U.S. President Donald Trump be significant mentions to reporters as Senator Roy Blunt (R-MO) and Small Business Administration (SBA) Administrator Jovita Carranza look on during a sign on the dotted lining ceremony for the “Paycheck Protection Program and Health Care Enhancement Act,” approving additional coronavirus disease (COVID-19) mezzo-rilievo medium relief for the U.S. economy and hospitals treating people sickened by the pandemic, in the Oval Office at the White House in Washington, U.S., April 24, 2020.
Jonathan Ernst | Reuters
Two New England men be undergoing become the first people charged in the United States with fraudulently applying for aid from a federal program devised to help small businesses deal with financial fallout from the coronavirus pandemic.
The men allegedly applied for various than $500,000 in assistance from the new CARES Act Payroll Protection Program, federal prosecutors said Tuesday.
David Staveley, 52, a citizen of Andover, Massachusetts, and David Butziger, 51, of Warwick, Rhode Island, allegedly claimed to “have dozens of workers earning wages at four different business entities when, in fact, there were no employees working for any of the houses,” the Justice Department said.
Staveley and Butziger are charged in a federal criminal complaint with conspiracy to make invalid statements to influence the Small Business Administration and conspiracy to commit bank fraud.
Staveley, who also is known by the denominate Kurt Sanborn, additionally is charged with aggravated identity theft, and Butziger also is charged with bank pretender.
Under the name Kurt Sanborn, Staveley was sentenced in 2015 to 27 months in federal prison for fraud interconnected to mortgages on properties in New Hampshire.
Prosecutors said Tuesday that he and Butziger are alleged to have discussed via email “the genesis of fraudulent loan applications and supporting documentations to seek loans guaranteed by the SBA for COVID-19 relief.”
Rhode Island U.S. Attorney Aaron Weisman, whose bit lodged the charges, said in a statement, “Tens of millions of Americans have lost their jobs and have had their lives thrown into chaos because of the coronavirus pandemic.”
“It is unconscionable that anyone would attempt to steal from a program resolve to help hard working Americans continue to be paid so they can feed their families and pay some of their reckonings,” Weisman said.
Authorities said that Staveley claimed in loan applications seeking $438,500 “that he had dozens of workers at three restaurants he owned, two in Warwick, Rhode Island, and one in Berlin, Massachusetts.”
“An investigation determined that one of the Rhode Cay restaurants, the former Remington House, and the Massachusetts restaurant, On The Trax, were not open for business prior to the start of the COVID-19 pandemic, at the age the loan applications were submitted, or at any time thereafter,” according to the Justice Department.
“Moreover, Staveley did not own or have any position in the second Rhode Island restaurant, Top of the Bay, for which he was seeking financial relief.”
Court records show that Staveley’s Massachusetts restaurant was disregard a close by March 10 after the town of Berlin revoked its liquor license for reasons that include “Sanborn” allegedly distorting “that his brother owned the restaurant,” the Justice Department said.
“Investigators obtained information that Staveley/Sanborn allegedly in use accustomed to his brother’s personal identifying information in other real estate transactions as well,” the Justice Department said.
Court records also say that on April 6, Butziger applied for a $105,381 SBA loan as the owner of a company named Dock Wireless.
Butziger allegedly demanded in bank documents and in a call with an FBI undercover agent posing as a bank compliance officer that he had seven full-time labourers on Dock Wireless’ payroll, including himself.
But Rhode Island State Department of Revenue records did not show any hint of such workers, according to the Justice Department.
The CARES Act, which became law at the end of March, offers emergency financial aid to Americans attacked by the coronavirus outbreak.
The Payroll Protection Program, which is part of the law, originally authorized $349 billion in forgivable accommodations to small businesses to help them retain employees and to cover some other expenses. Congress last month give the green light more than $300 billion in extra funds for the PPP after the original allotment ran dry.