Pennsylvania Man Sentenced to Federal Prison in Large-Scale COVID-19 Pandemic Loan Scheme

A Pennsylvania man who organized a large scheme to defraud the federal government out of COVID-19 pandemic loan moneys in 2021 was sentenced today to more than six years in federal prison.  Alhaji Kundu Aly, age 35, from Chester, Pennsylvania, formerly of Liberia, received the prison term after a June 14, 2024, guilty plea to one count of wire fraud.

In a plea agreement, and at the sentencing hearing, Aly admitted that, in 2021, he and others recruited and assisted various individuals in the Northern District of Iowa and elsewhere to apply for Paycheck Protection Program (“PPP”) loans for which they did not actually qualify, in exchange for a fee.  False, fraudulent, and fictitious documents and statements were submitted to various lending institutions in support of the PPP loans for the PPP applicants.  After the PPP applicants received the fraudulent PPP loans, it was part of the scheme to demand a portion of the PPP moneys from the PPP applicants and, if necessary, Aly traveled to demand payment in person.  Aly traveled to Iowa and demanded payment in person from a PPP applicant.  Aly admitted at his sentencing hearing that he was responsible for approximately $3.5 million in loss based on more than 170 fraudulent PPP loans as a result of the scheme to defraud.

Aly was sentenced in Cedar Rapids by United States District Court Chief Judge C.J. Williams.  Aly was sentenced to 78 months’ imprisonment.  He was ordered to make $3,478,781 in restitution the Small Business Administration and two PPP lenders.  Aly must also serve a three-year term of supervised release after the prison term.  There is no parole in the federal system.         

Aly was released on a bond previously set and is to surrender to the United States Marshal on April 28, 2025, at 10 a.m., in Philadelphia, Pennsylvania.

The case was prosecuted by Assistant United States Attorney Timothy L. Vavricek and was investigated by the Small Business Administration, Office of Inspector General, and the Federal Bureau of Investigation.  The Internal Revenue Service, Criminal Investigations, and U.S. Treasury Inspector General for Tax Administration assisted the investigation.

Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.

The case file number is 23-CR-9.

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