Court filing
Exhibit A - Plaintiffs' Proposed Third Amended Complaint — Marshall v. Prestamos CDFI, LLC (Dkt. 106-2, E.D. Pa. No. 5:21-cv-04337)
Filed May 1, 2024 in Marshall v. Prestamos CDFI, LLC; one of 344 filings from this case.
Record facts
| Court | U.S. District Court for the Eastern District of Pennsylvania |
|---|---|
| Filed | 2024-05-01 |
U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 106-2 · 2024-05-01 · Docket on CourtListener
Full text
Case 5:21-cv-04337-JMG
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EXHIBIT A
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IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
ALICIA MARSHALL, DANIEL
PRONSKY, PARIS TOWNSEND,
NANCILEE HOLLAND, LEONA
OWSLEY, KOLAWOLE AHMADOU,
KIANA DERVIN, KRISTINA
HENDERSON, DUSTIN INNIS, KELLY
STALNAKER, JAMIE JONES,
GEORGINA DREVNAK, JOHN MARTIN,
EZRA BEATTIE, GREGORY LLOYD,
ALYSHIA JOHNSON, LAMETRIA
MARVEL, GUY GRICHAR, JAHBRAEL
HORNE, ENOBONG ETUKNWA, and
SHARON BRADLEY SMITH, individually
and on behalf of all others similarly situated,
Civil Action No. 5:21-cv-04337-JMG
THIRD AMENDED CLASS ACTION
COMPLAINT
JURY TRIAL DEMANDED
Plaintiffs,
v.
PRESTAMOS CDFI, LLC and CHICANOS
POR LA CAUSA, INC.,
Defendants.
Plaintiffs Alicia Marshall, Daniel Pronsky, Paris Townsend, Nancilee Holland, Leona
Owsley, Kolawole Ahmadou, Kiana Dervin, Kristina Henderson, Dustin Innis, Kelly Stalnaker,
Jamie Jones, Georgina Drevnak, John Martin, Ezra Beattie, Gregory Lloyd, Alyshia Johnson,
Lametria Marvel, Guy Grichar, Jahbrael Horne, Enobong Etuknwa and Sharon Bradley Smith
(collectively, “Plaintiffs”), individually and on behalf of all others similarly situated, file this
Third Amended Class Action Complaint and Jury Demand for damages and equitable relief
against defendant Prestamos CDFI, LLC (“Prestamos”) and Chicanos Por La Causa, Inc.
(“CPLC”) (collectively, “Defendants”) for their respective role in failing to fund approved
Paycheck Protection Program (“PPP” or the “Program”) loans. In support, Plaintiffs make the
following allegations based upon information and belief except as to the allegations pertaining to
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the Plaintiffs which are based on personal knowledge. Plaintiffs’ information and belief is based,
among other things, on the ongoing investigation of their undersigned counsel which included,
without limitation, a review of applicable documents, publicly-available information concerning
the PPP and PPP loans, discovery in this litigation which remains ongoing and media and other
information, including information available on the Internet. Plaintiffs believe that substantial
additional evidentiary support will exist for their allegations after additional discovery pursuant
to the discovery and other deadlines set by the Court. In addition, by Order on December 5, 2023
(ECF No. 93), the Court granted CPLC’s motion to dismiss on grounds of personal jurisdiction.
Plaintiffs accordingly include CPLC as a defendant in this amended complaint to the extent
relevant to Plaintiffs’ claims against defendant Prestamos, and to preserve Plaintiffs’ rights in the
event of an appeal.
Summary of the Claims
1.
Following the worldwide outbreak of COVID-19, Congress passed the
Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) to, among many other
things, provide some relief to America’s small businesses and sole proprietors through the
creation of the PPP.
2.
Administered by the United States Small Business Administration (“SBA”), the
PPP was established to provide hundreds of billions of dollars of potentially forgivable loans to
small businesses and sole proprietors in a quick and efficient manner using a standard form note
and accompanying loan agreement documents that Plaintiffs and other PPP borrowers entered
into with Prestamos.
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3.
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To ensure that small businesses and sole proprietors received PPP loan proceeds
quickly, the applicable provisions of the PPP required lenders to timely fund PPP loans
following SBA approval of the loan.
4.
Lenders that participated in the Program were entitled to fees payable by the SBA
for each PPP loan the lenders processed.
5.
Defendant Prestamos was one of the SBA’s authorized PPP lenders.
