California Man Bilks Government Out of $8.5 Million in PPP Funds, Spends Some at Bellagio, Other Casinos

Posted on: July 17, 2020, 09:17h. 

Last updated on: July 17, 2020, 11:16h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Andrew Marnell of Los Angeles was charged Thursday by federal prosecutors with fraudulently obtaining $8.5 million in Paycheck Protection Program (PPP) loans and allegedly spending some of that cash at the Bellagio and other Las Vegas casinos.

Andrew Marnell Charge With Fraud
Seen here at an unidentified Las Vegas casino, Andrew Marnell is accused of fraudulently taking millions in PPP loans. (Image: US Attorney Central District California/FB)

Marnell, 40, a resident of the tony Beverly Grove area, is being charged in the Central District of California with one count of bank fraud.

The complaint alleges that Marnell obtained approximately $8.5 million in PPP loans through applications to insured financial institutions and others on behalf of different companies,” said the US Department of Justice (DOJ) in a statement.

DOJ’s complaint goes on to assert that Marnell, upon receiving the ill-gotten PPP cash, transferred some of that money into a brokerage account to make “risky” stock market bets and that he “similarly spent hundreds of thousands of dollars” at a Las Vegas casino.

In a separate statement, the US Attorney’s Office for the Central District of California identified the gaming venue as the Bellagio while noting the accused spent some of the money at “other gambling establishments as recently as last weekend.” Those other properties weren’t identified by name.

Bellagio’s real estate is owned by private equity firm Blackstone Group (NYSE:BX) and the venue is operated by MGM Resorts International (NYSE:MGM).

Betting on Bogus Documents

DOJ’s complaint against Marnell says that in addition to the submission of false applications and numerous misleading statements about the financial state of the companies for which he was seeking loans, the accused relied on a slew of fake documents to obtain the PPP loans.

“The complaint also alleges that, in further support of the fraudulent loan applications, Marnell submitted fake and altered documents, including fake federal tax filings and employee payroll records,” said the Justice Department. “The complaint also alleges that these loan applications were made by using false and fraudulent identifications that were aliases of Marnell.”

Potentially compounding Marnell’s legal woes is that lawyers from the US Attorney’s Office said during a Thursday hearing that they believe he received closer to $9 million in PPP funds, adding that the figure could increase as the investigation moves forward.

Created as part of the Coronavirus Aid, Relief, and Economic Security (CARES) act, the PPP program delivered $649 billion to businesses to be used on payroll costs, interest on mortgages, rent, and utilities. Various gaming companies are among the legitimate recipients of PPP funds.

Who’s Who of Government Agencies Investigating

While DOJ is quick to note criminal complaints are merely allegations and not statements on the accused’s guilt or innocence, Marnell is being investigated by a cadre of government agencies — plenty of which normal folks look to steer clear of.

That roster includes 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.

The California Bureau of Gambling Control is also assisting.

If convicted, Marnell could face up to 30 years in prison.