LA man charged with receiving $8 million in COVID-19 scam
A Los Angeles man was arrested today and charged with fraudulently seeking more than $8 million in Paycheck Protection Program loans.
Andrew Marnell, 40, was taken into custody Thursday and charged in Los Angeles federal court by criminal complaint, unsealed upon his arrest, with one count of bank fraud, according to the U.S. Attorney’s Office.
The complaint alleges that Marnell obtained $8.5 million in PPP loans through applications to insured financial institutions and others on behalf of different companies. According to prosecutors, Marnell caused the submission of fraudulent loan applications that made numerous false and misleading statements about the companies’ respective business operations and payroll expenses.
Marnell allegedly submitted fake and altered documents, including fake federal tax filings and employee payroll records. Federal prosecutors contend that the loan applications were made by using false and fraudulent identifications that were aliases of Marnell.
He then transferred the fraudulently-obtained loan proceeds to his brokerage account to make risky stock-market bets and spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at a Las Vegas casino, prosecutors allege.
The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1%. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities. The program allows the interest and principal to be forgiven if businesses spend the proceeds on these expenses within a set time period and use at least a certain percentage of the loan towards payroll expenses.