6.
In 2020, Prestamos processed 935 PPP loans totaling less than $27 million gross,
thereby reportedly receiving $1.3 million in fees.
7.
Defendant Prestamos is and during all times relevant was wholly owned by its
corporate parent, CPLC. CPLC at all times relevant controlled and dominated defendant
Prestamos and Prestamos’s PPP lending; shared certain of the same senior executives and
directors; had a website that referred to and promoted Prestamos; publicly held out the
companies as one and the same and repeatedly referred to them as “CPLC Prestamos” in CPLC’s
Fiscal Year 2019-2020 Annual Report “A Chance to Change the World.” See CPLC FY19-20,
Annual Report, at 7, available at https://cplc.org/assets/files/publications/CPLC%20FY1920%20Annual-Report.pdf (last visited May 1, 2022)) (“During the pandemic, CPLC Prestamos
is administering Paycheck Protection (PPP) loans to help small businesses keep their doors
open.”) (emphasis added); reported on CPLC’s own financial statements that it received
hundreds of millions of dollars in PPP loan processing fees; and is headquartered in a building
that is virtually adjacent to Prestamos’s headquarters. See https://cplc.org/ (CPLC located at 1112
E. Buckeye Road, Phoenix, AZ); https://www.prestamosloans.org/phoenix/ (Prestamos located at
1024 E. Buckeye Road, Phoenix, AZ). In addition, CPLC is represented by the same two law
firms that represents Prestamos in this litigation.
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8.
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In 2021, after the SBA substantially increased the fees lenders would receive for
PPP loans made in 2021, CPLC caused Prestamos to exploit that increased fee opportunity by
dramatically ramping up its participation in PPP lending. Defendants were hugely successful in
that respect.
9.
In particular, in 2021 alone, Prestamos exponentially expanded its PPP lending,
reportedly processing 494,415 PPP loans totaling over $7.6 billion through May 31, 2021 -more PPP loans than any other lender in 2021, and more than the total number of PPP loans
made in 2021 by Bank of America, PNC Bank, TD Bank and Wells Fargo combined. See
Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021, at 7, available at
Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021 (sba.gov) (last
visited Sept. 21, 2021).
10.
As a result, Prestamos reportedly received nearly $1.2 billion in fees in 2021. See
Stacy Crowley & Ella Koeze, How Two Start-Ups Reaped Billions in Fees on Small Business
Relief Loans, N.Y. Times, June 27, 2021, Updated Oct. 11, 2021, available at
https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html (last
visited May 1, 2022). Prestamos also reportedly shared certain of those fees with its lender
service provider Blueacorn, but still obtained on a net basis hundreds of millions of dollars from
those fees.
11.
Although Prestamos and not CPLC was the SBA-approved PPP lender, CPLC and
its senior personnel also participated in, and controlled and directed Prestamos’ PPP lending and
was the alter ego of Prestamos. Thus, Prestamos upstreamed all or the bulk of its PPP lender
processing fees directly to CPLC and CPLC, in turn, booked and disclosed at least some portion
of those fees in CPLC’s own financial statements.
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12.
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In particular, according to CPLC’s own Consolidated Financial Statements and
Supplementary Information for the year ended June 30, 2021 (the “Financial Statements”), “[f]or
each approved PPP loan, the Small Business Administration (SBA) covered a percentage of the
loan principal balance as a loan processing fee to the organization. The fee is amortized through
the term of each PPP loan. As of June 30, 2021, the Organization received $314,260,826 from
SBA, $5,086,196 was recognized as loan fee revenue and $309,174,630 was recorded as deferred
revenue.” See ProPublica, Chicanos Por La Cause Inc., Consolidated Financial Statements, p.20
Year Ended June 30, 2021, available at
https://projects.propublica.org/nonprofits/display_audit/11175820211 (last visited May 2, 2022)
(emphasis added).
13.
In flagrant disregard of its contractual loan agreement obligations to Plaintiffs and
other class member borrowers, however, Prestamos failed to actually fund class member
borrowers’ SBA-approved PPP loans.
14.
Plaintiffs and thousands of other business owners each timely applied for PPP
loans with Prestamos, had their loans approved by the SBA and assigned PPP loan numbers,
completed and submitted all information concerning their PPP loans, and yet never were paid
their PPP loan funds by Prestamos although Prestamos falsely reported to the SBA that it
disbursed those loan proceeds to these borrowers in order to collect the loan processing fee from
the SBA.
