The U.S. Attorney’s Office of the District of Rhode Island has managed to prosecute and sentence the first person charged for fraudulently applying for and receiving COVID relief business loans. David Adler Staveley was sentenced to 56 months in federal prison by U.S. District Court Judge Mary S. McElroy. Staveley will follow the sentence with 3 years of federal supervised release.
Fraudster Gets Sentenced
According to the U.S. Department of Justice, David Staveley from Massachusetts, along with David Butziger of Rhode Island filed four fraudulent PPP loan applications. The DOJ says the pair falsely claimed they owned businesses with large monthly payrolls. As a matter of fact, they didn’t even own the businesses.
The DOJ revealed Staveley admitted that he and Butziger filed fraudulent applications for four businesses seeking $543,778. This includes $185,570 at Top of the Bay restaurant in Warwick, RI; $144,050 at 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 Staveley didn’t have any ownership interest in Top of the Bay, Remington House Inn, or On The Trax. In fact, these businesses were closed when the applications for the loans were submitted. Regarding Dock Wireless, it had no employees and the company never paid any wages. But the caper doesn’t end there.
After being released to home detention with electronic monitoring Staveley removed it, staged his own suicide, and went on the lam. The DOJ says he left suicide notes with several people as well as his wallet along the ocean in Massachusetts. Staveley was later apprehended by the United States Marshals Service in Alpharetta, GA., on July 23, 2020.
Butziger is scheduled to be sentenced on November 1, 2021.
PPP Loan Fraud
When the PPP was first announced, it was a welcomed relief for many small businesses that were struggling to make ends meet. And the program helped millions of small businesses by providing funds to keep their business going.
However, the lure of easy money was too great for many unscrupulous scammers that were taking money away for people that truly needed it. The PPP fraud criminal enterprise was responsible for defrauding more than $341,000,000 as of January 2021.
While the sentencing of Staveley is the first, it won’t be the last because the DOJ has charged hundreds of criminals with pandemic loan fraud.
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This article, “First COVID Small Business Loan Fraudster Gets Sentenced” was first published on Small Business Trends