Two businessmen charged with falsely trying to obtain $544,000 in federal loans intended for small businesses amid the coronavirus outbreak - even though 'they had NO employees'

Two businessmen have been accused of fraudulently seeking more than half a million dollars in forgivable loans under the Paycheck Protection Program - the $669 billion relief program introduced by Congress in March to support small businesses struggling in the midst of the coronavirus pandemic.

On Tuesday, the Department of Justice charged David Staveley, 52, and David Butziger, 51, with conspiracy to make false statements to influence the Small Business Administration and conspiracy to commit bank fraud.  

They are the first people to be charged with making phony applications for loans under the PPP - but investigators say there are likely to be more in the coming months. 

The two men allegedly claimed they needed to pay employees at businesses affected by the COVID-19 crisis, when in reality their businesses were not operating before the pandemic began and had no employees on the payroll. 

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On Tuesday, the Department of Justice charged David Staveley and David Butziger (pictured) with conspiracy to make false statements to influence the Small Business Administration and conspiracy to commit bank fraud

'Every dollar stolen from the Paycheck Protection Program comes at the expense of employees and small business owners who are working hard to make it through these difficult times,' Assistant Attorney General Brian A. Benczkowski said in a statement released by the DOJ Tuesday.  

The duo's alleged crimes were additionally described in the statement as 'reprehensible'.   

Authorities say that Staveley, who hails from Andover, Massachusetts, filed loan applications for more than $438,500, claiming that he needed to pay dozens of employees at three restaurants he owned. 

However, two of the restaurants weren't open before the pandemic began and he didn't have any connection to the third restaurant he claimed to have owned, authorities said.   

He has additionally been additionally charged with aggravated identity theft. 

The FBI were seen arresting Staveley and Butziger on Tuesday 

Meanwhile, Butziger, of Warwick, Rhode Island, sought a $105,381 loan under the PPP. 

He claimed he had seven full-time employees to pay at a business he owned called Dock Wireless. 

However, the state of Rhode Island has no record of Butziger paying employees this year and several supposed employees interviewed by agents said they never worked for him or Dock Wireless.  

In the DOJ statement announcing the charges, Rhode Island U.S. Attorney Aaron Weisman stated: '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.' 

Pictured: One of the three restaurants Staveley allegedly falsely claimed he was operating amid the coronavirus pandemic

The Paycheck Protection Program was introduced to help protect jobs amid the COVID-19 crisis, and allows small businesses to apply for low-interest loans of up to $10 million.  

The loan proceeds may be used to cover the business' payroll costs, rent, interest, and utilities.  The loan may be partially or fully forgiven if the business keeps its employee counts and employee wages stable.

Assistant Attorney General Brian A. Benczkowski told USA Today that he does not believe Staveley and Butzinger are the only people who have filed false claims. 

'What we see coming out of Rhode Island is what’s happening across the country. We have a lot of leads,' he stated.