Parties
15.
Plaintiff Alicia Marshall (“Marshall”), a natural person residing in Sacramento,
California, is a sole proprietor of an in-home healthcare business.
16.
Plaintiff Daniel Pronsky (“Pronsky”), a natural person residing in Reading,
Pennsylvania, is a sole proprietor of a food catering business.
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17.
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Plaintiff Paris Townsend (“Townsend”), a natural person residing in San
Bernadino, California, is a sole proprietor in the business of making and selling hair care
products.
18.
Plaintiff Nancilee Holland (“Holland”), a natural person residing in Greenwich,
Connecticut, is a sole proprietor of a real estate agency.
19.
Plaintiff Leona Owsley (“Owsley”), a natural person residing in El Dorado
Springs, Missouri, is a sole proprietor of a construction business.
20.
Plaintiff Kolawole Ahmadou (“Ahmadou”), a natural person residing in Evanston,
Illinois, is a sole proprietor of an in-home healthcare business.
21.
Plaintiff Kiana Dervin (“Dervin”), a natural person residing in Lynnwood,
Washington, is a sole proprietor of a janitorial business.
22.
Plaintiff Kristina Henderson (“Henderson”), a natural person residing in Macomb,
Michigan, is a sole proprietor of a clothing business.
23.
Plaintiff Dustin Innis (“Innis”), a natural person residing in Las Vegas, Nevada, is
a sole proprietor of a carpet and upholstery cleaning business.
24.
Plaintiff Kelly Stalnaker (“Stalnaker”), a natural person presently residing in
Arizona but previously and at all applicable times residing in Ravenna, Ohio, was a sole
proprietor of a homemaker/personal care provider business.
25.
Plaintiff Jamie Jones (“Jones”), a natural person residing in Golden Valley,
Arizona, is a sole proprietor of a delivery service.
26.
Plaintiff Georgina Drevnak (“Drevnak”), a natural person residing at all times
relevant in Colorado Springs, Colorado, was a sole proprietor of a housekeeping business.
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27.
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Plaintiff John Martin (“Martin”), a natural person residing at all times relevant in
Midvale, Utah, is a sole proprietor of a driving service.
28.
Plaintiff Ezra Beattie (“Beattie”), a natural person residing at all relevant times in
Fort Worth, Texas, is a sole proprietor of a construction business.
29.
Plaintiff Gregory Lloyd (“Lloyd”), a natural person residing at all relevant times
in Houston, Texas, is a sole proprietor of a computer service business.
30.
Plaintiff Alyshia Johnson (“Johnson”), a natural person presently residing in
Harvey, Illinois and formerly and at all times relevant residing in Merrillville, Indiana, is a sole
proprietor of a homecare business.
31.
Plaintiff Lametria Marvel (“Marvel”), a natural person residing at all relevant
times in Natchez, Mississippi, is or was a sole proprietor of a cosmetics business.
32.
Plaintiff Guy Grichar (“Grichar”), a natural person residing at all relevant times in
Stigler, Oklahoma, is a sole proprietor of a driving service.
33.
Plaintiff Jahbrael Horne (“Horne”), a natural person presently residing in Virginia
Beach, Viginia and formerly and at all times relevant residing in New York, is a sole proprietor
of a music business.
34.
Plaintiff Enobong Etuknwa (“Etuknwa”), a natural person residing in Houston,
Texas, is the sole proprietor of a used car business.
35.
Plaintiff Sharon Bradley Smith (“Smith”), a natural person residing in Houston,
Texas, is a sole proprietor of a food catering business.
36.
Defendant Prestamos is a limited liability company organized under the laws of
the state of Arizona, having its principal place of business at 1024 E. Buckeye Road, Suite 270,
Phoenix, Arizona 85034, with additional offices in Tucson, Arizona, Las Vegas and Reno,
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Nevada, and Santa Fe, New Mexico, according to its website. See Prestamos Locations,
available at Prestamos Locations (prestamosloans.org) (last visited May 1, 2022).
37.
Defendant CPLC is a corporation organized under the laws of the state of
Arizona, having its principal place of business at 1112 E. Buckeye Road, Phoenix, Arizona
85034. CPLC is registered in Arizona purportedly as a domestic nonprofit corporation. See Ariz.
Corp. Comm’n, Entity Information, available at
https://ecorp.azcc.gov/BusinessSearch/BusinessInfo?entityNumber=00758057 (last visited May
1, 2022).
