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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
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UNITED STATES OF AMERICA
VS.
DAVID STAVELEY
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20-CR-074-MSM
OCTOBER 7, 2021
PROVIDENCE, RI
BEFORE THE HONORABLE MARY S. McELROY
DISTRICT JUDGE
(Sentencing Hearing)
APPEARANCES:
FOR THE GOVERNMENT:
LEE H. VILKER, AUSA
U.S. Attorney's Office
50 Kennedy Plaza, 8th Floor
Providence, RI 02903
FOR THE DEFENDANT:
JASON P. KNIGHT, ESQ.
Law Office of Jason Knight
One Turks Head Place, Ste. 1440
Providence, RI 02903
Court Reporter:
Denise P. Veitch, RPR
One Exchange Terrace
Providence, RI 02903
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7 OCTOBER 2021 -- 11:00 A.M.
THE COURT: Good morning. I apologize for being
late; we had another matter and I had a meeting in
between, Mr. Vilker. So I'm going to ask that we go on
the record in the case of the United States of
America v. David Staveley, and that is criminal action
20-74, and I'm going to ask counsel to identify
themselves for the record, beginning with the
Government, please.
MR. VILKER: Good morning, your Honor.
Lee Vilker for the United States.
THE COURT: Good morning again, Mr. Vilker.
MR. KNIGHT: Good morning, your Honor.
Jason Knight on behalf of David Staveley.
THE COURT: Good morning Mr. Knight.
Mr. Staveley, how are you?
THE DEFENDANT: Excuse me, your Honor?
THE COURT: I can't hear you, Mr. Staveley.
THE DEFENDANT: Excuse me?
THE COURT: How are you this morning,
Mr. Staveley?
THE DEFENDANT: Okay.
THE COURT: You're going to need to speak up or
I won't be able to hear you.
THE DEFENDANT: I'm okay. Thank you.
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THE COURT: Okay. All right. You can be
seated. Can you tell me in your own words,
Mr. Staveley, why we are here today.
THE DEFENDANT: Yes, your Honor. We're here
because, to be sentenced regarding crime that occurred
in Rhode Island.
THE COURT: You need to speak just a little
louder, Mr. Staveley.
THE DEFENDANT: I'm sorry.
THE COURT: That's okay. So you're here, you
know, for sentencing; correct?
THE DEFENDANT: Yes, your Honor.
THE COURT: All right. So now tell me, did you
go over the sentencing report with your attorney, the
Presentence Investigation Report.
THE DEFENDANT: I did, your Honor.
THE COURT: Okay. And did Mr. Knight answer all
your questions about it?
THE DEFENDANT: Yes, your Honor.
THE COURT: Okay. So the process for today just
so you're aware is that we're going to go through the
presentence report after I hear the objections from
your attorney and from the Government, and then the
Court will determine the appropriate advisory
sentencing guideline; and then I'll hear from the
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Government and your attorney regarding sentencing. If
there's anything you would like to say to the Court,
that's your time to address the Court; you're not
required to, but you can, and that's your opportunity
to do so, okay?
THE DEFENDANT: Yes, your Honor. Thank you.
THE COURT: Okay. So I'm going to start with
the Government's objections to the presentence report.
MR. VILKER: Your Honor, the final report I
don't -- the only objection that we had was really
joining in the defense that we believe that there
should be credit for acceptance of responsibility and
that the Defendant entered this plea after he committed
the offense that we believe constitutes obstruction of
justice. We believe he's accepted responsibility for
both of those offenses and should be credited with the
three-level reduction. Other than that I don't believe
there's any other objection that the Government has.
THE COURT: Okay.
Mr. Knight.
MR. KNIGHT: Yes, your Honor. We --
THE COURT: Can you go to the podium, please,
for the stenographer. I'm sorry; I should have said
that before. Not used to doing things in the
courtroom.
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MR. KNIGHT: It's all (indecipherable). Your
Honor, on the presentence report, we filed an objection
with three points. One of them has been taken care of
by agreement with the Government and Probation, so I
don't have to address that.
THE COURT: Which one was that?
MR. KNIGHT: Probation had assigned points for
fraud in violation of the Stafford Act, but that's
legally not tenable.
THE COURT: Okay.
MR. KNIGHT: We put an objection in because
Probation did not credit him the three points for
acceptance, as the Government just recommended, so both
the Defendant and the Government believe that he should
get credit for acceptance, the three points, because he
has in fact pled, he has stood in front of the judge,
in front of you and accepted responsibility for his
actions and is here today for sentencing.
And then finally, Probation assigned two points
for obstruction of justice. Now, I'm here to say that
when you read the manual they can do that. I think the
manual opens the door for assigning obstruction of
justice points in the case where somebody has fled and
avoided a pretrial appearance. However, as with many
things in the manual I think that it is and I argue
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that it's just unfair. He's going to get sentenced for
the charge of failure to appear and that should be
enough, and it just strikes me as fundamentally unfair
and it's sort of doubling up to add points for
something, for an act by which he's been criminally
charged by way of Indictment and is going to get
sentenced. The book may allow it, but I don't think
it's right and I don't think it's fair, and I think you
should not add the points.
THE COURT: So I might agree with you,
Mr. Knight, if the obstruction charge and the plea to
that charge carried with it an impact on his advisory
guideline range, but with or without that enhancement
he -- so without that, just on the original charge, the
Count I, his guideline range or his adjusted offense
level would be a 23 without the acceptance of
responsibility, without the arguments for the other
adjustments.
MR. KNIGHT: Right.
THE COURT: The offense level on Count VII,
which is fleeing the jurisdiction, he's a 15, and when
they're combined he gets a 23, so he doesn't get
ratcheted up at all because of cutting off his bracelet
and leaving the jurisdiction; in fact, he gets the same
guideline range as he would have without that. Do you
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know what I'm saying? So he's not getting
double-counted. He's getting one two-level adjustment.
MR. KNIGHT: That's my point, Judge. He, when
you go through the -- I don't have the calculation in
front of me. He gets points for Count I, he gets
points for Count II. You combine them. Count I is
higher so that's the one that's going to control.
THE COURT: Right.
MR. KNIGHT: And then you add points or don't
deduct, depending on where you are on the acceptance
thing, so he's got 23. If you take away the three
points for acceptance that would put him in a 20. And
I'm saying he got ratcheted two points for obstruction.
If he didn't have the two points for obstruction he
would be 18. That's how I read it.
THE COURT: Right. But you don't think his
conduct was obstructive? I'm going to not ask that
question; that's unfair.
MR. KNIGHT: I think that Count II or Count VII
accommodates that behavior.
THE COURT: Okay. I understand.
Mr. Vilker, do you have anything you want to
say?
MR. VILKER: Your Honor, just two brief points
on this. First this is classic obstruction of justice.
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The application to the guideline for 3C1.1 says that
(Reading) The following is a non-exhaustive list of
examples of the types of conduct to which this applies.
And then note (E) to that says, (Reading) Escaping or
attempting to escape from custody before trial or
willfully failing to appear as ordered for judicial
proceeding.
This is, I mean, right down the middle of the
lane on what counts as obstruction of justice. And as
your Honor indicated, if that two levels is not applied
it's as if he gets a pass. The guidelines would not
even count. Count VII doesn't add anything to the
guideline calculation. So we think it should apply.
THE COURT: Thank you, Mr. Vilker.
Mr. Staveley, I'm going to go through the
offense calculations and explain to you what I think
about the objections as to each one.
So as we just indicated, you pled guilty to
conspiracy to commit bank fraud and the base offense
level for that is a base offense level of 7. The
guidelines under 2B1.1(b)(1)(G) calls for a 12-level
enhancement because of the intended loss which was
between $250,000 and $550,000.
So with respect to paragraph 34 in the
presentence report, the Probation Department has
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assigned a two-level increase for the fact that the
offense involved creating these false documents to
defraud the bank with respect to the Payroll Protection
Program. I think your attorney and the Government have
agreed that that does not apply, and so I'm not going
to impose that additional two-level enhancement -- oh,
I apologize. Am I wrong?
