A London, Kentucky man has been sentenced to nearly two years in prison for his role in a money laundering conspiracy involving COVID-19 relief loans. Joshua Pennington, 51, received a 22-month sentence from U.S. District Judge Claria Horn Boom on October 17 after pleading guilty to conspiracy to commit money laundering related to fraudulent Economic Injury Disaster Loans and Paycheck Protection Program loans.
According to court documents, Nicole Pennington, a co-defendant in the case, submitted false information on applications for Small Business Administration (SBA) loans that were intended for those affected by the COVID-19 pandemic. Authorities said six of these loan applications were approved, resulting in $1,090,398.35 being fraudulently obtained.
Between May 2020 and June 10, 2021, Joshua Pennington and Nicole Pennington laundered more than $1 million through various transactions exceeding $10,000 each. The funds were used for personal expenses including kitchen renovations, plastic surgery procedures, a Viking River Cruise trip, cash withdrawals, vehicle purchases, and paying off loans and mortgages.
Nicole Pennington is scheduled to be sentenced on January 27, 2026.
Federal law requires Joshua Pennington to serve at least 85 percent of his prison term before becoming eligible for release. After completing his sentence, he will be supervised by the U.S. Probation Office for two years.
Paul McCaffrey, Acting United States Attorney for the Eastern District of Kentucky; Kelly K. Moening of the Treasury Inspector General for Tax Administration; and Karen Wingerd of IRS-Criminal Investigations announced the sentencing.
The investigation was conducted by agents from both the Treasury Inspector General for Tax Administration and IRS-Criminal Investigations. Assistant U.S. Attorney Brittany Dunn-Pirio prosecuted the case.
In response to widespread fraud during the pandemic relief efforts, the Department of Justice established the COVID-19 Fraud Enforcement Task Force in May 2021 to coordinate resources across agencies and strengthen efforts against pandemic-related fraud schemes. More details about this initiative are available at https://www.justice.gov/coronavirus.
Individuals with information about suspected COVID-19 relief fraud can contact authorities via phone or online through the National Center for Disaster Fraud: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
