London woman sentenced for wire fraud and money laundering conspiracy involving COVID relief loans

Date: March 17, 2026

Contact: [email protected]

London, KY - A London woman, Nicole Pennington was sentenced on Tuesday to 44 months by U.S. District Judge Claria Horn Boom for wire fraud and conspiracy to commit money laundering, arising out of a scheme to fraudulently obtain Economic Injury Disaster Loans and Paycheck Protection Program loans.

In March 2020, in response to the COVID-19 pandemic, the United States established the Paycheck Protection Program (PPP), which provided forgivable loans to small businesses as an incentive to keep their workers on the payroll, and expanded funding for the Economic Injury Disaster Loan (EIDL) program, which provided low-interest loans to small businesses to cover operational expenses. The Small Business Administration (SBA) administered both programs. According to her plea agreement, from March 2020 to May 2022, Nicole Pennington devised a scheme to defraud the government by making materially false statements on PPP and EIDL applications. In total, Pennington submitted about 30 PPP and EIDL applications on behalf of actual and fabricated businesses associated with herself and her husband, Joshua Pennington. All of these applications contained material falsehoods, and Nicole Pennington supported them with fraudulent tax returns, financial statements, and other records. Six of the loan applications were approved for a total of $1,090,398.35 in fraudulently obtained SBA loan proceeds.

After receiving the loan proceeds, Nicole Pennington and her co-defendant, Joshua Pennington, laundered more than $1,000,000 in criminally derived funds by engaging in a series of transactions in amounts of $10,000 or more. Specifically, 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 was previously sentenced to 22 months in prison for his role in the money laundering conspiracy.

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

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

The investigation was conducted by the IRS-CI and the Treasury Inspector General for Tax Administration. Assistant U.S. Attorney Andy Smith prosecuted the sentencing on behalf of the United States.

The Fraud Section leads the Department of Justice Criminal Division's prosecution of fraud schemes that exploit the PPP. Since the enactment of the CARES Act, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases and has seized over $78 million in cash proceeds derived from fraudulently obtained PPP funds, as well as numerous real estate properties and luxury items purchased with such proceeds.

IRS-CI is the law enforcement arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money laundering, public corruption, healthcare fraud, identity theft and more. It is the only federal law enforcement agency with investigative jurisdiction over violations of the Internal Revenue Code. IRS-CI has 18 field offices located across the U.S. and maintains an international presence through attaché posts abroad.