38.
CPLC’s former CEO and President at all times relevant to the claims alleged
herein and throughout 2021 was David Adame (“Adame”). Also at all times relevant to the
claims alleged herein and throughout 2021, Adame served on Prestamos’ Board of Directors and
Community Advisory Board. On or about October 6, 2023, which was just a week before CPLC
filed its motion to dismiss on October 13, 2023 and accompanying papers (ECF Nos. 84-85),
Adame “resigned from his position of President and Chief Executive Officer” of CPLC amid
allegations of financial malfeasance. See https://www.cplc.org/blog/viewpost.php?id=1162 (last
visited Oct. 24, 2023); Arizona Independent, Allegations of Fraud Haunt Chicanos Por La Causa
As Adame Exits (Oct. 5, 2023) (“While the organization released a statement claiming that
Adame left to ’pursue other opportunities,’ sources say allegations of financial malfeasance
preceded his exit.”), available at https://arizonadailyindependent.com/2023/10/05/allegations-offraud-haunt-chicanos-por-lacausa-as-adame-exits/ (last visited Oct. 24, 2023).
39.
Adame was succeeded as President and CEO of CPLC by Alicia Nunez
(“Nunez”), who was then appointed CPLC’s interim President and CEO, and formerly and at all
times relevant to Prestamos’ PPP lending served as CPLC’s Executive Vice President and CFO.
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On or about April 24, 2024, Nunez was appointed CPLC’s President and CEO.
Jurisdiction & Venue
40.
This Court has jurisdiction under the Class Action Fairness Act because at least
one member of the proposed class is a citizen of a different state than defendants Prestamos and
CPLC; there are more than 100 members of the proposed classes; and the aggregate amount in
controversy exceeds $5,000,000.00 exclusive of interest and costs. See 28 U.S.C.
§ 1332(d)(2)(A).
41.
This Court also has jurisdiction over defendant Prestamos because Prestamos had
substantial and direct contacts in this District by virtue of its agreement to fund plaintiff
Pronsky’s PPP loan; by entering into PPP loan agreements with numerous other PPP borrowers
in this District; by committing to fund the PPP loans under the contractual loan agreements it
entered into with plaintiff Pronsky and numerous other PPP borrowers in this District; by its PPP
loan underwriting and review activities in connection with the PPP loans of borrowers in this
District; by obtaining PPP loan processing fees on PPP loans committed to borrowers in this
District; and by virtue of its communications and activities it undertook in this District and
concerning PPP applicants and borrowers in this District relating to PPP loans, PPP loan
forgiveness, interest on PPP loans and PPP loan processing fees. See SBA, Paycheck Protection
Program (PPP) Report, Approvals through 5/31/2021, p. 7, available at
https://www.sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-508.pdf (last
visited May 1, 2022). Further, this case was filed on October 1, 2021 and, despite lodging
numerous other challenges, defendant Prestamos has not challenged personal jurisdiction and is
estopped from doing so now.
42.
More particularly, and for further detail, defendant Prestamos committed to fund
at least 10,553 separate SBA-approved PPP loans through May 31, 2021 for qualified borrowers
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residing in this District alone, for total PPP loan proceeds of at least $166 million according to
the SBA’s own publicly available PPP loan data. See SBA, PPP FOIA, available at
https://data.sba.gov/dataset/ppp-foia (last visited May 1, 2022).
43.
Assuming that each such loan PPP loan generated loan processing fees of at least
$2,500.00 per loan, this means that defendant Prestamos obtained at least $26,382,500.00 in total
PPP loan fees on the backs of resident business owners located in this District (10,533 x
$2,500.00).
44.
In connection with each of the numerous PPP loan agreements and millions of
dollars in lender processing fees with borrowers in this District, defendant Prestamos
purposefully availed itself of substantial and direct business activity in this District sufficient to
subject itself to the personal jurisdiction of this Court.
45.
