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It seems that two New England businessmen took the idea of “free money” manner too far.
David A. Staveley (a/okay/a Kurt D. Sanborn) of Andover, Massachusetts, and David Butziger of Warwick, Rhode Island, have been accused of conspiring to illegally receive funds by means of the Paycheck Safety Program (PPP). The PPP provides billions of {dollars} in doubtlessly forgivable loans to maintain staff on the payroll, assured by the Small Enterprise Administration (SBA).
Staveley and Butziger claimed to have dozens of workers incomes wages at 4 completely different enterprise entities when, actually, there have been no workers working for any of the companies. They allegedly sought greater than a half-million {dollars} in loans.
“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,” stated Assistant Legal professional Basic Brian A. Benczkowski of the Justice Division’s Prison Division. “The Criminal Division is committed to working with our law enforcement partners to root out abuse of the important relief programs established under the CARES Act.”
The pair had been particularly charged with conspiracy to make a false assertion to affect the SBA to acquire a loan (in violation of 18 USC § 371) and conspiracy to commit bank fraud (in violation of 18 USC § 1349). Staveley has additionally been charged with aggravated identification theft (in violation of 18 USC § 1028A), whereas Butziger has additionally been accused of bank fraud (in violation of 18 USC § 1344).
In line with court docket paperwork, the fraudulent loan requests had been to pay workers of companies that weren’t working earlier than the beginning of the COVID-19 pandemic and had no salaried workers. One of many eating places had beforehand been open, but it surely was closed by March 10, 2020, when the city of Berlin revoked the enterprise’ liquor license for quite a few causes. One other restaurant used within the scheme has not been practical because it was closed in November of 2018 and is presently in disrepair with dumpsters on-site and “Stop Work” notices posted on the property.
In one other occasion, it’s alleged that on April 6, 2020, Butziger filed an software looking for a PPP loan because the proprietor of an unincorporated entity named Dock Wi-fi. He claimed that he had seven full-time workers on Dock Wi-fi’ payroll, together with himself, that he introduced on full-time on January 1, 2020, and laid off on the finish of March. Butziger claimed the staff continued to work with out being paid by means of April 2020, and that he would use SBA PPP funds to pay them. Nonetheless, the Rhode Island State Division of Income offered data to the IRS of getting no data of worker wages having been paid in 2020 by Butziger or Dock Wi-fi. And brokers interviewed a number of of the supposed workers who reported that they by no means labored for Butziger or Dock Wi-fi.
Electronic mail correspondence between the 2 suggests a plan to manufacture data, together with types 941 (payroll data). For instance, the criticism signifies that in April of 2020, Butziger emailed Staveley, “I can create a bull sh[*]t 2020q1 for Oakland beach if you want.” In a collection of emails, Staveley finally replied, “These look good. It says we need payroll reports for the past 12 months? Can we get what we have from toast payroll on New Flatt Penny L.L.C.? And should we dream up 1st quarter on the other two? Please advise…..thank you David.”
“The alleged actions of defendants Staveley and Butziger are criminally reprehensible,” stated Particular Agent in Cost Kristina O’Connell of the IRS-Prison Investigation (IRS-CI). “Defrauding a government program designed to provide financial assistance to small business owners during the Coronavirus pandemic is tantamount to taking money directly out of the pockets of those who need it most. Today’s arrests exemplify the hard work, dedication and efficiency of IRS-CI and the entire investigative team.”
In line with the Division of Justice, the fees are the primary within the nation linked to the favored SBA loan program. Federal investigators have hinted that extra are coming.
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