London Man Sentenced for Money Laundering Conspiracy Involving COVID Relief Loans

LONDON, Ky. –  A London man, Joshua Pennington, 51, was sentenced on October 17 by U.S. District Judge Claria Horn Boom to 22 months, for conspiracy to commit money laundering of fraudulently obtained Economic Injury Disaster Loans and Paycheck Protection Program loans.

According to Joshua Pennington’s plea agreement, his co-defendant, Nicole Pennington, made materially false statements on applications for Small Business Administration (SBA) loans made available to qualified applicants in response to the COVID-19 pandemic.  Six of the loan applications were approved for a total of $1,090,398.35 in fraudulently obtained SBA loan proceeds.  Between May 2020 and June 10, 2021, Joshua Pennington and his co-defendant knowingly laundered over $1,000,000 in criminally derived funds, via transactions over $10,000. They used the money to renovate their kitchen, pay for plastic surgery, purchase a Viking River Cruise trip, withdraw cash, purchase vehicles, and pay off loans and mortgages.

Joshua Pennington’s co-defendant, Nicole Pennington, is scheduled for sentencing on January 27, 2026.

Under federal law, Pennington must serve 85 percent of his prison sentence. Upon his release from prison, he will be under the supervision of the U.S. Probation Office for two years. 

Paul McCaffrey, Acting United States Attorney for the Eastern District of Kentucky; Kelly K. Moening, Special Agent in Charge, Treasury Inspector General for Tax Administration, Great Lakes Field Division; and Karen Wingerd, Special Agent in Charge, IRS-Criminal Investigations, Cincinnati Field Division, jointly announced the sentence.

The investigation was conducted by the Treasury Inspector General for Tax Administration and the IRS-CI. Assistant U.S. Attorney Brittany Dunn-Pirio is prosecuting the case on behalf of the United States.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud.  The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.  For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

– END –