Man Charged in $8.5 Million PPP Scam Blew Cash in Casino and Stock Market

By - July 20, 2020
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A man from Los Angeles allegedly scammed a US government program intended to help small businesses weather the COVID-19 pandemic for millions of dollars. He allegedly blew more than $8 million at a Las Vegas casino and in risky investments.

Andrew Marnell, 40, allegedly obtained about $8.5 million in loans illegally from the Paycheck Protection Program on behalf of several corporations, according to the Department of Justice.

Federal investigators accuse him of making false and misleading statements on loan applications as well as submitting fake and altered payroll and tax documents to support his filing.

Started Playing the Stock Market Almost Immediately

When the accused fraudster got the money, the Department of Justice stated that he put it into his brokerage account and started to invest in the stock market. It is also alleged that he blew hundreds of thousands of dollars in a Vegas casino.

The PPP is a part of the Coronavirus Aid, Relief and Economic Security Act (CARES Act), which is part of the national COVID-19 stimulus intended to help Americans suffering financial difficulty because of the pandemic.

PPP loans are intended to aid businesses to handle payroll costs, rent, mortgage interest, and utilities. PPP loans can even be forgiven if a percentage of the money is used for payroll.

DOJ Is Going After PPP Fraudsters With a Vengeance

The Department of Justice has been going after people who are abusing the program, including three in the last week. There have been many cases reported in national news.

Texas

One is a 29-year-old man from Texas who was arrested last Tuesday for falsifying PPP applications for two businesses that had no workers.

John T. Argires from Houston was accused by federal agents of making false statements to a bank, bank fraud, wire fraud, and engaging in illegal financial transactions for asking for money for workers who did not exist.

After he got the money, it is alleged that Argires invested the scammed funds in a cryptocurrency account and put the rest in a bank account. Then he started to slowly withdraw it from several ATMs.

Federal prosecutors said the man filed two fake loan applications seeking over $1 million in forgivable loans for the companies Texas Barbecue and Houston Landscaping. During the application process, Argires claimed the companies have several employees and hundreds of thousands of dollars of payroll costs.

Massachusetts

A man in Massachusetts also has been charged with seeking $13 million in phony PPP loans. Elijah M. Buoi, 38, was indicted last Tuesday related to submitting fake applications for coronavirus relief through the PPP.

Buoi is president and CEO of an IT services company and was indicted on four counts of wire fraud and one count of making a false statement to a financial institution.

Federal authorities alleged between April and June, the alleged fraudster submitted PPP applications for more than $13 million through SBA-approved lenders. He allegedly misrepresented his payroll expenses and the number of employees. He also incorrectly swore that the US was the main residence for his workers.

He also submitted fake documents to support his request for PPP funds. The man eventually got more than $2 million in loans.

Washington, DC

Also, a 40-year-old man in Washington, DC was arrested after he submitted a gross income of almost $200,000 on his PPP application. But he only put $1 on his tax return to get the $1200 US government coronavirus stimulus payment.

Florida

Further, a man in Florida was arrested for scamming Medicare and PPP for at least $5 million after he filed fake claims for orthopedic braces that patients did not need.

Michigan

In June, the FBI busted a man in Detroit who bought two Cadillacs, a Hummer, and a Dodge Charger with PPP money.

According to US Attorney Matthew Schneider, scamming banks to get loans is always illegal, but doing so during this national emergency is especially outrageous.

The Small Business Administration reports that almost five million PPP loans have been approved by companies that were affected by the coronavirus, as of June 30. More than $521 million has been paid to companies, and some of that money has been returned already. At least 20% of small businesses received a PPP loan with amounts ranging from $350,000 to $1 million.

People who abuse the PPP system face grave consequences. For example,  one charge of wire fraud can result in 20 years in prison and a fine up to $250,000, or twice the gain or loss from the crime. The charge of making a false statement to a bank can net a 30-year prison sentence and a fine up to $250,000 or twice the gain or loss from the crime.

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