The Rhode Island District Attorney’s Office has successfully prosecuted and convicted the first person accused of 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 the sentence with 3 years of federal supervised release.
A fraudster is convicted
According to the US Department of Justice, David Staveley of Massachusetts and David Butziger of Rhode Island have filed four fraudulent PPP loan applications. The DOJ claims the couple falsely claimed they owned businesses with large monthly payrolls. In fact, they didn’t even own the businesses.
The DOJ revealed that Staveley admitted that he and Butziger filed fraudulent claims for four companies seeking $ 543,778. This includes $ 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 On The Trax restaurant in Berlin, MA; and $ 105,381 Dock Wireless, an unincorporated business.
The DOJ states that Staveley had no stake in Top of the Bay, Remington House Inn, or On The Trax. In fact, these businesses were closed when the loan applications were filed. As for Dock Wireless, it had no employees and the company never paid a salary. But the capers don’t stop there.
After being returned to house arrest with electronic surveillance, Staveley removed him, staged his own suicide and went on the run. The DOJ says he left several people with suicide notes along with his wallet along the ocean in Massachusetts. Staveley was then apprehended by the United States Marshals Service in Alpharetta, Georgia on July 23, 2020.
Butziger is expected 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 funds to keep them in business.
However, the allure of easy money was too great for many unscrupulous crooks who took money away from people who really needed it. The criminal fraud firm PPP was responsible for defrauding 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 indicted hundreds of felons with pandemic loan fraud.