LOS ANGELES – A West Los Angeles man has pleaded guilty to federal charges stemming from a scheme that used a series of corporations he controlled to fraudulently obtain approximately $9 million in loans from COVID-relief programs, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts, the U.S. Department of Justice reported.
Andrew Marnell, 41, pleaded guilty to one count of bank fraud and one count of money laundering.
According to the DoJ, Marnell admitted that he fraudulently obtained Paycheck Protection Program (PPP) loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Marnell obtained seven PPP loans from financial institutions for corporations he controlled that brought him just under $9 million.
Marnell submitted fraudulent loan applications that made numerous false and misleading statements about the companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents, including bogus federal tax filings and employee payroll records, DoJ stated.
Funds Transferred
Once the loans were funded, Marnell transferred millions of dollars from the fraudulently obtained loan proceeds to his brokerage accounts to make risky stock market bets, according to court documents, which note that Marnell spent hundreds of thousands of dollars in fraudulently obtained loan proceeds at various gambling establishments.
As part of the plea agreement, Marnell agreed to forfeit items related to the pilfered PPP loan funds, including more than $1.54 million seized from several brokerage accounts, $319,298 in cash recovered from his residence, numerous electronic devices, a Rolex Oyster watch, a Range Rover and a Ducati motorcycle, DoJ said.
As a result of his guilty pleas, Marnell will face a statutory maximum sentence of 40 years in federal prison when he is sentenced by United States District Judge R. Gary Klausner on Feb. 14, 2022. In addition to any prison sentence he receives, Marnell has agreed to pay restitution to the victim lenders to compensate the losses this case, an amount believed to be $7,341,376.