not on business expenses.
Kelly created email addresses, bank accounts, and tax documents only after applying—or even after funds were frozen—suggesting a retroactive effort to “paper” the record.

From this, the court held, a rational jury could conclude:

There was a scheme to defraud, as the misstatements went to key eligibility and loan‑calculation factors (revenue and employees), plainly “material” for SBA decision‑making.
Kelly’s intent was to induce the SBA to pay funds on the basis of those lies, satisfying the specific‑intent element. The panel emphasized that intent can be inferred from circumstantial evidence, citing Davis.

Kelly’s explanations—confusion over terms like “lost rents,” difficulty reading forms on a phone, and good‑faith misunderstandings about “employees”—were arguments the jury heard and rejected. On appeal, the court’s task was not to decide whether her explanations were plausible, but whether a rational fact‑finder could accept the government’s account. Given the significant inconsistencies between her claimed financials and documented tax records, coupled with her post‑hoc creation of documents and personal use of funds, the panel deemed the government’s evidence easily “more than a scintilla” and “substantial and competent.”

2. Perjury-Based Obstruction of Justice (U.S.S.G. § 3C1.1)

The district court found that Kelly committed perjury in at least four respects, including:

Testifying that Ruby Bailey had $378,000 in revenue in 2019, and that a tax return reflected this amount;
Claiming Turtle Doves operated at a specified address and that she paid rent there;
Asserting Ruby Bailey had three employees.

Relying particularly on the first, the court affirmed the obstruction enhancement. Importantly, the Sixth Circuit:

Connected Kelly’s trial testimony on Ruby Bailey’s revenue directly to Count 5 of the indictment, where the jury found she falsely represented that same amount with intent to defraud on the EIDL application.
Reasoned that the jury’s verdict on Count 5 confirmed both the falsity and the fraudulent intent behind that revenue figure.
Held that this testimony was material, because the SBA calculated loan amounts using that revenue figure.
Concluded that this specific and repeated assertion—consistent across the application, a retroactive tax return, and in‑court testimony—could not credibly be chalked up to confusion or mistake.

Kelly argued that any inaccuracies were due to confusion, citing her subjective misunderstanding of who counted as an “employee.” The court acknowledged that confusion may negate willfulness for some statements, but emphasized that only one instance of perjury is needed to trigger the enhancement. Her unwavering insistence on a highly specific revenue figure, despite contradictory objective evidence, sufficed.

This aspect of the opinion underscores a practical lesson: when a defendant’s trial testimony simply repeats the core facts found fraudulent by the jury, a perjury‑based obstruction enhancement is very likely to be upheld if the district court carefully tracks the Castro elements.

3. Sophisticated-Means Enhancement (U.S.S.G. § 2B1.1(b)(10)(C))

The court upheld the sophisticated‑means enhancement for Kelly by looking to the “totality” of her conduct, as required by Chappelle and Tandon. The panel stressed that the enhancement is not reserved for ultra‑complex tax shelters or offshore structures; rather, it applies where the overall method of execution or concealment is especially intricate.

The conduct supporting the enhancement included:

Creation of multiple sham entities, each with its own name and purported line of business;
Repeated manipulation of application data (e.g., changing sectors from “faith‑based” to “agricultural”) to navigate SBA eligibility criteria;
Post‑hoc generation of false tax returns and other documentation to match previously fabricated figures given to the SBA;
Establishment of business bank accounts for entities only after approval, then using them primarily to receive and extract illicit funds;
Heavy reliance on cash withdrawals and transfers, which can obscure audit trails and hinder detection;
A repetitive pattern of false representations across multiple applications and entities.

Kelly objected that:

She was “not a sophisticated business person,”
She did not hide her identity or use offshore accounts, and
To the extent there was a scheme, it was “pedestrian.”

The court responded implicitly in two ways:

The relevant question is not whether she was sophisticated in a business sense, but whether the offense conduct—in its entirety—was “especially complex or intricate.”
Use of offshore accounts is just one example in the commentary; “sophisticated means” plainly includes schemes that use fictitious entities, repeated false documentation, and cash‑based transactions to secure and obscure ill‑gotten gains.

