PROVIDENCE – A Warwick man today admitted to a federal court judge that he participated in a conspiracy with a Massachusetts man to submit fraudulent bank loan applications to a Rhode Island bank in an effort to obtain hundreds of thousands of dollars in forgivable loans guaranteed by the Small Business Administration (SBA) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress to assist businesses impacted by the pandemic.
David Andrew Butziger, 52, admitted that he conspired with David Adler Staveley, a/k/a Kurt David Sanborn, a/k/a David Sanborn, 53, of Andover, MA, to seek forgivable loans guaranteed by the SBA, claiming to have dozens of employees earning wages at four different business, three restaurants and an electronics business, when, in fact, there were no employees working for any of the businesses.
Butziger admitted that he submitted a loan application to BankNewport under the federal Paycheck Protection Program (PPP), part of the CARES Act passed by Congress on March 29,2000, on behalf of an unincorporated entity that he called Dock Wireless. The loan application was in the amount of $105,381.50 and fraudulently represented that Dock Wireless had 7 employees and an average monthly payroll of $42,152.60. According to the government, in truth and in fact, Dock Wireless had no employees and no wages were ever paid by Dock Wireless.
Butziger admitted that he conspired with Staveley who himself allegedly submitted three fraudulent bank loan applications for SBA loans under the PPP totaling $438,577. It is alleged that Staveley claimed the loans were to be used to pay employees at three restaurants he claimed to own and to be operating, including Top of the Bay and Remington House in Warwick and On The Trax in Berlin, MA.
An investigation determined that Remington House and On The Trax were not open for business prior to the start of the COVID-19 pandemic and at the time the loan applications were submitted, and that Staveley did not own or have any role in Top of the Bay restaurant.
Appearing today before U.S. District Court Judge Mary S. McElroy, Butziger pleaded guilty to conspiracy to commit bank fraud, announced United States Attorney Aaron L. Weisman, Special Agent in Charge Joseph R. Bonavolonta of the FBI’s Boston Field Office, and Acting Special Agent in Charge of Internal Revenue Service Criminal Investigation Joleen Simpson.
Butziger is scheduled to be sentenced on December 18, 2020.
A federal grand jury returned an indictment on September 2, 2020, charging Staveley with three counts of bank fraud and one count each of conspiracy to commit bank fraud, false statements to influence the SBA, aggravated identity theft, and failure to appear in court as required.
After having been having been charged by way of a federal criminal complaint in May 2020 for his alleged role in the conspiracy to gain four fraudulent SBA PPP loans, and while on pre-trial release, Staveley allegedly faked his own death and failed to appear in court, as ordered by the court. It is alleged that from May 26, 2020, to July 23, 2020, in an effort to avoid apprehension, Staveley traveled to various States using false identities and stolen license plates. He was apprehended by the United States Marshals Service in Alpharetta, Georgia on July 23, 2020.
Staveley is now detained in federal custody while awaiting trial.
A federal indictment and a criminal complaint are merely accusations. A defendant is presumed innocent unless and until proven guilty.
The cases are being prosecuted by Assistant U.S. Attorney Lee H. Vilker.
The Justice Department acknowledges and thanks the SBA Office of Inspector General and the FDIC, Office of Inspector General for their efforts investigating this mater.