A California man was charged after spending the Paycheck Protection Program (PPP) loan worth $8.5 million in stock market and casino. The man allegedly scammed the program intended for small businesses.  

PPP Loan
(Photo : Pexels)

PPP loan is part of the CARES Act signed into law by President Donald Trump during the coronavirus outbreak in the country. It aims to help entrepreneurs to revive their small businesses, hire back their employees, and to cover current payroll costs, among others. 

But instead of using the PPP loan to revive his small business, a prosecutor on Thursday said a man spent the PPP loan or the federal stimulus program worth $8.5 million in stock market and a casino in Las Vegas. 

In a news release, the Department of Justice identified the man, who scammed the program, as Andrew Marnell, 40, residing in Los Angeles, California. He was alleged of obtaining the PPP loan on behalf of multiple companies. 

Investigators also accused Marnell of making false and misleading applications, when he applied for the federal program. Investigators said the suspect submitted fake and altered tax and payroll documents to support his application.

The Department of Justice noted that when Marnell got the PPP loan he transferred it to his brokerage account and started investing and playing in the stock market. He was also alleged of spending hundreds of thousands in a casino. 

Meanwhile, a 29-year-old Texas man was also arrested on Tuesday after he allegedly filed a PPP loan application on behalf of a pair of businesses that did not exist and had no employees, according to a published article in Fox News.

Last week, a Florida man was caught scamming the Medicare and the PPP loan and he was able to get $5 million. The Florida man filed false claims for orthopedic braces that patients neither wanted nor received. It can also be remembered that back in June, a man from Detroit bought expensive cars such as two Cadillacs, a Dodge Charger, and a Hummer using the illegally obtained PPP loan.

These are just a few of the fraudulent activities that occurred since the PPP began under the CARES Act. Many took advantage of it and filed PPP loan then used it on how it is not designed for and how it should be spent.

The PPP loans are meant to help business support their payroll, rent, mortgages, and other provisions stated in the program. Typically, this is only intended for small businesses with 10 or fewer employees. Borrowers under the PPP can also qualify for partial loan forgiveness if less than 60 percent of the loan is used for payroll.

The U.S. Department of Justice has been aggressive in prosecuting people, who took advantage of the program. The money is supposed to alleviate small businesses in the country but many falsely filed applications.

U.S. Attorney Matthew Schneider stressed that to defraud banks to obtain loans is not acceptable and will never be accepted. He also added that doing it in the time of economic fall-out and the global pandemic is unconscionable.

The Latin Post reported in the previous days that big companies were able to obtain the PPP loan. Shake Shack Chairman returned an amount of $10 million earlier this year after they received capital from a different source. 

In an open letter, they wrote that applying for the PPP loan or the federal program that aims to help small businesses is broad enough that it allows big businesses like theirs to access the money intended for small business owners.

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