Feds Indict Man Accused Of Faking Death After PPP Fraud

By Chris Villani
Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.

Sign up for our Banking newsletter

You must correct or enter the following before you can sign up:

Select more newsletters to receive for free [+] Show less [-]

Thank You!



Law360 (September 3, 2020, 4:56 PM EDT) -- Rhode Island federal prosecutors said Thursday they indicted a Massachusetts man who allegedly faked his own death and spent more than a month on the lam after being charged with fraudulently applying for nearly $544,000 in forgivable small business loans through the Paycheck Protection Program.

David Adler Staveley, who prosecutors say also goes by Kurt David Sanborn and David Sanborn, was initially arrested and charged in May. Prosecutors say he violated the conditions of his release by traveling to Connecticut, and was subsequently ordered confined to his home with GPS monitoring. The government claims Staveley then cut off his ankle bracelet and fled, faking his own death to throw law enforcement off the trail.

"In an effort to deceive law enforcement into believing that he had died, it is alleged that Staveley staged his suicide by, among other things, leaving suicide notes with associates and in his car, which he left unlocked and parked by the Atlantic Ocean," U.S. Attorney Aaron Weisman's office said in a statement.

Staveley, 53, used different false identities and stolen license plates to avoid capture from May 26 to July 23, when he was taken into custody in Georgia, prosecutors say.

The Andover, Massachusetts, resident was indicted Wednesday on three counts of bank fraud and one count each of conspiracy to commit bank fraud, false statements to influence the Small Business Administration, aggravated identity theft, and failure to appear in court as required.

Along with an alleged co-conspirator, David Andrew Butziger of Warwick, Rhode Island, Staveley claimed to have dozens of employees working at four different businesses in an effort to seek forgivable Paycheck Protection Program loans, according to prosecutors. Staveley claimed to have three restaurants and an electronics business, but prosecutors say there were no employees working at any of the purported businesses.

According to the indictment, Staveley filed five separate fraudulent loan applications for businesses, seeking a total of nearly $544,000. It was unclear whether he received any of the money he and Butziger sought.

Prosecutors say Butziger, 52, has agreed to plead guilty. Staveley is scheduled to be arraigned Sept. 21.

Enacted in March, the Coronavirus Aid, Relief and Economic Security, or CARES, Act authorized up to $349 billion in forgivable loans to small businesses for job retention and other expenses through the PPP. Congress authorized an additional $300 billion in PPP funding in April.

Qualifying small businesses are allowed to receive low-interest loans that must be used for payroll costs, interest on mortgages, rent and utilities. The interest and principal on the loans may be forgiven if the business spends the money on those types of expenses within eight weeks and uses at least 75% of the forgiven amount to cover payroll expenses.

Counsel for Staveley did not immediately return a request for comment Thursday.

The government is represented by Assistant U.S. Attorney Lee H. Vilker.

Staveley is represented by Mark L. Josephs of the Law Office of Mark L. Josephs LLC and Jeffrey K. Techentin of Adler Pollock & Sheehan PC.

The case is U.S. v. Staveley, case number 1:20-cr-00074, in U.S. District Court for the District of Rhode Island.

--Editing by Alanna Weissman.

For a reprint of this article, please contact reprints@law360.com.

Attached Documents

Useful Tools & Links

Related Sections

Case Information

Case Title

Magistrate judge case number: 


Case Number

1:20-cr-00074

Court

Rhode Island

Nature of Suit

Date Filed

September 02, 2020

Law Firms

Government Agencies

Hello! I'm Law360's automated support bot.

How can I help you today?

For example, you can type:
  • I forgot my password
  • I took a free trial but didn't get a verification email
  • How do I sign up for a newsletter?
Beta
Ask a question!