Thus, the panel placed this case in the same doctrinal category as Montgomery (false financial statements), Middleton (non‑traceable instruments and cash), and Vysniauskas (repetitive false identities), confirming that similar patterns in EIDL or other benefit‑fraud prosecutions can justify the enhancement.

4. Substantive Reasonableness of Kelly’s Sentence

The district court sentenced Kelly to 46 months, the bottom of her 46–57‑month Guidelines range. In upholding this sentence, the panel highlighted:

The court’s consideration of mitigating factors, including her minimal criminal history and community service.
Aggravating considerations, notably:
- Her refusal to accept responsibility,
- Lack of remorse, and
- Attempt to blame others or deny wrongdoing despite the evidence.
The seriousness of abusing emergency government relief funds and the importance of general deterrence in that context.
Use of Judiciary Sentencing Information (JSIN) data; although some wire‑fraud defendants receive lower sentences, her Guidelines range was not aberrant given her aggravating conduct, including perjury and sophisticated means.

Kelly essentially argued that the district court: (1) placed too much weight on loss amount and deterrence, and (2) too little on her positive personal history. The panel, citing United States v. Frei, 995 F.3d 561 (6th Cir. 2021), reiterated that mere disagreement with the district court’s balancing of § 3553(a) factors does not establish substantive unreasonableness. In the absence of arbitrariness or disregard of relevant factors, the within‑Guidelines sentence was presumed reasonable and the presumption remained unrebutted.

C. Application to Neal Harris

1. Evidence of Fraud and Intent

For Neal, the court focused on evidence that:

On his EIDL applications (Grace Christian and American Workhorse), Neal claimed combined annual revenues of $487,017.
Yet his 2019 tax return listed only $33,628 in business income, entirely from a separate barbeque business.
He opened a bank account for Grace Christian only after the SBA approved his application.
Neal then used EIDL funds for personal expenses, including fees for his personal bankruptcy attorney.
He sought cashier’s checks drawn on the Grace Christian business account payable to himself, not the church.
He was a joint owner on the Ruby Bailey and Turtle Doves accounts and personally withdrew significant amounts of cash.

Neal’s defense was to distance himself from the fraud, portraying Kelly as the mastermind:

He portrayed himself as acting at Kelly’s direction,
Claimed limited knowledge of how the funds were obtained or intended to be used, and
Sought to characterize any falsehoods as her doing.

The panel responded that—even assuming those explanations had some plausibility—they did not undermine the sufficiency of the evidence under the deferential standard. Objective documentary evidence directly contradicted his claimed revenues; his conduct in opening accounts post‑approval and using funds for personal benefit strongly supported the inference that he knew the funds were obtained by false pretenses and intended to benefit from them.

In short, the evidence was “substantial and competent” and easily “more than a scintilla”; the jury was entitled to credit it and infer intent.

2. Substantive Reasonableness of Neal’s Sentence

Neal’s 37‑month sentence, again at the bottom of his Guidelines range, was reviewed under the same substantive‑reasonableness standard. The district court:

Extensively acknowledged his lack of prior criminal history and his positive acts in the community.
Balanced these against the seriousness of his participation in the fraud and the need to deter similar conduct.
Remarked that Kelly and Neal had “pretty much equivalent culpability,” which Neal argued was an unfair conflation of their roles.

The panel found no abuse of discretion. The record showed individualized consideration of Neal’s circumstances; the “equivalent culpability” comment did not negate the court’s careful weighing of factors. Neal, like Kelly, essentially argued that the court should have weighed his mitigating factors more heavily, but under Frei and related cases, that is not enough to overturn a within‑Guidelines sentence.

D. Ineffective Assistance: Reserved for § 2255

Kelly alleged that trial counsel’s performance was deficient—for example:

Repeatedly using the word “fraudster” in reference to her,
Failing to object or introduce favorable evidence in several instances, and
Experiencing hearing difficulties that may have impeded his performance.

