He lied to get $9 million in coronavirus loans — then went gambling in Vegas, feds say
A Los Angeles man lied to get about $9 million in Paycheck Protection Program loans then took a trip to Las Vegas and spent hundreds of thousands gambling, according to the U.S. Attorney’s Office in the Central District of California.
Andrew Marnell, 40, was arrested Friday morning after a criminal complaint charged him with bank fraud, a news release from the U.S. Attorney’s Office said. Marnell made several misleading or false statements on PPP applications about operations costs and payroll expenses, according to the release.
Marnell used a number of aliases to submit fake and altered documents such as federal tax filings and employee payroll records, the release said. His application was approved for $8 million, but prosecutors said during Marnell’s court hearing that he actually received about $9 million in loans and they believe there might be more, according to the release.
After receiving the money, Marnell transferred millions of dollars to his brokerage accounts to “make risky stock market bets,” the release said. He also spent hundreds of thousands of dollars at the Bellagio Hotel and Casino and other gambling establishments in Las Vegas as recently as last weekend, according to the release.
Congress created the PPP as part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, the release said. It originally authorized $349 billion in forgivable loans to be distributed to small businesses, then Congress authorized another $300 billion in additional funding in April, according to the release.
The PPP allowed small businesses to apply for loans with a maturity of two years and an interest rate of 1%, which could be forgiven if businesses spend the money on payroll costs, interest on mortgages, rent and utilities, the release said.
This isn’t the first case of PPP-related fraud.
Ganell Tubbs, 41, was arrested on fraud charges this week by the U.S. Attorney’s Office in the Eastern District of Arkansas, according to a news release from the agency. She allegedly submitted a PPP application for two businesses: The Little Piglet Soap Company, LLC and Suga Girl Customs, LLC, the release said.
The Arkansas Secretary of State said neither business was in good standing, and both listed Tubbs’ home address and personal phone number as the business contact information, according to the release. Tubbs claimed to have paid over $1.3 million in wages and compensation for Suga Girl Customs during the first quarter of 2020 on an application submitted in late April, according to the release.
Her application was approved, and she received over $1.5 million in loans in early May, according to the release. She spent $8,000 on her student loans and about $6,000 online shopping at Apple, Michael Kors, Sephora, The North Face, Nike and other retailers, according to the release.
Another case involved David A. Staveley, 52, of Massachusetts, and David Butziger, 51, of Rhode Island, who claimed to have “dozens of employees” at four businesses that qualified for loans under the Paycheck Protection Program, prosecutors said in a U.S. Department of Justice news release.
Prosecutors said Staveley sought $438,500 to help cover the cost of employees at three restaurants he purportedly owned in Rhode Island and Massachusetts — two of which investigators found weren’t open before the pandemic, when the loan application was sent “or at any time thereafter.” None of the businesses had any employees and one didn’t even belong to them, the release said.
This story was originally published July 17, 2020 at 5:19 PM with the headline "He lied to get $9 million in coronavirus loans — then went gambling in Vegas, feds say."