TWO NABBED IN FIRST FED FRAUD CASE INVOLVING PPP LOANS FOR SMALL BUSINESSES

WASHINGTON, DC     5/6/2020     8:21am(est)

 

 

 

On Tuesday, federal prosecutors charged David A. Stavely (52), from Andover, Massachusetts, and David Butziger, (51), from Warwick, Rhode Island, with conspiring to seek forgivable loans granted by the Small Business Administration. According to the Department Of Justice, the total of the loans was around $544,000. According to USA Today (@usatoday), the pair claimed to have dozens of employees earning wages at four different entities. The Feds say there were no employees working for any of the businesses.

 

going out of business

 

 

 

This is the first, in what experts say will be many cases prosecuted for attempting to defraud the SBA. The PPP loan program was supposed to offer loans of up to $10 million for business with 500 or fewer employees at the time the pandemic began. The loans are completely forgiven if 75% of the loan money goes to keep current employees on payroll and/or hiring new employees. The remainder of the loan is supposed to be spent on expenses like rent and utilities. The Assistant Attorney General of The United States, Brian Benzckowski, who is leading the department’s enforcement of the PPP loans, said that inquiries are already in the double-digits and are scattered all across the country. The Assistant Attorney General is reportedly using the model they used to prosecute fraud crimes after Hurricane Katrina in 2005 and the financial crisis of 2008. when billions of dollars of federal money was thrown around in hopes of assisting in recoveries. “It’s important that we go after each and every one of these cases. We have the resources we need to work this. We have the full benefit of all 94 U.S Attorneys’ Offices across the country.” Benczkowski said.

 

assistant attorney general

Assistant Attorney General Brian Benczkowski

 

 

The defendants are charged with conspiracy to make false statements to influence the SBA, and conspiracy to commit bank fraud. According to court documents, the pair applied for loans for businesses that were not operating prior to the start of the Coronavirus pandemic and had no salaried employees. Stavely applied for loans of more than $438,000, claiming he had dozens of employees at three restaurants he owned in Rhode Island and Massachusetts. Butziger filed an application for a loan seeking $105,381 under the PPP as owner of an unincorporated entity named Dock Wireless, who had 7 employees on payroll including himself. According to the Feds, the business did not exist. If the Feds are going after businesses and businessmen and women for attempting to defraud the SBA, is it correct to assume they will be going after everyone, and not just the small players? According to the rules of the PPP loans, only businesses with less than 500 employees qualified for loans. I’m sure the government will be also looking into those huge businesses who grabbed a few million for themselves under the PPP, like the Los Angeles Lakers, and Shake Shack. Yeah right! Don’t hold your breath waiting for the fat cats to be prosecuted for fraud. It’s not going to happen. This whole sham of an “investigation” is about trying to put a pretty dress on an ugly pig. Large corporations stole that money that was meant for small businesses, and there will be no consequences. That is the real story here, not some random guys who tried to run off on the plug with a half million dollars! Stay woke!

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