MR. VILKER: Yes, your Honor. Paragraph 34 is a
different enhancement. That's for using one means of
identification. That enhancement you mentioned has
already been removed from the presentence report.
THE COURT: Never mind; that's my bad,
Mr. Staveley. I'm reading from the wrong paragraph.
Okay. So paragraph 34 is a two-level increase
because the offense that you pled to involved the
possession of any device-making equipment or
authentication feature. In this case they're saying
that your Co-Defendant knowingly created the false and
fraudulent IRS 941 forms for you and for himself and
submitted these forms, and that you submitted these
forms to BankNewport. So that two-level enhancement
does apply. And I apologize; the other one has already
been removed.
The Government has, I mean the Probation Office
also assigned you a two-level increase for obstruction
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of justice, and this is absolutely applicable in your
case. It is not somebody who obstructed justice by not
showing in court, happened a day or two late. You
disappeared for two months. You cut off your home
confinement bracelet. For whatever reason you led the
Government to believe that you had committed suicide,
and the Government spent resources and time to track
you down. I think there's no clearer case for
two-level enhancement under 3C1.1. And so I am
overruling your objection to that, Mr. Knight, and I am
going to impose that three -- that two-level
enhancement.
I would also say that because of the way the
guidelines are calculated, even though you pled guilty
to Count VII it doesn't change your guidelines at all
because it is a much lower offense level than the bank
fraud with the amount of money. So if I didn't apply
that your offense level would be exactly the same as it
would be if you had done everything you were supposed
to do and not done any of that behavior, so I think I
can't see a way to take away that two-level
enhancement. That gives you an adjusted offense level
of 23.
With respect to as I said before Count VII, the
base offense level is a 6. Because of the statutory
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maximum of the charge that you fled during the
prosecution, that adds nine levels for an adjusted
offense level on just that charge of 15; and the way
that the guidelines tell us to combine offenses, your
offense level stays at a 23.
So the other question is the acceptance of
responsibility, and I think that this is one of those
things that is difficult to give you the obstruction
and also the acceptance of responsibility, but it is
left to the discretion of the judge; and I listened to
what the Government says with respect to this, these
factors, acceptance of responsibility points,
particularly the third point are in the discretion of
the Government. They're the ones that have to
prosecute you. If they feel you've accepted
responsibility sufficiently to earn the three points,
then it would be my inclination to grant you that
three-point reduction.
So I am going to rule in your favor on that
objection, Mr. Knight.
And that reduces your total offense level from a
23 to a 20, Mr. Staveley. Do you understand that?
THE DEFENDANT: Yes, your Honor.
THE COURT: Okay. So as I'm sure you've
reviewed the presentence report with your attorney,
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he -- as you know the criminal history points that you
have are for past criminal convictions and you are
awarded seven criminal history points for your past
convictions, which puts you in a Criminal History
Category IV. So with an offense level of 20 and a
Criminal History Category of IV, your advisory
guideline range is 51 to 63 months of incarceration,
and I think that's the appropriate guideline in this
case.
Does anybody want to say anything else about the
application of the guidelines?
MR. VILKER: No, your Honor.
MR. KNIGHT: That calculation appears to be
correct.
THE COURT: All right. Great. Thank you. Now,
part of the -- I don't think anybody is asking for any
departures or asking for any witnesses to testify so I
think that -- Mr. Knight, go ahead.
MR. KNIGHT: Sorry, Judge. I was going to as
part of my presentation advise the Court that the
Defendant is going to allocute and he also has his
mother here who would like to speak to the Court, for
witnesses.
THE COURT: That's unusual, but as long as it's
brief I think we can allow his mother to speak.
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MR. KNIGHT: Thank you.
THE COURT: Okay. So Mr. Staveley, have you
gone over the presentence report with your attorney in
its entirety?
THE DEFENDANT: Yes, your Honor.
THE COURT: Okay. And are you -- do you
understand everything in it? Have you had everything
in this report explained to you adequately by
Mr. Knight?
THE DEFENDANT: Yes, I believe so, your Honor,
yes.
THE COURT: Is there anything that you think you
don't understand in that?
THE DEFENDANT: I don't think so, no.
THE COURT: Okay. And do you understand as I've
just outlined for the record your advisory guideline
range?
THE DEFENDANT: Yes, your Honor.
THE COURT: So at this point I'm going to hear
argument from the Government and then from your
attorney, and then there will be an opportunity for you
to speak to the Court. I will have some questions for
you, if it's okay with your attorney, but I won't ask
them if your attorney does not consent.
Mr. Vilker.
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MR. VILKER: Thank you, your Honor. Your Honor,
this Defendant has a long history of committing fraud.
Indeed, this case is his third federal fraud conviction
and in this case the Defendant took his fraud
essentially to the next level by attempting to defraud
the Paycheck Protection Program in a time of national
emergency by submitting four fraudulent loan
applications with his co-conspirator, David Butziger.
The 18 USC 3553 factors in this case call for a very
significant sentence, and the Government is
recommending a sentence in the middle of the advisory
guideline range of 56 months imprisonment.
The first factor that I would suggest is the
most important in this case is the seriousness of the
offenses. At the very beginning of this pandemic, with
the country reeling and many people out of work and
many businesses shutting down, the Defendant saw only
an opportunity to make himself rich by stealing monies
that were meant to help other people in need. He
submitted PPP loans in the name of his brother without
his brother's knowledge or consent and he did so for
three different restaurants. One of these restaurants,
the Top Of The Bay restaurant in Warwick the Defendant
didn't even own, didn't have legal title to; just made
up entirely that he owned that restaurant. The other
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two restaurants were closed before the pandemic began.
One of them, the Remington Inn in Warwick had been
closed for years. In these loan applications
Mr. Staveley represented that he had between 18 to 26
employees and that he needed this money to continue
paying their salaries. He submitted fake tax documents
to make it look like these businesses had actually
employees when they didn't.
Fortunately, the scheme was uncovered before any
of these monies were paid out. The attempted fraud in
this case on the Paycheck Protection Program was an
especially reprehensible kind of fraud. These PPP
funds, even though they may have seemed like it at the
time, they were not endless. There are many legitimate
businesses who could not access these funds or have
experienced long delays in getting these funds.
When people like this Defendant attempted to
take for themselves what was meant to help others, they
were in effect taking actions that could prevent an
actual person or an actual business in need from
attaining these funds. This thought, I don't even know
if it crossed this Defendant's mind, there's no
evidence that it did; he simply saw a way of stealing
hundreds of thousands of dollars for himself.
Now, the fact that the money in this case came
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from funds that were set aside for a national emergency
doesn't even come into play in this Defendant's
guideline range. He would be facing the exact same
guideline range if he committed some other kind of
fraud like he has in the past on some business or
committing mortgage fraud or what have you. The
guideline range would be exactly the same. A strong
argument could be made in this case that the guidelines
don't really take into account the true nature of this
type of action that this Defendant committed in the
middle of a national emergency.
On top of that, the Defendant then committed a
whole separate crime when he removed his electronic
monitoring device from his body and fled. In an effort
to deceive law enforcement into believing that he had
died, Mr. Staveley staged his own suicide by leaving
suicide notes with family members and associates,
writing letters saying he was going to commit suicide
to a number of people, blaming them for driving him to
this point that he was killing himself and leaving them
with the belief that they were somehow responsibile for
his suicide. He left his vehicle unlocked and parked
by the Atlantic Ocean. Law enforcement actually sent a
search and rescue party out in the nearby ocean in an
attempt to locate his body. During the next two
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months, in an effort to avoid apprehension, he traveled
throughout the country, mostly in the South, using
false identities and stolen license plates. The
Marshals worked tirelessly in tracking him down, even
during the period which was very unclear if he had
indeed committed suicide. During this period
Mr. Staveley changed his phone number on at least five
occasions, and ultimately he was apprehended by
Marshals in Alpharetta, Georgia. He was found to be in
position of multiple false identification documents
that he used throughout the period of the flight.
Now, the Government submits to your Honor that
this sentence in this case must be harsher than it
otherwise would be if the Defendant had not committed a
separate crime of failing to appear in court.
