Nicole Pennington, a 50-year-old resident of London, Kentucky, was sentenced on March 17 to 44 months in prison for wire fraud and conspiracy to commit money laundering related to fraudulent COVID-19 relief loans. U.S. District Judge Claria Horn Boom handed down the sentence after Pennington admitted to submitting false applications for Economic Injury Disaster Loans (EIDL) and Paycheck Protection Program (PPP) loans.
The case highlights ongoing efforts by federal authorities to address fraud involving pandemic relief programs. The PPP and EIDL were established in March 2020 to help small businesses retain employees and cover operational expenses during the COVID-19 pandemic.
According to her plea agreement, Pennington submitted approximately 30 loan applications between March 2020 and May 2022 on behalf of real and fictitious businesses linked to herself and her husband, Joshua Pennington. These applications included false information supported by fraudulent tax returns and financial documents. Six of the applications were approved, resulting in more than $1 million in SBA loan proceeds being obtained through fraudulent means.
After receiving the funds, Nicole Pennington and Joshua Pennington laundered over $1 million by making large transactions such as renovating their kitchen, paying for plastic surgery, purchasing a cruise trip, withdrawing cash, buying vehicles, and paying off loans and mortgages. Joshua Pennington was previously sentenced to 22 months in prison for his involvement.
Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky; Kelly K. Moening, Special Agent in Charge at the Treasury Inspector General for Tax Administration; and Karen Wingerd, Special Agent in Charge at IRS-Criminal Investigations jointly announced the sentencing. The investigation was conducted by TIGTA and IRS-CI.
Under federal law, Nicole Pennington must serve at least 85 percent of her sentence before becoming eligible for release. Upon completion of her prison term, she will be supervised by the U.S. Probation Office for two years.
The Department of Justice’s Fraud Section leads prosecutions against those exploiting PPP funds. Since the CARES Act was enacted, it has prosecuted over 200 defendants in more than 130 cases involving PPP fraud and seized over $78 million in cash proceeds along with luxury items purchased with illicit funds.
Individuals with information about attempted COVID-19 relief fraud are encouraged to report it via the National Center for Disaster Fraud Hotline or its online complaint form.
