LAS VEGAS (FOX5) -- A California man charged in an $8.5 million COVID-19-relief fraud scheme took "hundreds of thousands of dollars" and spent it at Las Vegas casinos, according to a release from the Justice Department.
In the complaint, Andrew Marnell, 40, allegedly obtained about $8.5 million in Paycheck Protection Program (PPP) loans by way of applications submitted on behalf of insured financial institutions and various companies, the release stated.
Acting Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division and U.S. Attorney Nicola T. Hanna of the Central District of California oversaw the case. The attorneys said Marnell falsified claims related to business payroll expenses and business operations, including fake federal tax filings. Evidence within the case indicated fake IDs were also used with aliases tied to Marnell.
Additionally, the complaint alleges Marnell transferred the funds to a brokerage account, placing bets through the stock-market, whilst gambling away other funds inside a Las Vegas casino, the release said.
The Coronavirus Aid, Relief, and Economic Security, or CARES Act, was enacted March 29 and created to provide emergency help for Americans burdened by the financial devastation of the COVID-19 pandemic. Moreover, the act has allowed the authorization of billions of dollars in forgivable loans to small businesses in order to retain jobs through PPP.
"The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of one percent. Businesses must use PPP loan proceeds for payroll costs, interest on mortgages, rent and utilities," the release stated.
If businesses correctly utilize proceeds on the aforementioned expenses, the interest and principal on the loan are forgiven, under PPP.
The Federal Housing Finance Agency is investigating the case, along with the IRS, FBI and other federally regulated agencies.
A criminal complaint is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Marnell faces one count of bank fraud.