Further, for each such PPP loan, defendant Prestamos’s role was not limited to
entering into the standard form loan agreement contracts and funding the loans for Plaintiffs and
other putative class member borrowers. In addition, Prestamos’s role as the SBA-approved
lender of PPP loans required it to underwrite and review each PPP loan individually. According
to applicable regulations:
“The lender, however, must do some basic ‘underwriting.’ Specifically,
the PPP Regulations contain a section titled, “What do lenders have to do
in terms of loan underwriting?” [86 Fed. Reg.] at 3707–08. The
regulations enumerate four ‘underwriting’ steps:
(1)
confirm receipt of the borrower certifications in the Form 2483
application;
(2)
confirm receipt of documentation showing employment status of
the applicant or if a business, documents showing employees as of
February 2020;
(3)
confirm the historic payroll (if the applicant had employees) by
examining the documentation submitted; and
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(4)
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comply with the Bank Secrecy Act (“BSA”) or similar anti-money
laundering procedures, such as a customer identification program
(“COP”), designed to make sure the lender confirms the identity of
the applicant.
Id. In addition to the above steps, the lender was obligated to ‘review’ each application.
Id. at 3708 (‘Each lender’s underwriting obligation under the PPP is limited to the items
above and reviewing the ‘Paycheck Protection Borrower Application Form.’).”
46.
Accordingly, this Court also has personal jurisdiction over defendant Prestamos
by virtue of the underwriting and review process that Prestamos necessarily had to do as to each
PPP borrower in this District, including but not limited to plaintiff Pronsky and the thousands of
additional PPP borrowers in this District.
47.
CPLC controlled, directed and participated in Prestamos’ conduct in PPP lending
even though Prestamos was the SBA-approved and qualified PPP lender; directed Prestamos to,
and Prestamos in fact did, “upstream” to CPLC hundreds of millions of dollars in PPP loan
processing fees Prestamos obtained from the PPP loans of Plaintiffs, class members and other
borrowers as if CPLC and Prestamos were one and the same company; referred to CPLC and
Prestamos as “CPLC Prestamos CDFI” and “CPLC PRESTAMOS LOAN PRODUCTS”;
shared senior executives and directors with Prestamos and overlapping websites that promoted
each other; controlled Prestamos which was at all times relevant CPLC’s wholly-owned
subsidiary; was Prestamos’ alter ego at all times relevant in connection with PPP lending;
participated directly in PPP lending including via its common employees with Prestamos and
its sharing of employees for Prestamos’ PPP lending; and defendant Prestamos’ contacts in this
District in connection with PPP lending and the claims at issue are imputed to its corporate
parent CPLC for purposes of jurisdiction.
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48.
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Venue is proper in this judicial District under 28 U.S.C. § 1391(b)(2) because a
substantial part of the events giving rise to the claims occurred in this District.
Additional Factual Allegations
Background Concerning the
COVID-19 Pandemic and the PPP
49.
On March 11, 2020, the World Health Organization declared the COVID-19
outbreak a “pandemic.” Two days later, on March 13, 2020, the United States declared a national
emergency due to the COVID-19 pandemic.
50.
In response, on March 27, 2020, the United States Congress passed the largest
economic stimulus package in the nation’s history -- the CARES Act. The CARES Act
amounted to over $2 trillion in aid, equivalent to roughly $6,000 per American, or 45% of all
federal government spending for 2019.
51.
The CARES Act was enacted to provide immediate assistance to individuals,
families, and businesses affected by the COVID-19 emergency.
52.
One facet of the CARES Act’s approach to economic relief was the PPP.
Recognizing the huge strain that the COVID-19 pandemic would likely impose on American
small businesses, the PPP initially allocated $349 billion for loans to small businesses, sole
proprietors, and nonprofit organizations, among others. These loans were intended to pay up to
eight weeks of payroll costs (including benefits) and could also be used to pay interest on
mortgages, rent, and utilities.
53.
PPP loans are guaranteed by the SBA, and the PPP provides for loan forgiveness
if the borrower demonstrates that the funds were used in compliance with PPP regulations.
54.
The PPP has received several legislative renewals, modifications, and extensions.
On April 24, 2020, the President signed the Paycheck Protection Program and Health Care
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Enhancement Act, which provided additional funding and authority for the PPP. On June 5,
2020, the Paycheck Protection Program Flexibility Act of 2020 was enacted, extending the
deferral period for PPP loans, among other provisions. On July 4, 2020, the PPP was further
amended to guarantee PPP loans to August 8, 2020. On December 27, 2020, the Economic Aid
to Hard-Hit Small Businesses, Nonprofits, and Venues Act (the “Economic Aid Act”) was
enacted, which further extended the PPP and allowed for the SBA to authorize second-draw PPP
loans through March 31, 2021, available to borrowers who already used their previous PPP loan
proceeds for permitted expenditures. On March 11, 2021, the American Rescue Plan Act was
signed into law, adding an additional $7.25 billion for PPP loans, bringing total appropriations
for the program to $813.7 billion. Finally, on March 30, 2021, the PPP Extension Act was
enacted, which extended the PPP application deadline to May 31, 2021, and gave the SBA until
June 30, 2021 to process loan applications.
