Pennsylvania Man Pleads Guilty in COVID-19 Pandemic Loan Scheme

Summary

The U.S. Attorney's Office for the Northern District of Iowa reported on June 18, 2024 that Alhaji Kundu Aly, 35, of Chester, Pennsylvania, pled guilty on June 14, 2024 in federal court in Cedar Rapids to one count of wire fraud. In the plea agreement Aly admitted that Aly and others recruited and assisted people to apply, for a fee, for PPP loans they did not qualify for, supported by false documents, and then demanded a portion of the money; the release says Aly traveled to Iowa and demanded payment in person from one applicant. Aly admitted responsibility for no less than $250,000 in loss based on no less than 21 fraudulent PPP loans. Aly faces up to 20 years' imprisonment, a $250,000 fine and three years of supervised release; the case file number is 23-CR-9.

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Press Release

Pennsylvania Man Pleads Guilty in COVID-19 Pandemic Loan Scheme

Tuesday, June 18, 2024

For Immediate Release

U.S. Attorney's Office, Northern District of Iowa

Responsible for At Least 21 Fraudulent Loans Worth More than $250,000

A Pennsylvania man who organized a scheme to defraud the government out of COVID-19 pandemic loan moneys pled guilty on June 14, 2024, in federal court in Cedar Rapids, Iowa. Alhaji Kundu Aly, age 35, from Chester, Pennsylvania, was convicted of one count of wire fraud.

In a plea agreement, Aly admitted that 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 in his plea agreement that he is responsible for no less than $250,000 in loss based on no less than 21 fraudulent PPP loans as a result of the scheme to defraud.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the Department’s response to the pandemic, please visit https://www.justice.gov/coronavirus .

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice's National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form .

Sentencing before United States District Court Chief Judge C.J. Williams will be set after a presentence report is prepared. Aly remains free on bond previously set pending sentencing. Aly faces a possible maximum sentence of 20 years’ imprisonment, a $250,000 fine, and three years of supervised release following any imprisonment.

The case is being 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.

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

The case file number is 23-CR-9.

Updated June 18, 2024

Topics

COVID-Related Fraud

Financial Fraud

Component

USAO - Iowa, Northern

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