Two men were charged in Rhode Island with fraudulently seeking more than a half-million dollars in stimulus loans created as part of federal coronavirus protections.
David A. Staveley, 53, and David Butziger, 51, are the first in the nation to be charged with stimulus fraud involving the Small Business Administration's Paycheck Protection Program, according to the U.S. Attorney’s Office for the District of Rhode Island. The two men allegedly conspired to obtain loans from the SBA 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 Tuesday.
“It is unconscionable that anyone would attempt to steal from a program intended to help hard working Americans continue to be paid so they can feed their families and pay some of their bills,” Weisman said.
Staveley and Butziger allegedly spoke through email about creating fraudulent loan applications. Staveley's application allegedly stated 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 prior to the pandemic and were not in business at the time of his loan application or after. Staveley's did not own or have any stake in the third restaurant he included in the application, according to the district court.
Staveley’s Massachusetts restaurant was shut down in March after the town revoked the business’ liquor license for numerous reasons, according to court documents, including a misrepresentation that his brother owned the restaurant.
Butziger allegedly filed an application in April for $105,381 as owner of a Dock Wireless entity, according to the district court. He allegedly lied to an undercover FBI agent posing as a bank officer when he said he brought on seven employees in January and then laid them off at the end of March.
The Rhode Island State Department of Revenue had no record employee wages having been paid in 2020 by Butziger or the business, according to the court. The supposed employees listed by Butziger told FBI agents 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 additionally charged with aggravated identity theft.
Court filings for the men were not immediately available on Tuesday and it is unclear whether they have retained attorneys. The U.S. Attorney's Office for the District of Rhode Island did not immediately respond to a request for more information from NBC News.
