PROVIDENCE, R.I. (AP) — Two businessmen have been charged with fraudulently seeking more than a half-million dollars in forgivable loans designed for businesses struggling because of the coronavirus pandemic, federal authorities said Tuesday.
They are the first people in the U.S. to be charged with making phony applications for loans under the Paycheck Protection Program, officials said.
David A. Staveley, who also goes by Kurt Sanborn, of Andover, Massachusetts, and David Butziger of Warwick, Rhode Island, are accused of claiming they needed to pay employees at businesses affected by the virus crisis, when in reality their businesses were not operating before the pandemic began and had no employees on the payroll.
“Tens of millions of Americans have lost their jobs and have had their lives thrown into chaos because of the coronavirus pandemic,” Rhode Island U.S. Attorney Aaron Weisman said in an emailed statement. “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.”
It wasn’t immediately clear whether Staveley or Butziger have attorneys. They are charged with conspiracy to make false statement to influence the Small Business Administration and conspiracy to commit bank fraud. Staveley is also charged with aggravated identity theft and Butziger is charged with bank fraud.
Authorities say Staveley sought nearly $440,000 in loans claiming that he needed to pay dozens of employees at three restaurants he owned. However, two of the restaurants weren’t open before the pandemic began and he didn’t have any connection to the third restaurant he claimed to have owned, authorities said.
Meanwhile, Butziger sought more than $100,000 claiming he had seven full-time employees to pay at a business he owned called Dock Wireless, authorities said. The state of Rhode Island has no record of Butziger paying employees this year and several supposed employees interviewed by agents said they never worked for him or Dock Wireless, authorities said.