Two men have been charged in Rhode Island with fraudulently seeking more than half a million dollars in stimulus loans created under federal coronavirus protections.
David A. Staveley, 53, and David Butziger, 51, are the first in the country to be charged with stimulus fraud involving the Small Business Administration’s paycheck protection program, according to the United States Attorney’s Office for the District of Rhode Island. The two allegedly conspired to obtain SBA loans using false information.
The investigation into the men was part of a directive to prioritize crimes related to the coronavirus pandemic, U.S. Attorney Aaron L. Weisman said in a press release on Tuesday.
“It is unacceptable for anyone to attempt to steal a program designed to help hard-working Americans continue to be paid so that they can feed their families and pay part of their bills,” Weisman said.
Staveley and Butziger reportedly spoke via email about the creation of fraudulent loan applications. Staveley’s claim reportedly said he needed $ 438,500 to help pay dozens of workers at his restaurants in Warwick, Rhode Island, and one in Berlin, Massachusetts.
Prosecutors said at least two of the three restaurants were closed before the pandemic and were not in business at the time of his loan application or after. Staveley’s neither owned nor had an interest in the third restaurant it included in the claim, according to the district court.
Staveley’s Massachusetts restaurant was closed in March after the city revoked the company’s liquor license for a number of reasons, according to court documents, including a false claim that her brother owned the restaurant.
Butziger reportedly filed in April for $ 105,381 as the owner of a Dock Wireless entity, according to the district court. He allegedly lied to an undercover FBI agent posing as a bank agent when he said he hired seven employees in January and then fired them in late March.
The Rhode Island State Revenue Department had no record wages for employees paid in 2020 by Butziger or the company, according to the court. The alleged employees listed by Butziger told FBI agents that they had never worked for him either.
Butziger was charged in a criminal complaint with conspiracy to make false statements, bank fraud and conspiracy to commit bank fraud. Staveley was also charged with conspiracy to make false statements, conspiracy to commit bank fraud and aggravated identity theft.
Court records for the men were not immediately available on Tuesday and it is not clear whether they retained lawyers. The Rhode Island District Attorney’s Office did not immediately respond to a request for additional information from NBC News.