Two businessmen have been charged with defrauding the federal relief program meant to help small businesses pay their employees during the pandemic, U.S. Department of Justice officials announced Tuesday.

According to prosecutors, David A. Staveley, 52, of Massachusetts and David Butziger, 51, of Rhode Island lied on bank applications for loans from the Paycheck Protection Program. The $649 billion relief measure is intended to keep businesses afloat amid closures and disruptions caused by the spread of the novel coronavirus.

But prosecutors allege Staveley, also known as Kurt D. Sanborn, and Butziger sought a total of more than $500,000 in relief to pay employees at businesses that were either fictitious, closed, or owned by someone else. Staveley is charged with aggravated identity theft, and Butziger with bank fraud. Both men also face conspiracy charges.

Staveley and Butziger were arrested on Tuesday and released on unsecured bonds after making their initial appearances.

U.S. Attorney Aaron L. Weisman said during an online press conference on Tuesday that the first of its kind case follows Attorney General William Barr’s March directive telling federal prosecutors to go after coronavirus-related schemes.

The case, filed in Rhode Island, also involved prosecutors from the DOJ’s Fraud Section in Washington, D.C., a unit that targets complex frauds.

Brian Benczkowski, chief of the DOJ’s criminal division, said in a statement Tuesday that his division, which includes the Fraud Section, is working with other law enforcement agencies to go after fraud targeting the funds Congress allocated for pandemic relief in the Coronavirus Aid, Relief and Economic Security Act, known as the CARES Act.

“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,” Benczkowski said.

The case involved the inspector general’s offices of the Small Business Administration and the Federal Deposit Insurance Corporation, as well as the FBI and criminal investigators from the IRS.

The investigation started three weeks ago on a tip to local police that Staveley had used his brother’s name to purchase land in Warwick, Rhode Island, where a shuttered restaurant sat.

Prosecutors now say that in April, Staveley posed as his brother, Gregg Sanborn, to apply for PPP loans totaling more than $430,000 for three restaurants, including Remington House, the Warwick restaurant that had been closed since 2018.

Staveley is also accused of seeking funds to pay employees at Top of the Bay, a restaurant he had no connection to, and On the Trax, a restaurant in Massachusetts that Staveley had run in his brother’s name but which closed on March 10 after its liquor license was revoked.

According to the charging documents, Staveley and Butziger discussed the scheme via email, talking about how to “dream up” the needed financial documents.

Prosecutors accuse Butziger of filing for a PPP loan worth more than $100,000 on behalf of a company called “Dock Wireless.” An undercover FBI agent posing as a bank compliance officer recorded a call in which Butziger claimed the business had several employees. However, the supposed employees later told agents they never worked for the company, according to an agent’s affidavit supporting the charges.

Staveley was also allegedly caught on tape. In what FBI agent Christina Grady called “an ironic twist,” Staveley is described as complaining to an undercover agent that large businesses had gotten more access to PPP funds, saying “the whole thing has become a little bit of a sham.”

Staveley has previous federal convictions. Before changing his name from Kurt Sanborn, he pled guilty in 2008 to submitting false invoices for work constructing a minor league ballpark and copped to fraud charges in 2014 for lying in order to obtain $685,000 in loans.

The government is represented by Lee H. Vilker of the U.S. Attorney’s Office for the District of Rhode Island, and Lawrence Atkinson of the DOJ’s Criminal Division.

Counsel information for the defendants was not immediately available on Tuesday.

The case is U.S. v. Staveley, case number 1:20-mj-34, in the U.S. District Court for the District of Rhode Island.