You can do the formatting using a table for alignment of the labels, manual spacing for indentation and manual typesetting of each word (paying attention to spacing).

 & \mathit{stringlen} \leftarrow \text{length of } \mathit{string}. \\
 & \mathit{i} \leftarrow \mathit{patlen}. \\
 \mathit{top}: & \text{if } \mathit{i} \gt \mathit{stringlen} \text{ then return false}. \\
… \\
 & \text{if } \mathit{string}(\mathit{i}) = \mathit{pat}(\mathit{i}) \\
 & \quad \text{then} \\
… \\

But this is painful for many reasons. The source is hard to read and edit. The rendering of such large blocks of MathJax is slow in some browsers. I hate to think what this would sound like on a screen reader. And I don't think your sample output is particularly pretty anyway.

I would use the native text markup. It's perfectly suitable for a nested structure.

* Let $\mathit{stringlen} = \mathrm{length}(\mathit{string})$
* Set $i = \mathit{patlen}$
* While $i \lt \mathit{stringlen}$:
    * Set $j = \mathit{patlen}$
    * While $j \lt 0$:
        * …
* Return false.

This is easier to do with structured code than with goto. But you shouldn't be using goto when loops would do anyway.

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