Two Rhode Island men charged for attempting to defraud the paycheck protection program

Two men in Rhode Island have become the first in the nation to be charged in connection with defrauding the Paycheck Protection Program. The program is part of the multi-trillion-dollar CARES Act and intended to help small businesses continue to pay employees throughout the pandemic.

The two men, David Staveley and David Butziger, are accused of conspiring to seek forgivable Small Business Administration loans to pay dozens of employees across four different business ventures. However, none of the listed businesses, which include three restaurants, have any employees working for them, officials say.

Staveley and Butiger are charged with conspiracy to make false statements to influence the SBA and conspiracy to commit bank fraud. Staveley is also charged with aggravated identity theft.

“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 intended to help hard working Americans continue to be paid so they can feed their families and pay some of their bills,” said U.S. Attorney Aaron Weisman for the District of Rhode Island.

He continued, “Attorney General Barr has directed all U.S. Attorneys to prioritize the investigation and prosecution of crimes related to coronavirus and COVID-19, and we are doing just that.”

Staveley and Butziger conspired to collect more than half a million dollars in forgivable loans. Staveley applied for loans for dozens of employees at the New England restaurants. The investigation determined that two of the restaurants were not actually open for business prior to the pandemic, and that he did not have a role at the third one.

Butziger filed an application for more than $100,000 as the owner of an unincorporated entity called Dock Wireless. Butziger spoke with an undercover FBI agent posing as a bank compliance officer, telling him that he had seven full time employees on Dock Wireless’ payroll.

“Every dollar stolen from the Paycheck Protection Program comes at the expense of employees and small business owners who are working hard to make it through these difficult times,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. 

The investigation was a joint effort led by the Department of Justice, involving the help of the FBI, IRS, SBA Office of the Inspector General, and the FDIC