The U.S. District Attorney’s Office for Rhode Island has prosecuted and sentenced the first person charged with fraudulently applying for and receiving COVID relief business loans. David Adler Staveley was sentenced to 56 months in federal prison by US District Court Judge Mary S. McElroy. Staveley will follow sentence with a 3 year federal release.
Fraudsters will be convicted
According to the US Department of Justice, Massachusetts’s David Staveley and Rhode Island’s David Butziger submitted four fraudulent PPP loan applications. The DOJ says the two falsely claimed they owned companies with large monthly payrolls. In fact, they didn’t even own the stores.
The DOJ announced that Staveley had admitted that he and Butziger had made fraudulent claims for four companies demanding $ 543,778. These include $ 185,570 at the Top of the Bay restaurant in Warwick, RI; $ 144,050 at the Remington House Inn restaurant in Warwick, RI; $ 108,777 at the On The Trax restaurant in Berlin, MA; and $ 105,381 Dock Wireless, an unincorporated company.
The DOJ states that Staveley had no interest in Top of the Bay, Remington House Inn, or On The Trax. In fact, these businesses were closed when the loan applications were made. Dock Wireless had no employees and the company never paid any wages. But the capers are not over yet.
After being released into house arrest with electronic surveillance, Staveley removed it, staged his own suicide, and went on his way. The DOJ says he left suicide notes with several people, as well as his wallet by the ocean in Massachusetts. Staveley was later arrested by the United States Marshals Service in Alpharetta, GA., On July 23, 2020.
Butziger is due to be sentenced on November 1, 2021.
PPP loan fraud
When the PPP was first announced, it was a welcome relief for many small businesses struggling to make ends meet. And the program has helped millions of small businesses by providing funding to keep their businesses going.
However, the lure of easy money was too great for many unscrupulous scammers who took money away for people who really needed it. The criminal PPP fraud company was responsible for fraud of more than $ 341,000,000 in January 2021.
While Staveley’s conviction is the first, it won’t be the last as the DOJ has charged hundreds of criminals with pandemic loan fraud.