55.
PPP loans are generally available to businesses in operation as of February 15,
2020 that had salaried employees, as well as self-employed individuals. Businesses receiving
PPP loans cannot have more than 500 employees and cannot be in bankruptcy. Further,
applicants are required to certify that the “current economic uncertainty makes this loan request
necessary to support the ongoing operations of the Applicant.” Currently, at least 60% of the
proceeds must be used for payroll costs. The entire amount of any PPP loan is subject to
forgiveness so long as the proceeds are used for eligible expenses.
56.
Under the Economic Aid Act, a PPP borrower is entitled to a second draw under
narrower conditions than its first draw. For example, a second draw borrower must have 300 or
fewer employees, must demonstrate that it sustained a certain percentage reduction in its gross
receipts compared to 2019, and must have used its entire first draw proceeds prior to
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disbursement of its second draw proceeds. Second draw loans -- like first draw loans -- are also
subject to forgiveness.
57.
Given the anticipated volume of PPP loan applications, Congress provided for
PPP loan processing and funding through private lenders, with the SBA paying these lenders a
fee for each processed PPP loan. The SBA was required to pay loan processing fees only to
SBA-authorized lenders, not any service provider the lender may also have used.
58.
For their participation, the PPP originally provided that lenders would receive fees
at a rate of five percent for loans $350,000.00 or less, three percent for loans between 350,000.00
and $2,000,000.00, and one percent for loans over $2,000,000.00. See SBA Procedural Notice,
Control No. 5000-20091 (Feb. 8, 2021), available at SBA Procedural Notice: Second Updated
PPP Processing Fee and 1502 Reporting (last accessed Sept. 17, 2021).
59.
To address institutional lenders’ neglecting of PPP loan applications from many
small businesses -- especially minority, underserved, veteran, and women-owned businesses -- in
favor of larger PPP loans, the Economic Aid Act added that lenders processing loans of up to
$50,000.00 would receive an increased fee of fifty percent or $2,500.00, whichever is less, per
PPP loan beginning December 27, 2020.
60.
As a result, PPP lenders received a flat fee of $2,500.00 for virtually every PPP
loan less than $50,000.00.
61.
On February 8, 2021, the SBA issued a new notice setting forth the procedure for
how lenders would be paid PPP loan fees by the SBA. Id. To apply for a PPP loan, a prospective
borrower would have to submit a standardized Borrower Application Form issued by the SBA
(SBA Form 2483 for first time borrowers, and SBA Form 2483-SD for second draw borrowers),
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together with relevant payroll documentation, to a lender. Once the lender reviewed and
approved the loan application, the lender would submit the application to the SBA for approval.
62.
Following SBA approval of an application, the SBA would issue a ten-digit loan
identification number (known as a “GP [General Program] number”) for the borrower’s loan.
63.
Provided that the borrower had executed the loan documents, the lender was
required to disburse the PPP funds within ten days of SBA approval and assignment of the loan
number. In particular, the SBA rule regarding PPP loan funding states, in relevant part, as
follows: “The lender must make a one-time, full disbursement of the PPP loan within 10 calendar
days of loan approval; for purposes of this rule, a loan is considered approved when the loan is
assigned a loan number by the SBA.” 86 FR 3692, 3710 (emphasis added).
64.
The SBA rule also provided as follows: “Notwithstanding this limitation, lenders
are not responsible for delays in disbursement attributable to a borrower’s failure to timely
provide required loan documentation, including a signed promissory note. Loans for which funds
have not been disbursed because a borrower has not submitted required loan documentation
within 20 within 20 calendar days of approval shall be cancelled by the lender.” Id. Accord
Greathouse v. Capital Plus Financial, LLC, No. 4:22-CV-0686-P, 2023 WL 5746927, at *5
(N.D. Tex. Sept. 6, 2023) (noting that this “provision does not address whether cancellation is
required if Plaintiffs filled out the documentation incorrectly or if Plaintiffs’ bank bounced the
funds. Indeed, there are many possibilities where loans might remain unfunded that fall outside
of this narrow statutory provision”) (“CPF”).