Otherwise we would be in the perverse situation in
which a defendant ultimately receives the same sentence
he would have received even if he had not cut his
bracelet, assumed fake identities and led the Marshals
a two-month wild goose chase. If that were to occur
there would be no disincentive for other criminals to
take off. Why not try to flee if the worst-case
scenario is that you end up getting caught and get the
same sentence anyway. The guidelines as we just went
over in this case only add two levels for this conduct,
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in fact adding 10 months to the low end of the
guideline range from 41 to 51 months to 61 to
63 months.
The Government submits that whatever sentence
your Honor deems to be just on the fraud count, an
additional 10 to 12 months should be added on the
(indecipherable) to his conduct for absconding in this
case.
The next 3553 factor I want to talk about is the
protection of the public. The public needs to be
protected from this Defendant. This is his third time
in federal court on fraud charges. In 2009 he was
convicted in the District of New Hampshire for wire
fraud. That case concerned the Defendant's defrauding
a minor league baseball team by submitting false
invoices for fictitious companies. He received a
sentence for 30 months imprisonment for that offense.
He then was convicted in 2015 for wire fraud again in
the District of New Hampshire. This offense involved a
complicated mortgage fraud scheme that the Defendant
orchestrated in 2003 to 2005, and the Defendant was
sentenced to 27 months of imprisonment for this
offense. Those significant sentences of 30 months and
27 months didn't stop this Defendant from committing
more fraud once the coronavirus crisis hit and
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businesses across the country had to shut down.
I also think this is a strong argument for
deterrence in this case, both general and specific
deterrence. For general deterrence a message needs to
go out to the public that if you commit fraud,
particularly this type of fraud in a time of crisis
that money is meant to help people in need, you're
going to go to jail for a long period of time.
This particular case has received a lot of
publicity because the Defendant was actually the first
one charged in the country with committing PPP fraud,
and I by no means suggest that because he was the first
person charged that should affect the sentence in any
way; but nonetheless this is a case in which there is
an opportunity for general deterrence for people to
hear that a defendant who does this is going to receive
a significant sentence.
THE COURT: I'm sorry to interrupt, but your
argument that that was the first case, and I know
you're not saying it deserves additional sentence; but
the thing that struck me is that this first application
was filed only a week after the PPP, the CARES Act was
passed, --
MR. VILKER: Right.
THE COURT: -- and that PPP was enabled by
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Congress, so to me that is a fairly deliberate act.
MR. VILKER: Yes. I mean there is no evidence,
and we went through a lot of e-mails back and forth
between the two co-conspirators, and no evidence of any
kind of hesitation. Immediately, I think it was the
very end of March -- the applications were submitted
April 6th, and immediately one co-conspirator,
Mr. Butziger, is e-mailing Mr. Staveley, you know,
attached are the -- excuse my language -- the BS 941
forms. This was an immediate decision as soon as these
funds became available to take advantage of the
program.
And beyond that, your Honor, I really think this
is a case that specific deterrence is necessary. This
Defendant has already been sentenced twice for fraud
and got 27 and 30 months. Those sentences obviously
didn't do the trick. A sentence significantly higher
than that we hope would send this Defendant the message
that he can't keep committing fraud.
We're recommending a sentence in the mid point
of the guideline range. I think the guideline range in
this case of 51 to 63 gets it about right for the
amount of fraud and his taking off, and I think the
midpoint is an appropriate sentence in this case.
I do want to spend a little while talking about
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this Defendant as an individual because I know that's
what Mr. Knight is probably going to be spending a
significant amount of time on. I don't really think
it's appropriate for me in this venue to talk about the
allegations that the Defendant made in the past. All I
would say on that point, your Honor, is reading through
the presentence report, there's a lot of mixed
information on that and it's very unclear. I'm not
saying it didn't happen, I just don't know; and I don't
think the Court can just accept this Defendant's word
that that happened. It may have; if it did, you know,
I'm deeply sorry and I can't imagine how horrible it
is, but there's no factual basis one way or the other.
The thing that's always kind of jumped out to me
about this particular Defendant and, you know, and
different than a lot of other defendants in certain
ways, he seems to constantly be playing the victim and
blaming other people for his conduct. I was really
struck in the presentence report where he told the
Probation Department that he committed this crime of
submitting, immediately when the funds became available
submitting these false loan applications because he was
going through a bad, he was in a bad relationship and
that led to trauma and that led him to make this
decision. And I mean obviously there's no connection
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between the two. This crime was just pure greed.
And then even when he was talking about his
flight he seems to, you know, blame Mr. Butziger,
saying he did it at his direction and that he was just
blacking out and never got to his destination until he
was found by the Marshals in Georgia. You know, he
doesn't talk about how he sent suicide notes to his
friends and family and used different identifications,
different phones. I mean this was a deliberate and
intentional act. At least coming to court and take
responsibility and say I committed these crimes, I
accept my role in it. And I think if that -- that's
really the first step toward us, the Government and the
Court, having any confidence that this is a defendant
who is not going to keep repeating similar type actions
in the future and keep blaming others for his
decisions.
So for all these reasons, the Government
recommends a sentence in the middle of the guideline
range of 56 months. We believe that the
(indecipherable) of acceptance of responsibility are
appropriate. He has admitted and accepted
responsibility. Even though he, you know, tends to
blame other people, I think we're past the threshold in
the Government's view of him accepting responsibility,
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he has come into court and admitted it, and I think a
midpoint of the guideline range is appropriate.
Thank you.
THE COURT: And so I'm clear, you're
recommending that as a total sentence, so something on
Count I -- Count II has to be -- Count VII has to be
consecutive, so whatever the Court decides is
appropriate, your recommendation is a total of 56.
MR. VILKER: That's correct, your Honor.
THE COURT: Thank you. Mr. Vilker, there's no
restitution; is that correct?
MR. VILKER: There is not because there's no
actual loss.
THE COURT: Thank you.
Mr. Knight.
MR. KNIGHT: Chilly.
THE COURT: The room is cold.
MR. KNIGHT: The room is cold.
Your Honor, good morning, and I'm pleased to
present this --
THE COURT: Would you speak up or speak closer
to the microphone. It's hard to hear with the fans
behind us.
MR. KNIGHT: I'm pleased to present this
recommendation in this case, but I wanted to start by
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talking about a different case. I don't know if the
Court's familiar with Her Majesty v. Tom Dudley and
Edwin Stephens from 1884. I was first exposed to this
case in law school, and the sentencing in this matter
brought it to my attention again and I thought I should
bring it up. It's a murder case. Dudley and Stephens
were sailors assigned to the yacht MIGNONETTE down in
South Africa. There was a big storm, the yacht was
overcome, and Dudley and Stephens were put into a life
boat with a couple of other people, notably the young
17-year-old cabin boy named Parker, who this was his
first time at sea and he didn't have a lot to
contribute to the enterprise. Things got bad.
Everyone was going to die, at least they thought they
were, and Dudley and Stephens murdered Parker and they
ate him and drank his blood and they survived until
they reached land. When they reached land they were
charged with murder, and the legal issue in the case
was is necessity ever a defense to murder, and aside
from self-defense it's not.
But the interesting thing about the case from
our perspective is that they ultimately were found
guilty of murder, and in those days the penalty was
death and if it was commuted it would be life, and back
then life meant life. But in this particular case
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The Queen, through her administration, gave them six
months to serve, and the story of that case beyond the
legal issues is the story of the role of compassion in
our system of law and the role of mercy in our system
of law.
And it's with that kind of compassion I'm asking
the Court today to strongly consider compassion in this
case as you figure out what to do about David Staveley
and his sentence. And I'm asking you to consider the
man. I've given the Court a detailed memo --
THE COURT: And just for the record, I've
reviewed that. I'm not going to go over what's
contained in that. I've reviewed the Government's memo
as well.
MR. KNIGHT: Okay. I think it's, I think I can
say today --
THE COURT: You're free to go over anything you
and your client want, but I know there are personal
details in there.
