CALIFORNIA — Andrew Marnell, 40, was arrested on Thursday, July 16, on charges of fraudulently obtaining millions of dollars in Paycheck Protection Program (PPP) loans, according to the U.S. Attorney’s Office.
Marnell, a resident of the Beverly Grove neighborhood in Los Angeles, made his initial court appearance in the United States District Court in Los Angeles and was detained “pending a hearing on Tuesday.”
He has been charged with one count of bank fraud. Marnell allegedly obtained more than $8 million in PPP loans “through applications to insured financial institutions, and others, on behalf of different companies,” according to a criminal complaint.
Marnell allegedly submitted loan applications with false and misleading information about the companies’ business operations and payroll expenses, according to prosecutors. The complaint’s affidavit also alleges that Marnell used aliases to submit “fake and altered documents, including bogus federal tax filings and employee payroll records.”
He allegedly transferred millions obtained from the loans “to his brokerage accounts to make risky stock market bets,” as well as spending the money gambling at the Bellagio Hotel & Casino in Las Vegas.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent. Congress has authorized up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.
That money comes from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, “designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic.” President Donald Trump signed the relief measure on March 27.
Several federal agencies, including the FBI and the California Department of Justice, are investigating the case.
Prosecutors said the $9 million allegedly stolen by Marnell could “rise as the investigation continues.” He faces a statutory maximum sentence of 30 years in federal prison if convicted as charged.
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 Hotline at 866-720-5721 or via the NCDF Web Complaint Form.