The Accused Misappropriated Funds, Faces Lengthy Incarceration
By Dolores Quintana
Andrew Marnell, a resident of West Los Angeles, has been sentenced to 79 months in federal prison for orchestrating a scheme to fraudulently obtain approximately $9 million in COVID-19 business loans. The loans, intended to aid businesses impacted by the pandemic, were obtained under the Paycheck Protection Program (PPP) and the Economic Injury Disaster Loan Program (EIDL). Marnell, 43, used a portion of the funds for gambling trips to Las Vegas and transferred some to his stock trading accounts.
United States District Judge R. Gary Klausner imposed the sentence and scheduled a restitution hearing for August 28. Marnell had previously pleaded guilty in September 2021 to one count of bank fraud and one count of money laundering.
Between March and July 2020, Marnell engaged in a fraudulent scheme by submitting falsified loan applications to lenders and the Small Business Administration (SBA). These applications contained misleading information about his shell companies’ operations and payroll expenses. Using aliases, Marnell submitted fabricated and altered documents, including false federal tax filings and employee payroll records, to secure the small business loans.
Marnell successfully obtained over $10 million in PPP loans, with lenders funding nearly $9 million to his fictitious companies. He also requested EIDL loans from the SBA, receiving $170,000 out of the $320,000 requested.
Once the fraudulent loans were obtained, Marnell misappropriated the funds for gambling activities in Las Vegas, stock market trades, and luxury purchases. As part of his plea agreement, he agreed to forfeit his ill-gotten gains, including Rolex watches, multiple electronic devices, a Range Rover, a Ducati motorcycle, and substantial cash. The government also seized over $1.5 million from Marnell-controlled accounts associated with stock market trading.
Prosecutors argued that Marnell’s actions demonstrated a callous disregard for the emergency assistance and relief programs established to support those affected by the pandemic. They highlighted that he was among the first individuals arrested in the district for pandemic-related fraud.
Several agencies, including the Federal Housing Finance Agency Office of Inspector General, the FBI, the Federal Deposit Insurance Corporation Office of Inspector General, the IRS Criminal Investigation, the Treasury Inspector General for Tax Administration, and the Small Business Administration Office of Inspector General, conducted the investigation. The California Department of Justice Bureau of Gambling Control provided assistance during the investigation.
Assistant United States Attorney Kerry L. Quinn of the Major Frauds Section handled the prosecution of this case.
Individuals with information regarding COVID-19-related fraud can report it by contacting the Department of Justice’s National Center for Disaster Fraud Hotline at (866) 720-5721 or submitting a complaint through the NCDF Web Complaint For.
