The Department of Justice has charged two businessmen in the nation’s first prosecution for fraudulently obtaining COVID-19 stimulus funds.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides for more than half a billion dollars to be loaned to small businesses to keep workers on payroll, known as the Paycheck Protection Program. The two businessmen —  David A. Staveley, aka Kurt D. Sanborn, of Andover, Massachusetts, and David Butziger, of Warwick, Rhode Island – allegedly claimed more than half a million dollars to support dozens of employees earning wages at four different businesses when, in fact, there were no employees working for any of the businesses.

Staveley and Butziger are charged with conspiracy to make false statements to influence the Small Business Administration and conspiracy to commit bank fraud. Stavely allegedly applied for loans relating to restaurants that were not operating, including one that closed when its liquor license was revoked. Butziger allegedly applied for loans to pay seven non-existent workers at a business he operated, and made false statements to an undercover FBI agent posing as a bank compliance officer. The two businessmen allegedly discussed via email the creation of fraudulent loan documents to be submitted under the Paycheck Protection Program, which allows loans to be forgiven if businesses use at least 75% of the forgiven amount for payroll. 

The DOJ noted that a federal criminal complaint is merely an accusation and defendants are presumed innocent unless and until proven guilty

Read the DOJ press release here.