A Beverly Grove man pleaded guilty Tuesday in a scheme to fraudulently obtain about $9 million in loans from COVID-19 relief programs — some of which he used to gamble in Las Vegas, federal officials said.
Andrew Marnell, 41, pleaded guilty to one count of bank fraud and one count of money laundering, according to the U.S. Attorney’s Office in the Central District of California.
The man used a series of corporations he controlled to fraudulently apply for Payroll Protection Program loans meant to help small businesses during the pandemic, according to authorities.
On the applications, he made numerous false and misleading statements about the companies’ business operations and payroll expenses, and submitted fake and altered documents, including bogus federal tax filings and employee payroll records, officials said.
He ended up getting seven loans, bringing him just under $9 million.
Once he got the money, Marnell transferred millions of dollars to his brokerage accounts “to make risky stock market bets,” according to court documents. Officials said he also spent hundreds of thousands of dollars while gambling.
As part of the plea agreement, Marnell had to forfeit more than $1.54 million seized from several brokerage accounts, more than $319,000 in cash found at his home, numerous electronic devices, a Rolex Oyster watch, a Range Rover and a Ducati motorcycle.
He also agreed to pay restitution to the lenders to compensate the losses — an amount believed to be more than $7 million, officials said.
Officials said Marnell also admitted that he fraudulently obtained $170,000 in Economic Injury Disaster Loan Program loans.
Marnell, who has been in custody since his arrest in July 2020, will face a statutory maximum sentence of 40 years in federal prison. His sentencing is scheduled for Feb. 14, 2022.
The PPP program was implemented by the CARES Act last year to help businesses affected by the coronavirus pandemic.
Since then, there have been numerous reports of people fraudulently obtaining the loans — including a case involving Tarzana couple that officials say fled ahead of their sentencing after being convicted of $21-million COVID-19 relief fraud.
Anyone with information about fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud Hotline at 866-720-5721, or by using the online complaint form.