The panel observed that while the trial transcript shows these actions and omissions, it does not show why counsel acted as he did, nor does it clearly reveal the extent or impact of the hearing issues. Without evidence of counsel’s strategic reasoning (or lack thereof) or expert testimony concerning reasonable professional norms, the court could not responsibly apply the Strickland v. Washington two‑pronged test (deficient performance plus prejudice) on direct appeal.

Consistent with Massaro and Sixth Circuit practice, the court declined to reach the merits, leaving Kelly free to raise the claim in a post‑conviction § 2255 motion, where an evidentiary record tailored to the IAC claim can be developed.

IV. Precedents and Their Influence

The opinion draws heavily on established precedent rather than creating new doctrinal rules. Some key influences:

Musacchio & Sixth Circuit sufficiency cases: Set the extremely deferential framework under which evidentiary sufficiency is tested, strongly favoring jury verdicts.
Daniel & Robinson: Structure the definition of a “scheme to defraud” and “materiality” for wire‑fraud analysis, ensuring that misstatements about revenues, employees, and business type in EIDL applications clearly qualify as material.
Davis and circumstantial evidence: Reinforce that fraudulent intent can be inferred from behavior—e.g., post‑approval bank activity, cash withdrawals, and falsified tax filings—without any direct admission of intent.
Massaro, Lopez-Medina, Zheng: Anchor the policy of deferring IAC claims to § 2255 proceedings.
Gall, Vonner, Xu, Rayyan, Frei: Cement the dual framework of procedural and substantive reasonableness and the presumption of reasonableness for within‑Guidelines sentences, significantly limiting the chances of success for appellate sentence challenges.
Castro, Maliszewski, Jackson: Direct how district courts must carefully articulate and appellate courts review perjury‑based obstruction enhancements, ensuring that such enhancement is tied to specific, material, and intentional falsehoods.
Chappelle, Tandon, Montgomery, Middleton, Vysniauskas: Explain and expand the contours of “sophisticated means,” viewing the scheme as an integrated whole and confirming that repeated false documentation, sham entities, and cash‑based maneuvers fall within the enhancement’s ambit.

Collectively, these precedents shape Harris into a straightforward but instructive application of existing law to a modern enforcement context: pandemic‑related relief fraud.

V. Impact and Future Implications

A. Pandemic-Relief Fraud Prosecutions

While non‑precedential, Harris is likely to be cited informally by prosecutors and district courts in similar COVID‑relief or other benefit‑fraud cases. Key takeaways:

Materiality of Application Data: Revenue, employee counts, business type, and other core eligibility metrics on EIDL or similar program applications will almost always be deemed material for purposes of wire fraud.
Good-Faith “Confusion” Arguments: Claims of misunderstanding terms (like “lost rents” or “employees”) will rarely defeat sufficiency where documentary evidence (tax returns, employment filings, bank records) sharply contradicts the defendant’s account.
Circumstantial Evidence of Intent: Post‑disbursement conduct—opening accounts solely for incoming funds, cash withdrawals, payment of personal expenses, post‑hoc creation of documentation—can strongly support specific intent to defraud.

B. Sentencing in Relief-Fraud Cases

The decision confirms that, in COVID‑relief fraud:

Perjury at trial will almost certainly result in a § 3C1.1 enhancement if the district court carefully identifies and analyzes the false testimony.
Even schemes lacking international features or high‑end structuring can qualify as involving sophisticated means where:
- Multiple sham entities are involved,
- False documents are created or back‑dated to support fraud, and
- Cash withdrawals and repetitive application behavior make detection more difficult.
District courts are likely to view general deterrence as particularly important, and the Sixth Circuit appears amenable to that emphasis when reviewing sentences.
Within‑Guidelines sentences—especially at the bottom of the range—will be very hard to disturb on appeal absent clear misapplication of the Guidelines or gross imbalance in § 3553(a) analysis.