MR. KNIGHT: Right. But I will say this. He's
got bad PTSD, and the Government says that the source
of that PTSD, that is an allegation. But I gave the
Court medical records showing that the providers, the
medical providers believe it is the case, it is the
diagnosis. And a correctional setting, because of the
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nature of the event, is what causes that PTSD; it's
what triggers him. And they are back, those symptoms,
so bad that he ran to avoid jail, which is documented
in Count VII.
But the rest of the story is that he was
arrested and he was taken to Wyatt, where he's been for
approximately 14 months, if my math is right, and
that's been 14 months of effectively self-isolation to
try to stay away from the rest of the population, to
try to stay away from the things that are troubling to
him, to try to stay away from the things that give him
the symptoms. And those 14 months are long months.
They're longer than for most other defendants.
Additionally they're COVID months, and you know as well
as I do and everyone in our system knows that those are
incredibly difficult months at Wyatt with a lot of
lockdown. Effectively, Judge, he has suffered every
single day of his incarceration in a way that was not
true in his previous incarcerations, and I'm asking the
Court to consider that.
I'm also asking the Court to consider that were
he -- were you to sentence him in line with the
Government's recommendation, that he would serve that
time at the Bureau of Prisons, and because of some
factual matters I've detailed in my memo it's likely
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that that time would be hard time as well. So that's
the prison piece. He's done a significant chunk, and I
hope you consider that as you figure out the sentence
in this case.
But in talking about him, you know, he's older
now than he was in those previous offenses, and we all
know that there's this tendency for criminality to age
out of people as they get older. He's not violent.
This is not a violent offense. There is, there
certainly was an intended loss, but actually I don't
even want to talk about loss yet. He's not violent.
His overall criminal history shows some domestic
behavior but nothing violent. He has family support.
His mother is here in the room today and she's going to
tell you about what she can contribute to his life, to
his rehabilitation were he to get out. He has skills.
He can work. And he's vaccinated, and he's taken COVID
seriously from the time that I met him and got
vaccinated at the first opportunity.
There is no doubt in his 54 years, in his path
to this courtroom today there have been ups and downs,
a lot of downs. He has a unique history, and I'll get
to the factors, the 3553 factors in a minute the way
the Government did. But when we're talking about one
of those factors, which is the nature, the
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characteristics of the Defendant, his are unique.
There are big, big issues there that are not present in
every other case. It's almost unique -- well, it is
unique. He's a unique human being; but he falls far
outside that standard deviation for other defendants
that come before you for other crimes, and I hope you
consider his unique issues in forming that sentence.
When we talk about the offense, there's the
offense which is the conspiracy to steal money, and
there's the escape charge. I think that the Government
lays it on a little thick by saying that this PPP
program, that somehow what the Defendant and his
Co-Defendant did made it harder for other businesses
and legitimate recipients of that money to apply or get
the money or somehow caused delay. The PPP, I mean
(indecipherable) because the PPP program went into
place. The Small Businesses -- the U.S. Treasury and
then the Small Business Association had to like kill
themselves essentially to come up with a regulation as
fast as they could. Businesses were chomping at the
bit, and the ones that wanted to get an application in,
were motivated to get their applications in, got their
applications in and got their money. To the extent
that we heard about businesses having trouble with the
PPP loans in the media during that time, that blitz, I
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would argue that oftentimes there was problems with the
businesses, lack of documentation, lack of 941s.
THE COURT: But wasn't -- I don't want to,
because this really isn't as relevant as other
issues, --
MR. KNIGHT: Sure.
THE COURT: -- but my recollection is that one
of the factors that businesses had difficulty getting
initially approved for PPP had to do with not having a
prior relationship with one of the banks administering
it and so the smaller businesses, the businesses with
less of a track record had some difficulty because
banks were prioritizing their already existing clients.
Am I incorrect in that?
MR. KNIGHT: There was news media around that.
I think also it was an issue that -- I did PPP, and I
had that personal experience of applying through a bank
with an existing relationship and I happened to have
941s. And I know it's unusual to draw on personal
experience, but my recollection is that if you had an
established relationship with the bank and you were
bona fide concerned with payroll, it was pretty easy.
If you were a small business that maybe was doing
something, you were just cutting the check and doing
the payroll yourself, you had to do a little math, a
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little math on the spreadsheet because the banks
evolved with the regulatory agencies to try to make the
process easier. I've done two PPP loans. I've been
forgiven for both. The process or the application on
one, on the first one, to the forgiveness on the first
one, and the application of the second one and the
forgiveness on the second one, are (indecipherable)
easier as time went on because they streamlined the
regulations. So to the extent that people had problems
getting to it, it wasn't because of David Butziger and
Mr. Staveley.
There was no actual loss in this case and
indeed, as I pointed out in my memo, the government
never, you know, when the government gave out this
money they had no intention of bringing it back. It
doesn't make --
THE COURT: Mr. Vilker says and he points out
that it was limited. If there's a pie and somebody
steals a piece of the pie there's less pie for
everybody else; right?
MR. KNIGHT: That is a fact.
THE COURT: And while he didn't get paid out, he
intended to take money out of a finite pool of money;
correct?
MR. KNIGHT: Yes.
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THE COURT: Okay.
MR. KNIGHT: And it's an open question as to
what that money was going to be used for. Was it going
to go right into the pockets and run to Mexico, I don't
know. But the Government doesn't know either; right?
It could have been plowed into trying to make some of
these things work. Top Of The Bay he didn't own. He
didn't have an ownership piece of Top Of The Bay. And
I can't tell, I can't represent to the Court, you know,
in detail what was going through his mind at the time.
But the other two businesses were, even though they
were having trouble, they might have been shut down,
had ongoing concerns before this happened.
THE COURT: But not his.
MR. KNIGHT: Not Top Of The Bay. But the other
two he had a piece of.
THE COURT: Remington House and the other
business he had a piece of?
MR. KNIGHT: On The Tracks, yes.
THE COURT: On The Tracks.
MR. KNIGHT: Right.
THE COURT: And I know Remington House closed in
2018. When did On The Tracks close, if you know.
MR. KNIGHT: That's the Berlin matter; right?
MR. VILKER: Sorry about that. I believe that
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was just a couple of weeks before COVID hit, very
beginning of March.
MR. KNIGHT: Because they ran into problems with
their liquor license.
THE COURT: All right.
MR. KNIGHT: I don't mean to diminish, but I'm
trying to draw constraints around what it is and what
it isn't in terms of the crime. And also the idea that
Butziger and Staveley jumped right in and were ready to
go with PPP applications as soon as the process opened
up, I think a lot of people were looking for some sort
of relief; and it was in the media, it was publicized
and it's coming, and Congress had passed the CARES Act,
and it was $1.3 trillion coming to you, get ready.
Everyone was ready to apply if they could.
So in this particular case the question is
what's sufficient, and I am arguing that a time-served
sentence with supervised release and a long supervised
release is sufficient for the reasons that I've stated.
It's an unusual recommendation given his criminal
history points and the nature of the offense compared
to his previous history, but because of his particular
concerns and what incarceration would in particular do
to him, and the fact that he's done the 14 months, I
think you could exercise some of that compassion
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appropriately that I described before in that story and
sentence him in a way that punishes, sentence him in a
way that does provide deterrence and both specific and
individual, because it is a sentence, and supervised
release is not, it's not a free pass to do whatever you
want.
If you do sentence him to a term of
incarceration beyond what he's already done, I would
request that you recommend a halfway house to BOP. I
would request that you request placement in New England
so he can be near family.
And I just want to bring it back to this, Judge.
I've put myself in your shoes as I've tried to come up
with what I think would be a, what it would be like for
you to thread the needle in this case. The Government
suggests that it's time to drop the hammer, right, it's
a 56 month sentence, which is far longer than what he
got before. Never mind the weird charging of his
previous charges. There was the 2008 case and then the
2013 which actually referenced 2003 events. The
Government says you know what, he needs to be really
deterred and jail is the answer; right? But, arguably,
because of that previous incarceration jail is not the
answer. It might be for nine out of 10 defendants, but
it's not the answer in this particular case.
