Staveley and Butziger allegedly claimed in loan documents to have dozens of workers earning wages at four different companies, when no one was in fact employed in the outfits, prosecutors said.
“What we are claiming these men did is wrong and just plain selfish,” Weisman said in a video press conference. “It is wrong for anyone to try to steal a program put in place to help hard-working Americans.”
The men were each charged with Conspiracy to Make a False Statement to Influence the Federal Small Business Administration and Conspiracy to Commit Bank Fraud, prosecutors said. Staveley is also charged with aggravated identity theft, while Butziger has been charged with bank fraud, authorities say.
The couple, who have never received federal money, were released on Tuesday in the form of unsecured bonds, authorities said.
Staveley, prosecutors said, allegedly claimed in loan applications for more than $ 438,500 that he employed dozens of people at two restaurants in Rhode Island and one in Berlin, Mass.
But investigators found that one restaurant in Warwick, the former Remington House, and the Berlin restaurant, On The Trax, were not open before the pandemic, at the time the requests were submitted, or at any time. thereafter, according to the press release.
Additionally, Staveley neither owned nor had a role at Rhode Island’s second restaurant, Top of the Bay, prosecutors said. Weisman’s office said On The Trax in Berlin closed on March 10, after the city revoked its liquor license for several reasons, including “that” Sanborn “allegedly falsely claimed that his brother owned the. restaurant”.
Prosecutors also said “Staveley / Sanborn” allegedly used his brother’s credentials in other real estate transactions.
Staveley has previously been convicted of federal fraud in New Hampshire, Vilker said.
Butziger also reportedly attempted to submit a fraudulent loan application.
Court documents allege he applied for a loan of $ 105,381 as the owner of an unincorporated business called Dock Wireless. He allegedly claimed in documents and in a phone call with an undercover FBI agent posing as a bank compliance officer that Dock Wireless employed seven people full time, including himself, the office said. Weisman.
Butziger falsely told the agent he hired the full-time employees on January 1, 2020 and fired them in late March, prosecutors said. He also allegedly claimed that his alleged staff continued to work until April for nothing and that he would use the loan funds to pay them off, the statement said.
But when asked about their selflessness, the supposed employees told a different story, according to records.
“Officers interviewed several of the alleged Dock Wireless employees who said they had never worked for Butziger or Dock Wireless,” the statement said.
Additionally, prosecutors said, the Rhode Island Department of Revenue told the IRS it had no record of salaries paid in 2020 by Dock Wireless or Butziger.
Authorities said Staveley and Butziger discussed their alleged loan program via email.
“We believe the two men lied, cheated and implemented this ploy so they could line their pockets – to the detriment of hard-working small businesses that are on the verge of financial ruin as a result of this pandemic,” he said. said the special agent of the FBI. Joseph R. Bonavolonta of the Boston regional office said at the press conference.
Bonavolonta’s words were echoed by Special Agent in Charge Kristina O’Connell of the IRS-Criminal Investigation, or IRS-CI.
“At a time when this country is expected to come together, Staveley and Butziger have decided to take advantage of the pandemic for their own personal benefit,” O’Connell said at the press conference.
“The alleged actions of the accused Staveley and Butziger are criminally reprehensible,” O’Connell said. “Hitting a government program designed to provide financial assistance to small business owners during the coronavirus pandemic is like taking money straight out of the pockets of those who need it most.
Hannibal “Mike” Ware, the SBA Inspector General, also intervened, noting that fraudsters often raise their heads in times of crisis.
“This is a critical time for small businesses in our country. It is well known that fraudsters prey on those in vulnerable positions, ”Ware said in the statement. “As this result shows, SBA-[Office of the Inspector General] and its law enforcement partners are actively working together to eliminate fraud in SBA programs and bring those responsible to justice.
In a separate statement, US Senator Jack Reed, a Democrat from Rhode Island, condemned the suspected crooks for “attempting to illegally profit from this pandemic.”
“We knew a fraud attempt was coming and included tough rules in law to help law enforcement crack down on scammers and prosecute anyone who tries to abuse the system,” Reed said. “Those who seek to rob taxpayers are going to get caught and should pay a heavy price.”
Globe correspondent Jeremy C. Fox contributed to this report.