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An Andover man is one of the first two people arrested in America for fraudulently seeking more than a half-million dollars in forgivable loans through the recently-passed CARES Act, the U.S. Attorney for Rhode Island announced Tuesday.
Federal prosecutors in Rhode Island said David Staveley, aka Kurt Sanborn, 52, of Andover, is charged — along with 51-year-old David Butziger of Warwick, Rhode Island — with claiming in loan applications to have dozens of employees earning wages at four different business entities when, in fact, there were no employees working for any of the businesses.
Staveley allegedly filed loan applications requesting more than $438,500 in which he claimed that he had dozens of employees at three restaurants he owned — two in Rhode Island and one in Berlin, Mass.
Prosecutors said their investigation determined that one of the Rhode Island restaurants and the Berlin restaurant, On The Trax, were not open for business prior to the start of the COVID-19 pandemic, at the time the loan applications were submitted, or at any time after. The other Rhode Island restaurant, Top of the Bay, was not owned by Staveley and he did not have any role in the business for which he was seeking financial relief, prosecutors said.
"Tens of millions of Americans have lost their jobs and have had their lives thrown into chaos because of the coronavirus pandemic. It is unconscionable that anyone would attempt to steal from a program intended to help hard working Americans continue to be paid so they can feed their families and pay some of their bills," U.S. Attorney for Rhode Island Aaron Weisman said.
Weisman's office said that Staveley's restaurant in Berlin was closed by March 10 when the town "revoked the business' liquor license for numerous reasons, including that 'Sanborn' allegedly misrepresented that his brother owned the restaurant." Prosecutors said their investigation also revealed that Staveley allegedly used his brother’s personal identifying information in other real estate transactions.
Butziger is alleged to have filed a loan application seeking $105,381 for an unincorporated entity named Dock Wireless, but the Rhode Island Department of Revenue had no records of employee wages having been paid in 2020 by Butziger or Dock Wireless, and several of the people who supposedly worked for Dock Wireless told investigators that they never worked for the company.
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