65.
Although the SBA’s funding rule did not address all circumstances requiring
when a loan had to be cancelled as the Court noted in CPF, the SBA rules required lenders to
accurately report to the SBA regarding whether the PPP loan was or was not fully disbursed. See
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86 FR 3692, 3709 (“The lender must report on SBA Form 1502 whether it has fully disbursed
PPP loan proceeds.”). See also Id. (“In addition to providing ACH credit information to direct
payment of the requested processing fee, lenders will be required to confirm that all PPP loans
for which the lender is requesting a processing fee have been fully disbursed on the disbursement
dates and in the loan amounts reported.”). And as detailed more fully below, the SBA’s Form
1502 reports required lenders to update those reports and specifically identify the PPP loan
amounts that were and were not disbursed.
66.
Lenders’ compliance with the above PPP funding requirement was of paramount
importance to applicants and borrowers for reasons beyond their need to get the PPP loan
proceeds in a timely manner.
67.
Once the SBA approved a PPP loan and assigned it a loan number, the applicant
could not apply for a PPP loan with any other lender because the applicant could not make all of
the required certifications on another PPP loan application. Thus, once approved, the borrower
was essentially “stuck” with the lender to whom it applied for the PPP loan, meaning that the
borrower had to rely exclusively on the good faith of the lender to actually fund the loan.
68.
For both first draw and second draw PPP loans, a PPP loan applicant had to
certify that they had not and would not receive another first draw or second draw loan,
respectively.
69.
Since the lender’s obligation to fund a PPP loan ran from the date the SBA
approved and assigned a loan number provided that the borrower completed and returned the
loan documents, an applicant could not certify to another lender that they would not receive the
first loan even if the first lender had failed to timely or otherwise (even belatedly) fund the loan.
16
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70.
Document 106-2
Filed 05/01/24
Page 18 of 118
Once a PPP loan was purportedly funded, the lender had ten days to submit an
SBA Form 1502 to report to the SBA that the loan proceeds had been disbursed in order to
qualify for payment of the loan processing fee. After the lender submitted a Form 1502
indicating that the loan was disbursed to the borrower, the SBA would initiate payment of the
loan processing fee to the lender.
71.
By submitting a Form 1502 to get paid the loan processing fee by the SBA, the
lender represented to the SBA that the PPP loan had been fully funded. Further, the lender was
required to update the SBA Form 1502 reports each month after the initial Form 1502 was filed
detailing each PPP loan’s status. If the lender failed to disburse the PPP loan to the borrower in
whole or in part, the lender was required to report that accurately.
72.
In particular, § 6 of the SBA Form 1502 states that the lender must specifically
identify the “Amt Undisbursed on Total Loan: Of the total approved amount (100% amount),
the amount that has not been disbursed by the lender as of the month ending date.” (emphasis in
original). See https://www.sba.gov/document/sba-form-1502-sba-form-1502-instructions (last visited
Jan. 7, 2024). Similarly, § 4 of the Form 1502 requires the lender to also specifically identify the
status of each PPP loan, including in particular “Status 9: Fully Undisbursed – loan that has not
had any disbursements made to the borrower. … Report Status Code 9 and indicate the Amount
Undisbursed on Total Loan, until such time that the loan is disbursed.” (emphasis in original). Id.
73.
As alleged more fully below, all Plaintiffs were approved for their PPP loans and
assigned SBA loan numbers; timely completed and returned to Prestamos all requisite loan
documentation; never had their loans funded by Prestamos; and were misreported by Prestamos
to the SBA as being funded so Prestamos could obtain the loan fees.
17
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74.
Document 106-2
Filed 05/01/24
Page 19 of 118
The PPP was also designed to make eligible PPP loans completely forgivable.
According to recent PPP loan data, 93% of all PPP loans have been fully or partially forgiven,
representing $755,714,750,900. See https://www.sba.gov/sites/default/files/202210/2022.10.24_Weekly%20Forgiveness%20Report_Public.pdf.
75.
Plaintiffs and the members of the classes could not obtain forgiveness on their
PPP loans because they could not represent that they had properly used PPP loan proceeds that
they in fact never received from Prestamos.
76.
