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The First

Senior Director of Strategic Alliances
LexisNexis Risk Solutions - Government

“First things first.” “Seek first to understand.” “Put yourself first.” “First in first out.” So many mantras about being first. And now there is a new one. “First in with a fraudulent Paycheck Protection Program application, first one arrested.” Or at least, that’s the mantra that Andrew Marnell lives by. In March 2020, Marnell was one of the first to send in a PPP application. Subsequently, he was one of the first to be arrested for fraudulently obtaining millions in COVID-19 business loans. And on July 10, 2023, Marnell was sentenced to six years in federal prison.

As soon as the federal government declared a national emergency and took action to respond to the COVID-19 pandemic, Marnell jumped into fraud mode. Marnell’s bogus loan applications contained numerous false and misleading statements about his shell companies’ business operations and payroll expenses. Marnell, often using aliases, submitted fake and altered documents to obtain the small business loans, including bogus federal tax filings and employee payroll records. In total, Marnell submitted applications for PPP loans in amounts exceeding $10 million and lenders funded nearly $9 million in loans to his fake companies. In addition, Marnell requested EIDL loans from the SBA in the amount of $320,000, and of that amount, $170,000 was funded.

Once Marnell obtained the illicitly obtained loans, he used the money for gambling, including at a Las Vegas casino and in stock market trades, and for purchasing luxury goods. As part of his plea agreement with federal prosecutors, Marnell agreed to forfeit his ill-gotten gains, including Rolex watches, multiple laptop computers and tablets, a Range Rover automobile, a Ducati motorcycle, and hundreds of thousands of dollars in cash. The government also seized more than $1.5 million from various Marnell-controlled accounts, including those used to trade in the stock market.

Shout out to the Small Business Administration Office of Inspector General with this investigation. Marnell could have been second or third with his application. SBA investigators would have still caught him.
Today’s Fraud of The Day is based on article “L.A. man sentenced for using illegally obtained COVID-19 loans to fund gambling trips, expensive purchases” published by KTLA News on July 10, 2023
A man from West Los Angeles has been sentenced to more than six years in federal prison for fraudulently obtaining millions in COVID-19 business loans, which he used on extravagant purchases and gambling trips to Las Vegas.

Andrew Marnell, 43, was sentenced to prison Monday after pleading guilty in September 2021 to one count of bank fraud and one count of money laundering. Marnell applied for loans through two federal programs, including the Paycheck Protection Program, which was created by congress to help businesses that were struggling financially due to the coronavirus pandemic.

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