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Alastair Gesmundo

Oversight and enforcement

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The profile

DOJ attorney credited on the Kabbage bankruptcy proceeding tied to the PPP False Claims Act resolution.

Identity and role

Alastair M. Gesmundo is a trial attorney in the Commercial Litigation Branch of the Justice Department's Civil Division in Washington. He represented the United States in the Chapter 11 case of Kabbage, Inc. d/b/a KServicing (Bankr. D. Del. No. 22-10951), the bankruptcy through which the government's PPP False Claims Act claims against the lender were resolved. The U.S. Attorney's Office in Boston credited him, with Stanton McManus and Shane Huang of the branch's Corporate/Financial Litigation Section, for that bankruptcy work when it announced the Kabbage settlement on May 13, 2024.

Biography / career arc

Our records on Gesmundo are the Kabbage bankruptcy filings and the May 2024 press release. In his October 5, 2022 notice of appearance he certified that he is a member in good standing of the State Bar of California. The records say nothing else about his career.

Pandemic-relief / PPP-EIDL role

Kabbage was a fintech PPP lender. Its October 4, 2022 first-day declaration says it sold substantially all of its assets to affiliates of American Express in October 2020 and was winding down as a loan servicer. It filed for Chapter 11 in Delaware on October 3, 2022. On the petition's list of the 30 largest unsecured claims, the Justice Department's Civil Division appears fourth, as a "Litigation" claim of undetermined amount. The contacts listed are Gesmundo, Sarah Loucks of the Fraud Section, Assistant U.S. Attorney Brian LaMacchia in Massachusetts, and Assistant U.S. Attorney Betty Young in the Eastern District of Texas.

Gesmundo entered his appearance for the United States on October 5, 2022. He is listed as appearing for the United States at the November 29, 2022 status conference, and he signed two stipulations with the debtors extending the government's deadline to file a complaint challenging the dischargeability of Kabbage's debts. The first, dated January 6, 2023, moved the deadline from January 9 to May 9, 2023, and the court approved it. The second, dated May 8, 2023, extended it through August 7, 2023.

The May 13, 2024 resolution gave the United States an allowed general unsecured claim in the bankruptcy of up to $120 million, split between two settlements: up to $63.2 million over allegations that Kabbage systemically inflated loans and up to $56.7 million over allegations that it ran inadequate fraud controls. The government's recovery depends on the assets left in the estate for unsecured creditors.

Their own relief

Neither the SBA's public PPP loan-level data (September 30, 2024 release) nor the USAspending COVID-EIDL award files we searched list a loan to a borrower named Alastair Gesmundo.

Gesmundo is counsel for the United States, not a party. The allegations in the Kabbage matters are against Kabbage and, in a separate Texas case the United States joined in December 2024, against former executives Robert Frohwein, Kathryn Petralia and Spencer Robinson. In the settlement, KServicing Wind Down Corp. admitted Kabbage's payroll-calculation errors; the fraud-control claims remain allegations.

Where they are now (2025–2026)

The May 13, 2024 press release is our latest record of Gesmundo; it describes him as a trial attorney in the Civil Division's Corporate/Financial Litigation Section. We have no later record of his position.

Sources held in this archive

  • Who Got Paid
  • When the Guaranty Fee Ran Backwards

Sources

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