C. Practice Pointers for Defense Counsel

From a defense‑strategy perspective:

Client Testimony: Counsel must seriously weigh the risks of client testimony in fraud cases where documentary evidence is strong. Repeating demonstrably false claims under oath may both confirm guilt and trigger an obstruction enhancement.
Document Consistency: If the client’s story is inconsistent with tax returns, bank records, or official filings, counsel should consider whether to reconcile those discrepancies before trial or adjust the defense theory.
Sentencing Advocacy: When sophisticated‑means and obstruction enhancements are in play, robust arguments on the defendant’s personal history, acceptance of responsibility, and post‑offense rehabilitation may be critical to seeking a variance below the Guidelines.
Preserving IAC Claims: If counsel’s performance is in question, successor or appellate counsel should compile a detailed record for a potential § 2255 motion, understanding that the direct appeal will rarely be the vehicle to litigate effectiveness of prior counsel.

VI. Complex Concepts Simplified

1. Wire Fraud

Wire fraud occurs when someone:

Engages in a plan to cheat another out of money or property,
Uses electronic communications (internet, phone, email, etc.) as part of the plan, and
Intends to cause the victim to part with money or property by lying.

Filling out an online government form with knowingly false information that leads to the disbursement of funds is a classic example.

2. “Material” False Statements

A false statement is material if it would matter to a reasonable decision‑maker’s choice—here, whether and how much to lend. Whether the SBA actually verified the data is irrelevant; what matters is whether the information could influence the decision.

3. Specific Intent to Defraud

Specific intent means the defendant did not just make a mistake or act carelessly; rather, they lied on purpose to get money or property they were not lawfully entitled to. This can be proven with circumstantial evidence, like inconsistent documents or suspicious use of funds.

4. Procedural vs. Substantive Reasonableness in Sentencing

Procedural reasonableness asks:
- Did the judge calculate the Guidelines correctly?
- Did the judge consider all the factors the law requires (like the seriousness of the offense, the defendant’s history, deterrence, etc.)?
- Did the judge base the sentence on accurate facts?
- Did the judge explain the sentence?
Substantive reasonableness asks whether, given all the circumstances, the sentence is too long or too short in a way that is outside the range of reasonable outcomes.

5. Obstruction of Justice via Perjury (U.S.S.G. § 3C1.1)

A defendant “obstructs justice” by perjury when they:

Testify falsely under oath,
About something important to the case, and
Do so intentionally—not because of misunderstanding or faulty memory.

If a judge finds this occurred, the advisory sentence increases by two levels.

6. Sophisticated Means (U.S.S.G. § 2B1.1(b)(10)(C))

An offense involves “sophisticated means” if, viewed as a whole, the way the crime is carried out or hidden is more complex than a simple, one‑step fraud. Examples include:

Using fake companies or shell entities,
Creating bogus tax returns or financial statements,
Moving funds through multiple accounts or through cash to make tracing harder,
Repeating similar fraudulent steps across multiple applications or victims.

7. Ineffective Assistance of Counsel and § 2255

A defendant claims ineffective assistance by arguing:

The lawyer’s performance fell below reasonable professional standards; and
This poor performance likely affected the outcome.

Because trial transcripts rarely explain why lawyers made certain choices, courts usually require such claims to be brought in a later proceeding (a § 2255 motion) where additional evidence can be presented, rather than on direct appeal.

VII. Conclusion

United States v. Kelly and Neal Harris is a classic example of the Sixth Circuit applying established law to the contemporary phenomenon of pandemic‑relief fraud. Although designated “not for publication,” the opinion offers a clear template for:

How courts evaluate sufficiency of the evidence in EIDL and similar online‑application frauds;
When trial testimony morphs into perjury sufficient to justify a § 3C1.1 obstruction‑of‑justice enhancement;
How relatively ordinary tools—multiple applications, sham entities, false documents, and cash withdrawals—can, in combination, constitute “sophisticated means” under § 2B1.1; and
Why within‑Guidelines sentences in relief‑fraud cases, especially those emphasizing deterrence, are likely to withstand appellate scrutiny.

For practitioners, the decision underscores the importance of consistency between client testimony and objective documentary records, the substantial sentencing risks associated with contesting obviously false facts at trial, and the difficulty of overturning pandemic‑relief fraud sentences that sit within correctly calculated Guidelines ranges. In the broader legal context, Harris fits squarely within the judiciary’s ongoing effort to signal that emergency economic programs are not open invitations to opportunistic fraud, and that those who exploit them face serious criminal and sentencing consequences.