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THE COURT: What is?
MR. KNIGHT: I think time-served with a long
period of supervised release, real supervised release
with Probation in his back pocket such that they can
keep an eye on him so that he walks the straight and
narrow, gets a job, a real job, a job that there's
nothing fancy about it, it doesn't get too big for his
britches. I mean clearly in this case people didn't
know COVID was coming. This is not like a bank robbery
that they planned two years and then pulled off the
heist; right? He was in over his head with these
businesses and then COVID hit, which prompted the
availability of the relief program. But for the
pandemic he might not be here today.
THE COURT: What businesses did he own and what
percentage and what was operating at the time COVID
hit?
MR. KNIGHT: So this is the complicated piece,
your Honor. To the best of my recollection, because I
always have to go back to the file and look at this,
there was a partner setup for On The Tracks in Berlin
where I believe that he participated as like a sort of
overall manager. What I actually don't know is if he
had a true bona fide ownership interest. I know that
he had, because the Government alleges that he had
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signed for his brother as an owner through a power of
attorney that had been drafted by an attorney so that
the brother could kind of be a silent partner, but his
name was not on the documents because he had the
record. So that was for On The Tracks. They
negotiated for Top Of The Bay, and then the Remington
House I believe was a similar setup, but I could be
wrong and the Government will correct me, but I'm
trying to pull the facts out of my head as best I
could.
THE COURT: Thank you.
MR. KNIGHT: And then in the conspiracy there's
this Dock Wireless thing which was Butziger's scheme.
So in the Indictment, Count I of the Indictment is four
entities; the other one is Butziger's.
Anything else?
THE COURT: I think you indicated that you
wanted Mr. Staveley's mother to speak briefly.
MR. KNIGHT: Yes. I don't know what order you
would --
THE COURT: She's next. She's part of your
allocution. Typically we don't, we ask they present
things by letter or affidavit, but we'll hear from her
briefly.
MR. KNIGHT: May she approach the podium? She's
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actually been vaccinated, tested negative before she
came in today.
THE COURT: Yes, then she can approach the
podium.
MS. SANBORN: Good morning, your Honor.
THE COURT: Good morning -- good afternoon, I
apologize. Go right ahead.
MS. SANBORN: Can you hear me?
THE COURT: I can now, yes.
MS. SANBORN: I have two things that I don't
have on this, my letter. When PPP was discussed, the
only thing I ever heard my son say to me was he wanted
10 hours a week for his people at On The Tracks. I
never heard about those other places at all. And the
second thing was that after David Butziger was, I guess
he was arrested, maybe had to be home, he came to my
house three or four times later at night and he had
someone else's car so they could not follow him on a
GPS. I don't know what he wanted when he was coming
here, except that I know that he did tell David to run,
just run, and --
THE COURT: Were you there for that? Did you
hear that, or are you telling me that's what David told
you?
MS. SANBORN: Those are the two things.
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My name is Judith Sanborn. Amidst the fear and
trauma of being in solitary confinement for 14,
15 months, we have been able to talk about his
responsibilities and errors, and he accepts them and
understands what he has to do to change his life in
order to survive. He has paid dearly for his mistakes,
both mentally and physically, but he is a very hard
worker, always has been, and I'm positive that he now
knows that he needs and wants help from other informed
sources. And in that light I have to tell you I am a
retired nurse, and PTSD was not something we ever had.
That didn't come out. So when he was out on probation
before, there was no help for him with PTSD. Medicine
like Zoloft is not an option for that particular
diagnosis. The main thing wrong with it is it
increases the risk of suicide. That's the first thing
on their contents.
Trauma of all kinds is the course of PTSD,
whether it's war or abuse of women and children, and
there is no easy, quick cure. And I have to tell you
that the probation department does nothing to help
people when they come out of -- are on probation. They
do nothing to help them with employment or housing or
anything.
The Cole Resource Center at McLean Hospital has
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been so helpful to me in order to understand this
tragedy and how I can support and help my son in his
long road of healing. They will have a plan ready for
him as soon as he is released, and they have given me a
list of trauma centers in the Boston area to which I
can bring him. They have group and singular therapy
sessions. They will help him with employment, which
will be extremely difficult because of misinformation
on the Internet and many of his records were not
sealed. It's tough because anybody can go on the
Internet and read his whole story, and I think some of
it is against his civil rights.
THE COURT: Go ahead.
MS. SANBORN: They will listen and help him work
through these problems. I can give him the safe and
peaceful environment, a place where he can learn to
sleep again to be able to think things through before
making a rash decision. Good nutrition and exercise
are also really important.
He has taken the first step in accepting his
responsibilities. The second step is accepting the
help of professionals, and he has already had the COVID
shot so he is ready to leave a place that is so full of
virus when nobody wears masks; and I think the last
figures were 27 percent had the injection, the rest
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have not got it, they will not get it.
He has always been ready to help people with
disabilities and now it's time for him to get help with
his.
I thank you for listening to me.
THE COURT: Thank you, Mrs. Sanborn.
Mr. Staveley, this is your opportunity if you'd
like to address the Court -- I'm sorry.
Mr. Knight, are you through?
MR. KNIGHT: I just want to say thank you. It's
been a long time since we've done a sentencing in
person, and I appreciate the Court's indulgence.
Do you want Mr. Staveley to speak from the
table? He's got ankle cuffs on.
THE COURT: Has he been tested today? No?
He can speak at the podium but with his mask if
he hasn't been tested this morning. If he has, that's
fine.
THE DEFENDANT: I was tested this morning, your
Honor.
THE COURT: Okay.
THE DEFENDANT: It's been a long 15 years. I
know I've made serious mistakes, poor judgments, and I
take responsibility for all that. I had never been in
jail before and I went -- (pause) -- and the
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(indecipherable) within six months.
THE COURT: Why don't you take a deep breath.
And Mr. Knight, you can maybe get a tissue for him
because we can't get a record if --
(Overlapping speech)
THE DEFENDANT: I understand.
THE COURT: Okay.
THE DEFENDANT: And after that unthinkable
happened, I think the hardest part is just coping, you
know, between people that don't want to believe you,
people that do believe you, people that found you
pathetic. But the hardest part, your Honor, is you
just hate yourself, you're a coward, and you run.
You're scared, you know, you live your life constantly
being scared. I'm not making excuses, but I just
always felt like I was behind the eight ball all the
time. And I made terrible decisions and not only in
relationships and things like that but, you know, every
time I thought there was a chance to get ahead I
listened and I did it and I, you know, and I, I'm just,
I'm sick of it.
These last 14 months, you know, the time that I
was in jail, because of what happened to me I spent
almost 30 months of it by myself in special housing
unit. So, you know, I've been running, I've been
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scared, and I've made terrible decisions and
(indecipherable) my life. I take responsibility for
that. It's my fault. It's my fault because I didn't
address my issues. I've been avoiding them forever.
And I know these last 14 months with COVID have just,
you know, the hardest part is I sit there and -- you
know, my mother is 81, she's the only family I have
left, and I have two kids I haven't seen for 10 years
because of what's happened to me. You know, I have no
friends, I have nothing; I just have my mom, and I
watched her struggle the last year while I was in
there. You know, if she falls, there's nobody to help
her because she's estranged from the whole family
because of me and I just, you know, it's time for me to
face this head-on. I can't, I can't do this any longer
physically, and I need to overcome it, you know?
And I'm sorry, I'm sorry about running. I was
just so damn scared. And, you know, all of a sudden it
sounds like a good idea. I don't know how else to
describe it. So, you know, it was not, it was not my
intention; it wasn't that I woke up one day and said I
want to do this. But, your Honor, I had five suicide
attempts in the last 12 years. You know, I just, it's
hard, it's hard to cope with the whole thing.
But I knew we were cutting corners. I knew --
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you know, you asked the question about the bank
relationship. Well, that's how we even found out about
PPP, it was the bank locally, they were an
administrator for it and that's how it ended up to us.
