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Andrew Marnel, 40, was arrested on Thursday morning and appeared in court later that afternoon. Charges filed against him allege that he submitted fraudulent loan applications for numerous companies, obtaining between $8-9 million in PPP loans as given by the CARES Act, the California DOJ announced in a statement.
That number could rise as the investigation continues.
Surveillance photo shows the suspect gambling, supposedly with fraudulently obtained funds (US Attorney Central District California/FBI)
The applications made a number of false and misleading statements about business operations and payroll expenses, helping Marnel to inflate the amount of the loans. The court affidavit also alleged that Marnel accomplished using a number of aliases and altered documents, including bogus tax filings and employee payroll records.
He used the money, via his brokerage account, to make high-risk stock market bets, and also spent hundreds of thousands of dollars at the Bellagio Hotel and Casino in Las Vegas and other gambling establishments as recently as the weekend of July 11.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was designed to provide emergency financial assistance to millions of Americans who are suffering the economic effects resulting from the COVID-19 pandemic. One source of relief provided by the CARES Act is the authorization of up to $349 billion in forgivable loans to small businesses for job retention and certain other expenses through the PPP.
The case has prompted investigations by a number of federal agencies, including the Federal Housing Finance Agency, the FBI, the Federal Deposit Insurance Corporation, IRS Criminal Investigation, the Treasury Inspector General for Tax Administration and the Small Business Administration Office of Inspector General.
The California DOJ – Bureau of Gambling Control is providing assistance.