On July 13th, 2023

Los Angeles Man Sentenced for Illicitly Obtaining Nearly $9 Million in COVID Loans The California Department of Justice Bureau of Gambling Control provided assistance in the investigation.

“It is beyond appalling the lengths that fraudsters went to in stealing government assistance during the pandemic, but now, three years following the start of the pandemic, investigators are finding these individuals, prosecutors are presenting their cases to juries and judges, and judges are imposing sentences on the guilty.  This work will continue in an effort to identify those who committed these crimes.” – CSLEA President Alan Barcelona

LOS ANGELES – On July 10, 2023, Andrew Marnell, 43, of West Los Angeles, was sentenced to 79 months in federal prison for fraudulently obtaining approximately $9 million in COVID-19 business loans, some of which he used on gambling excursions to Las Vegas and transferred to his stock trading accounts.

A restitution hearing is scheduled for August 28.

Marnell pleaded guilty in September 2021 to one count of bank fraud and one count of money laundering.

From March 2020 to July 2020, Marnell schemed to defraud lenders and the Small Business Administration (SBA) by submitting fraudulent loan applications under the Paycheck Protection Program (PPP), which Congress designed to aid businesses feeling the economic impact of the COVID-19 pandemic, and another SBA loan program called the Economic Injury Disaster Loan Program (EIDL).

Marnell’s bogus loan applications contained numerous false and misleading statements about his shell companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents to obtain the small business loans, including bogus federal tax filings and employee payroll records.

In total, Marnell submitted applications for PPP loans in amounts exceeding $10 million and lenders funded nearly $9 million in loans to his fake companies. In addition, Marnell requested EIDL loans from the SBA in the amount of $320,000, and of that amount, $170,000 was funded.

Once Marnell obtained the illicitly obtained loans, he used the money for gambling, including at a Las Vegas casino and in stock market trades, and for purchasing luxury goods. As part of his plea agreement with federal prosecutors, Marnell agreed to forfeit his ill-gotten gains, including Rolex watches, multiple laptop computers and tablets, a Range Rover automobile, a Ducati motorcycle, and hundreds of thousands of dollars in cash. The government also seized more than $1.5 million from various Marnell-controlled accounts, including those used to trade in the stock market.

“As soon as the federal government declared a national emergency and took action to respond to the COVID-19 pandemic, [Marnell] started scheming to steal relief funds intended to save small businesses from going bankrupt and millions of individuals from losing their jobs,” prosecutors argued in a sentencing memorandum. “[Marnell] was one of the first people arrested in this district for pandemic-related fraud, and thus he was one of the first out of the proverbial gate to start defrauding programs designed to provide emergency assistance and relief to those impacted by the pandemic, including owners of small businesses.”

The Federal Housing Finance Agency Office of Inspector General; the FBI; the Federal Deposit Insurance Corporation Office of Inspector General; IRS Criminal Investigation; the Treasury Inspector General for Tax Administration; and the Small Business Administration Office of Inspector General investigated this matter. The California Department of Justice Bureau of Gambling Control provided assistance in the investigation.

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