And we had a 941 for Berlin. That's a real
operating business and that location is just depressed,
it's in Massachusetts, and all these people were out of
work and we wanted them to get back to work. And that
was the first one that our attorney said this is, you
know, an opportunity for you, and we did it. And, you
know, and then I knew that corners were being cut and,
you know, I just was trying so hard to fight back and
didn't want to let my brother down or anybody else and
it just happened, you know, it just happened.
But, you know, I don't want to tell you -- I
wasn't even on the payroll with the company. Not one
bit of the money would've come to me. It was all going
to help people keep their jobs, you know. That was
what I always had. That was what it was going to be
for.
But I think I'm smarter in these last 14 months.
And Mr. Knight addressed it. Maybe it's my age, which
I just can't do this anymore. I can't physically do
this anymore. And I need to get better, I need to, you
know, (indecipherable) based on, take them on and fix
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myself. But I know I've made so many mistakes, but I
don't think I'm a mistake.
Thank you.
THE COURT: I have some questions for you if
your attorney is okay with you answering them.
MR. KNIGHT: Yes.
THE COURT: Okay. So obviously, Mr. Staveley,
you know what the Court's job is in sentencing; right?
THE DEFENDANT: Yes, your Honor, yes.
THE COURT: So I have some questions to sort of
get at some of the information that I'm not a hundred
percent clear on, okay, because when you said I
listened and I did it about this and about your prior
offenses as well. Is that what you're saying?
THE DEFENDANT: No. Prior offenses, I mean
they're all, the first offense -- both those offenses
go back to 2003. Mr. Vilker referenced it was a
baseball stadium, and I have to tell you I was a
basically PR guy and the next thing you know I ended up
involved in a business deal and I was sitting at a city
council meeting, and I was just so far over my head and
I, I made mistakes, and that's what I mean and I did
that.
And the second thing with the mortgage fraud was
my ex-wife and I, and you know, I could have, I could
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have sit there and not taken responsibility. I could
have done something, but I wasn't sending the mother of
my children to jail. I wasn't going to do that.
So while I was in jail, the next offense came up
and I took responsibility for it and just stayed more
time in solitary confinement.
The third one, what we're facing right now, this
all started, my nephew, to help him get back on his
feet and get started in something, and I needed help,
too. And my brother, out of the kindness of his heart
helped and --
THE COURT: In what way? In what way? Who is
your nephew and in what way?
THE DEFENDANT: So my nephew has issues and he's
my adopted nephew, and my brother has a heart of gold,
and my nephew liked cooking and he thought this would
give him a chance to get into it. And he also said for
me it would give me a job, because I bartend; that's
really my biggest thing. And I have history in the
broadcasting field, and I was working again. I had
just finally got a part-time job.
THE COURT: Where?
THE DEFENDANT: At a radio station, Cumulus
Radio in Worcester called The Pike.
THE COURT: When did that start?
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THE DEFENDANT: I was there for about 18 months.
It started part-time I guess July of '19 and just
part-time, I did like Saturday mornings and stuff like
that, but as I was there longer I started getting more
opportunities. And frankly when this whole thing
happened I had just been offered an opportunity to go
and work for them at another station down South and
have a full-time job, and that was my intention to go
there.
My brother was working another job and we hired
a general manager, somebody with restaurant experience
that was supposed to be running it. There was all
kinds of personality conflicts and stuff, and I would
be there to bartend. I didn't get paid; I just worked
on tips so we could keep overhead down. And, you know,
the person that was being the general manager was, also
I was in a personal relationship with her, and when we
had a falling out is when everything just went south;
and she was on the liquor license, so my brother had to
try to change the name on the liquor license and that's
where they all kind of hit at the same time.
THE COURT: So that was the Berlin restaurant.
THE DEFENDANT: That's correct, your Honor, yes,
an operating restaurant.
THE COURT: When did that close?
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THE DEFENDANT: So the liquor license probably
mid March of 2020 was in jeopardy, but the restaurant
was still a restaurant; it just didn't have a liquor
license. And the idea was when COVID came and the plan
was to try to keep some employees on and do takeout,
just do takeout, at least keep some people working.
And then this whole thing happened and it just shut
down.
THE COURT: So are you saying that -- when you
say this whole thing happened, you mean --
THE DEFENDANT: This case.
THE COURT: Yes. So the restaurant was still
operating, is what you're saying?
THE DEFENDANT: So the restaurant was, because
of COVID there was no business, right, nobody could
come in so it was closed for that. But the intention
was to reopen with takeout. They actually had a good
takeout business and just do takeout food and get some
employees back.
THE COURT: So when you submitted these
documents, did you submit the actual payroll for that
restaurant, or did you submit fraudulent payrolls for
that restaurant?
THE DEFENDANT: So that's kind of the
interesting part of this is we had payroll, a payroll
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company post payroll up there. So the 941 piece, yes,
I knew that Dave Butziger was doing them and it was
submitted. But I have to tell you honestly that's how
disorganized we were; we didn't even need it for
Berlin, but it somehow got submitted.
THE COURT: When you use the passive voice like
that, "it somehow got submitted", it just --
(Overlapping speech)
THE DEFENDANT: I don't --
THE COURT: -- disassociates yourself with
responsibility.
THE DEFENDANT: Oh, no, no, no. I have full
responsibility for it, your Honor, but what I'm saying
is that's how disorganized I am. The whole thing went
in when it didn't have to go in like that; it could
have -- you know, Berlin had its own little thing, so.
THE COURT: Okay. But you never had an interest
in any of the other places; is that correct?
THE DEFENDANT: I had no interest in any of
them.
THE COURT: One of my other questions is about I
think, if I understand what your attorney is arguing,
is that your PTSD has caused you to engage in this
fraudulent behavior in this case or at least
exacerbated behavior; is that --
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THE DEFENDANT: I wouldn't say that either, your
Honor. I think that, I think I'm -- I think I'm always
feeling like I have to get ahead, I have to work that
much harder than the other person because of my
criminal history and then of course what happened to me
personally. And I think that, you know, when the
opportunities arises I take it on as a cutting corner
and I hope -- you know, I always think my intentions
are good, but I end up making these huge mistakes and
errors in judgment. And it's my fault, it's my fault.
And the PTSD, I don't think that's necessarily why it
happens; I just think it's one of the many things in my
life that has put me in a situation that I feel needy,
you know, and --.
THE COURT: Okay. I don't think I have any
other questions.
Mr. Knight, based on my questions do you have
anything else you would like to add?
MR. KNIGHT: Judge, just this. This case, the
factual piece of this case has a ton of moving parts,
and I did not mean to suggest -- and if the Court took
it this way it was my fault -- that somehow his
diagnosis of PTSD contributed to him committing the
crime. That's not what I'm saying.
In my investigation of the matter, I described
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in the memo as I think getting in above your head is
the easiest way to say they were in a complete mess of
business. There is no doubt, because he pled to it,
that there was a conspiracy to provide falsified
information to the government in order to obtain PPP
money. I mean that is the crime, that is what he pled
guilty to, and I'm not saying that didn't happen.
But there is a swirling mass of interests and
agendas and personalities that surround that criminal
conduct, and I don't know what prompted what and who,
what and where and how it all came out. I get the
feeling, honestly I get the feeling in the case of a
bunch of amateurs trying to do too much with the
restaurant business, and I'll just leave it at that.
THE COURT: I did have two more questions for
your client, and you can decide whether or not you want
him to answer them.
MR. KNIGHT: Okay.
THE COURT: The first is when did he meet
Mr. Butziger and in what capacity, and the second is
whose idea was this.
(Pause)
THE DEFENDANT: I met Mr. Butziger through the
general manager for Berlin. He's a Rhode Island-based
guy and he was also the real estate broker on the
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transaction for Remington House. That's how I met
Mr. Butziger.
THE COURT: Okay. And whose idea was this?
THE DEFENDANT: The PPPs?
THE COURT: Yes.
THE DEFENDANT: I will tell you it's collective.
