By Jan Wolfe
WASHINGTON (Reuters) - The U.S. Justice Department on Tuesday brought its first criminal charges against people it accused of defrauding the $660 billion Paycheck Protection Program aimed at dulling the coronavirus pandemic's heavy hit on the economy.
The small-business loan program is part of an unprecedented $2.2 trillion coronavirus economic package meant to reimburse businesses and households for lost income due to shutdowns and stay-at-home orders.
David Staveley, 52, of Andover, Massachusetts said he needed more than $400,000 to help employees at three restaurants, when in fact two of the establishments were closed before the pandemic began and the third has a different owner, prosecutors alleged.
Prosecutors said David Butziger, 51, of Warwick, Rhode Island lied about the number of employees at a small business to obtain a forgivable $105,000 loan.
The two men exchanged emails about how to create fraudulent loan applications and supporting documents, the Justice Department said.
Both men were arrested on charges including conspiracy to commit bank fraud.
"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 Aaron Weisman of Rhode Island said in a statement.
In March, Attorney General William Barr ordered all U.S. Attorney offices to prioritize investigations into coronavirus scams, such as the peddling of fake cures, investment schemes and Medicare fraud.
Attempts to contact the men or their lawyers were not immediately successful.