It came to us. My co-conspirator heard about it
through his bank, a local bank down here, and we had an
attorney in this deal that I mean he was recommended to
us, somebody that really knew the restaurant and liquor
license, and he was supportive of it, you know, that we
would apply for this, and -- but we all made the
decision. Like I was involved in the decision saying
yes, you know, I think we should apply for these, you
know. And I'm not going to tell you that I'm a stupid
man, but I didn't understand what it, what a PPP really
was at the end of the day. I mean I have a lot more
information now because of this case. But it's my
fault. I didn't research it, I didn't do my homework,
and I put myself in a situation to commit a crime.
THE COURT: When you were submitting these
things, did you ever own a piece of Remington House?
You personally, not your brother.
THE DEFENDANT: So if I can give you a little
history on that.
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THE COURT: Sure.
THE DEFENDANT: When Remington House started it
was going to be -- that was this gentleman that was our
general manager, he was from Rhode Island, from
Warwick, and he was the broker for the deal and the
deal was basically he would help us in Berlin if we
helped down in Warwick.
THE COURT: In what capacity? Helped how?
THE DEFENDANT: Well, he helped us because we
didn't really know the restaurant business. He was
from the restaurant business, his whole life worked in
it. And I met him, your Honor, when I was at a halfway
house and working for him at a pizzeria, you know, is
where I met the guy. And he was the only person I
knew, and that's how he got in and that's how I ended
up knowing about Remington House, because he's from
Warwick and we don't have any real connection to that
otherwise.
And then the adjacent property to the restaurant
was owned by the Butziger family, and that's how David
Butziger came in. He ended up doing all our IT work up
in Berlin as well, that's how he ended up in the deal,
and he's from Warwick. So, and what ended up happening
was to make the Warwick deal happen, the Butziger
property -- and this was based on the attorney telling
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us the Butziger property had to be part of the deal.
So that's how David Butziger came into the deal in
Warwick and ended up being a part of it.
THE COURT: Okay. Thank you.
THE DEFENDANT: Okay.
THE COURT: Mr. Vilker, I think you want to say
something.
MR. VILKER: Your Honor, I just want to provide
some clarity about our understanding of these different
restaurants and what was happening with each of them.
The On The Tracks restaurant in Berlin, Mr. Staveley
had had a piece of that. It wasn't a functional
restaurant. It closed down; the liquor license was
revoked March 10 of 2020. An e-mail went out to all
employees saying this restaurant is closed. I'm pretty
confident that none of them got their final paychecks,
my recollection; they all left, they were all fired,
and they went on to other jobs. A month later is when
on April 6th the PPP application was filed for On The
Tracks indicating at that particular time that it still
had 22 employees and it still had a payroll of 36,000.
So the suggestion that this money was going to try to
save these people, there were no jobs, there was nobody
working there at that time. The money would not have
gone to pay them. There was no business operating.
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The Remington, there was a company that
Mr. Staveley formed using his brother's name without
his brother's knowing it for Apponaug Restaurant Group
where the owner was Gregg Sanborn, Mr. Staveley's
brother, and that entity purchased the location of
Remington House. So they actually owned, through his
brother owned the actual property, and they were in the
process of doing some renovations, is my understanding,
and with the hope of it reopening at some point in the
future as an actual restaurant when COVID hit. But
they had no, never had any employees; and the
application they submitted, they, Mr. Staveley and
Mr. Butziger submitted said they had 18 employees and
an average monthly payroll of 46,000. There were no
employees. But at least those two there was some
actual connection with those restaurants.
The third restaurant, Top Of The Bay,
Mr. Staveley, again pretending to be his brother,
Gregg, was in negotiations for a while with the owner,
actual owner of the Top Of The Bay restaurant to
purchase that restaurant as well. Those negotiations
fell through for whatever reason. The deal never
happened. And then a month or two after that is when
he, Mr. Staveley, submitted his application saying that
that restaurant was up and running and had all these
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employees and monthly payroll.
So I know there's a lot of moving parts here,
but the bottom line is there are no actual employees
who would have gotten any of this money.
THE COURT: Thank you. Thank you, Mr. Vilker.
Mr. Vilker, with respect to Counts II
through VI, do you have a motion?
MR. VILKER: Yes, your Honor. The Government
does move to dismiss Counts II through VI.
THE COURT: Obviously I'm assuming no objection,
Mr. Knight.
MR. KNIGHT: No, your Honor.
Can I just add one factual piece that I think is
important.
THE COURT: Sure.
MR. KNIGHT: I just want to put it out there so
we're all thinking about PPP in the same terms. PPP
was designed, it's called the Paycheck Protection
Program, but it allowed expenses were for other things
as well, rent, utilities, keeping the lights on, that
sort of thing, and all sorts of rules about how to be
used and forgiveness, and there were percentages for
payroll. So even though it's got the fancy name, the
idea behind the legislation was to fund businesses,
business operations including payroll.
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Thank you, Judge.
THE COURT: Thank you, Mr. Knight.
Mr. Staveley, after calculating the guidelines
and hearing argument from your counsel, the Government,
I heard from your mother and from you, it's my job to
consider the relevant factors that are set out in
18 USC 3553(a) and ensure that I impose a sentence
sufficient but not greater than necessary to comply
with the purposes of sentencing. And those purposes
include some of the things you've heard your attorney
and the attorney for the Government discuss today,
including the need for the sentence to reflect the
seriousness of the offense, to promote respect for the
law, to provide just punishment for the offense, and
the sentence should also deter criminal conduct,
protect the public from future crimes by the defendant,
and promote rehabilitation. And so I have to consider
the nature and circumstances of the offense, your
history and characteristics, as well as things like the
need to avoid unwarranted sentencing disparities among
similarly situated defendants and the types of
sentences that are available to me.
This sentencing I think presents a very
difficult situation for me. I'm going to tell you some
of the things that I see from this. While I understand
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what your attorney is arguing, that the PPP provided
for things from the government in addition to the
support of paychecks, all of those things were in order
to ensure that people -- whose jobs had been yanked out
from under them in the middle of an unprecedented
pandemic -- were able to feed their families, keep
their lights on at home, pay their rent, and survive
themselves, feed their children. So while, yes, other
things were permitted, it was clearly money and it was
a finite source of money that was intended for a
purpose, none of which was the purpose that you sought
out to get the money for, and I think it's pretty clear
that you knew that and that you and your Co-Defendant
conspired to take that money anyway.
If you had provided just one application for
On The Tracks on April 6th, I might give more
credibility to your argument that you thought -- you
started off doing the right thing or thinking you were
doing the right thing with that restaurant. The
Government tells me, and I have nothing different on
the record, that you'd already closed that business a
month before, well, March 10th, that you sent or
someone on that business's behalf had sent an e-mail to
everybody saying no more job, you're terminated. So I
find it hard to believe that the money from that
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application was going to be used to reemploy those
people or even to just pay them while they were out of
work; especially because with enough time that had
passed, I assume they had already either gotten other
jobs or applied for, if they qualified, unemployment.
But if you had only applied on April 6 for
On The Tracks, that would have been one thing. But on
April 6, the same day, it appears to me that you filed
fraudulent applications for two other businesses that
you had no connection to, no payroll connection to.
One of them, Remington House, as I understand what the
Government and your attorney have argued, is that in
your brother's name, without his permission, you had
purchased the building and that there was never a
payroll that you were responsible for in that building.
It closed sometime in 2018, and you submitted the first
application for Remington House or I believe you -- it
was for the Apponaug Restaurant Group doing business as
Remington House, also on April 6, 2020. And you also
submitted a fraudulent loan application on that same
day for the Top Of The Bay restaurant on April 6th with
fraudulent payroll records for a business that you
never had any ownership interest, and not even through
your brother, because you were just negotiating as your
brother to buy the restaurant.
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So I don't buy the argument that you kind of
got swept up in this and you intended to do the right
thing with this money. I don't think there's anything
in the record that shows that, frankly, and so what I
think you did was you saw an opportunity with a big pot
of money that, yes, the media told us about multiple
times, and you saw an opportunity to go in and get
money that you weren't entitled to. If your true
intention was to pay people, you didn't have to do
anything but On The Tracks, and if that was the only
fraud that was here we would be in a very different
situation. And I realize you didn't get any of the
money; but had you gotten all of that money, there were
no employees of yours to pay from Top Of The Bay or
Remington House, so that argument rings hollow and
honestly I don't buy it, Mr. Staveley.
So while I think you have accepted
responsibility enough to earn those points, in reading
through the presentence report provided by Probation,
there's an awful lot of it was someone else's fault;
including today when you said our bank, that's how we
got involved, our bank reached out to us. That
argument might fly if you were a young man or
uneducated or you hadn't been through this all before.
But you have, more than once, and you did it knowing
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what the consequences were: It's federal prison. You
knew it. You signed things under penalty of perjury,
and you've done it before.
Your counsel tells us the case of Her Majesty
v. Dudley and Stephens and argues that that case is
about compassion, and I think in some ways it is about
compassion. I think it's also about necessity. But I
don't see you as the same as Dudley and Stephens. To
me in that scenario, Mr. Staveley, you're the person
who in that scenario if you had come in, killed the
cabin boy, ate all of him for yourself and left the
others to die, that's the equivalent of what you did
here. You didn't kill the cabin boy to protect your
life and the life of the other people in the life boat,
to use your attorney's analogy. So while I understand
what he's saying, and I agree on some level that
compassion doesn't have as big a role in sentencing as
it should, I'm not sure that comparing you to Dudley
and Stephens in this case is an appropriate comparison.
I know that you've indicated that you made
serious mistakes and that you've exercised poor
judgment, and I appreciate that here today. The
difficulty here and the argument the Government makes
is that there needs to be deterrence. And the reason I
asked about the first, you know, that this was the
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first Payroll Protection Program prosecution is because
it happened a week after these loans became available.
It wasn't that you got desperate, you had no money, you
didn't know what to do, you were trying to help the
people at On The Tracks and you hesitated but then you
went ahead with what you knew to be fraud to help other
people. This was a get rich quick, make an easy buck
scheme, and that's exactly what it reads like, frankly,
and that's exactly what it was.
I think that because of, you know, unfortunately
nobody knew in March and April of 2020 how long the
pandemic would be going on or how much businesses would
suffer; but the reality is that they have, a lot of
people suffer, people have become homeless, and the
government has provided these monies to try to tide
people over through a time of economic hardship in a
national emergency. I can't give you a higher sentence
because the pandemic has gone on longer, and I don't
think that that's anything that anybody would have
anticipated at that time.
And then when it came time to -- when you got
arrested and you were given pretrial release and the
time was then to start to think about the way that you
had done things, you cut off your bracelet and you
fled. You did it while you were living with your
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mother, so you weren't desperate. And then, even then
you said that it wasn't your fault, that Mr. Butziger
talked you into doing it and that you blacked out and
you woke up in Georgia. But there were two months in
between there during which time you were fraudulently
living or using other identifications and you knew that
you were not legitimately where you were supposed to
be. So I find it difficult to understand what
motivates you to do these things, but more than that
what motivates you to then sort of step back on the
responsibility and say, well, Mr. Butziger told me to
cut off my bracelet and I blacked out and the bank sent
me the application things. It just, it defies logic
that someone would do this and then say that they were
accepting responsibility.
But I am also mindful of the other factors under
3553(a) besides deterrence of you and deterrence of the
public; and that the idea that you're an individual
human being who deserves individual sentencing is
absolutely true, that you deserve my compassion and the
compassion of this court is absolutely true as well,
and you have that.
The fact that serving time in prison for you is
more difficult because of the PTSD and the things that
you've been through, it is something that is awful and
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that this Court cannot pretend to understand, but it's
also a risk that you knew you were taking at the time
that you were engaging in this behavior. So if you
were, as I said, uneducated, somebody in their 20s,
this was your first offense, I think a lot of these
arguments would cut in your favor. But I think because
of your age, your educational background, you're
telling us you were legitimately working, even though
it was part-time in a broadcasting job for 18 months
before COVID, my understanding is you were living with
your mother, you weren't homeless, you weren't
desperate, and so I think those factors cut against
you, frankly, Mr. Staveley.
I think that the Government's recommendation is
appropriate and I think it is the proper sentence in
this case. It isn't an easy sentence, but you've had
sentences of 30 months and I think 24 months before,
and it hasn't deterred you and it hasn't caused you to
look inward at your own behavior, you know, it hasn't
caused you to do or look at what you're doing to your
mother or your brother.
So while I think that the Government could have
argued against the three-level reduction for acceptance
of responsibility, they've agreed to it, and I've given
that to you, and they've recommended what I think is a
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very fair sentence at the mid range of the resulting
guideline range.
So on Count I of the Indictment I am going to
sentence you to 44 months of incarceration and on
Count II -- on Count VII I'm going to sentence you to
12 months of incarceration to be served consecutively
with that 44 months for a total of 56 months of
imprisonment.
I am going to sentence you -- I'm going to order
that you serve three years of supervised release upon
your release from prison and that will be concurrently
on each count. I'm not going to impose a fine in this
case because I don't think that it's appropriate and I
don't think that that is something that would be
(indecipherable) at this point that when you're
released from prison would be in any way helpful to
you. I am required to assess $200 in special
assessments for the two counts in this case, and I will
do that.
As your attorney requested, I am going to
recommend that you serve your sentence as close to the
state of Rhode Island, as your mother, as possible. I
believe she's in Massachusetts. And I think if
possible, I'm going to ask the Bureau of Prisons to
consider sending you to serve your sentence at Devens
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in Massachusetts if that's available. And I'm sure
Mr. Knight has told you I can make recommendations but
I can't tell them where to send you, but that is my
strong recommendation.
When you're released on supervised release, your
conditions will include that you shall refrain from
alcohol use; that you'll participate in substance abuse
testing, in substance abuse testing to include alcohol
testing, up to 72 drug tests per year; that you'll
participate in a program of mental health counseling as
directed and approved by Probation; and that you'll
participate in a manualized behavioral program as
directed by the United States Probation Officer; and
you'll contribute based on your ability to pay for any
of those treatments. You're also to provide access to
all financial information requested by your supervising
probation officer, including, but not limited to,
copies of all federal and state income tax returns and
all tax returns must be filed in a timely manner.
You will -- while you are on supervised release
you are not to open any new lines of credit, and that
includes not leasing any vehicles or any other
property, and you're also not to use any existing
credit resources without the prior approval of your
supervising probation officer. You're also to maintain
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one checking account and all of your income or monetary
gains or other pecuniary proceeds are to be deposited
into that account, and you'll disclose those things to
Probation as appropriate.
There's no restitution in this case, but until
you pay the $200 special assessment you're not
permitted to sell or give away or convey any asset
worth more than a thousand dollars without prior
approval of Probation until that $200 assessment is
paid. And you're also not to hold employment that has
any fiduciary responsibility during your supervision
without first notifying the employer of this conviction
and without approval of your supervising probation
officer, and that includes self-employment; and you're
to cooperate with Probation in the investigation and
approval of any position of self-employment, so you
have to get approval for that before you're able to be
self-employed while out on supervised release.
I recognize, Mr. Staveley, that this is not a
light sentence and that it's more than I'm sure that
you had hoped for, but under all of the circumstances
contained in the presentence report and your sentencing
memos and the allocution, your allocation and the
statements of the Government, I think it is the fairest
and most appropriate sentence that I can impose in this
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case.
You have also pursuant to the plea agreement
waived or given up your right to appeal the sentence if
it was within or below the advisory guideline range,
and since it is within the range your right to appeal
has been waived. And you can speak to Mr. Knight about
that and he can explain it to you further.
Is there anything else?
MR. VILKER: No, your Honor. Thank you.
MR. KNIGHT: No, your Honor.
THE COURT: We'll be in recess.
(Adjourned)
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C E R T I F I C A T I O N
I, Denise P. Veitch, RPR, do hereby certify
that the foregoing pages are a true and accurate
transcription of my stenographic notes in the
above-entitled case.
/s/ Denise P. Veitch_
Denise P. Veitch, RPR
Federal Official Court Reporter
February 21, 2022
Date
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