In addition to being unfunded and unable to have their loans forgiven, Plaintiffs
and other class members also remain bound under the PPP loan notes they and Prestamos entered
into to pay back to Prestamos, with interest, PPP loan proceeds they never received. In particular,
§ 3 of the standard SBA form Note that the Plaintiffs and class members entered into with
Prestamos states as follows: “If the Loan is not fully forgiven, Borrower will remain liable for
the full and punctual payment and satisfaction of the remaining outstanding principal balance of
the Loan plus accrued but unpaid interest.” See Exhibit A, Note at § 3 (attaching the standard
form Note and accompanying loan documents between Prestamos and first-named plaintiff
Marshall which also are the standard form Note and accompanying loan documents that all other
Plaintiffs and class members entered into with Prestamos).
Background Concerning Defendants
77.
According to its website, Prestamos purports to be “your partner in economic
development, small business growth and quality job creation.” See Prestamos CDFI, available at
https://www.prestamosloans.org/ (last visited May 1, 2022). Also, according to its website,
Prestamos provides loan products and consulting services that “are designed for the emerging
business owner seeking funding.” Id.
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78.
Document 106-2
Filed 05/01/24
Page 20 of 118
Prestamos is a Community Development Financial Institution (“CDFI”). CDFIs
were established as part of the Riegle Community Development and Regulatory Improvement
Act of 1994. See What Are CDFIs, available at
https://www.cdfifund.gov/sites/cdfi/files/documents/cdfi_infographic_v08a.pdf (last visited
May 1, 2022). There are reportedly 1,000 CDFIs operating nationwide. Id.
79.
Prestamos is owned by defendant CPLC. Although CPLC purports to be a
domestic nonprofit corporation organized under Arizona law, it states on its website that “CPLC
owns and manages mission-driven for-profit subsidiaries, whose income helps to fund our
nonprofit charitable initiatives.” See CPLS, Who We Are, available at
https://cplc.org/about/about.php (last visited May 1, 2022).
80.
Further, as a nonprofit, CPLC is exempt from income tax provided it complies
with applicable provisions of the Internal Revenue Code and regulations of the U.S. Internal
Revenue Service (the “IRS”). CPLC also is obligated to file with the IRS each year a Form 990
Return of Organization Exempt From Income Tax, including a Schedule A Public Charity Status
and Public Support, among other things.
81.
CPLC’s 2019 Form 990 reported total revenues for the tax year beginning July 1,
2019 and ending June 30, 2020 of $87,628,824 compared to total revenue of $72,381,458 the
prior year; states that it paid $40,368,642 out in the period July 1, 2019 to June 30, 2020 for
salaries, other compensation, and employee benefits compared to $37,822,034 in the prior
period; paid $2,146,064 in grants and similar amounts in the period July 1, 2019 to June 30, 2020
compared to $1,307,549 in the prior period; identified its former President and CEO, Adame, as
its principal officer; and is signed by its former CFO and current CEDO and President, Nunez.
See ProPublica, Chicanos Por La Causa Inc., Form 990 for period ending June 2020, available at
19
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https://projects.propublica.org/nonprofits/display_990/860227210/05_2021_prefixes_8490%2F860227210_202006_990_2021051818121912 (last visited May 1, 2022).
82.
Adame served as CPLC’s President and CEO until on or about October 6, 2023,
when he resigned; Nunez served as CPLC’s Executive Vice President and CFO until on or about
October 6, 2023, when she became CPLC’s Interim President and CEO and, on April 24, 2024,
was appointed CPLC’s President and CEO; and Max Gonzales (“Gonzales”) serves as CPLC’s
Executive Vice President and Strategy & Relationship Management. See CPLC, Leadership,
available at https://cplc.org/about/leadership.php (last visited April 26, 2024). In addition, and at
all times relevant, Adame, Gonzales and Nunez were the sole members of defendant Prestamos’s
governing Board of Directors. See Prestamos CDFI, About Us, available at
https://www.prestamosloans.org/about-prestamos/ (last visited May 1, 2022). CPLC’s Board
Members at large Jose Antonio Habre and Dan Hernandez also served on Prestamos’s
Community Advisory Board. Id.
83.
Further, Defendants shared not just common board of director membership but
also senior executives. For example, at all times relevant CPLC’s Executive Vice President
Economic Development was Jose Martinez (“Martinez”). See CPLC, Leadership, available at
https://cplc.org/about/leadership.php (last visited April 26, 2024). Accord Jose Martinez,
LinkedIn, available at https://www.linkedin.com/ in/jose-martinez-a7173b52/details/experience/
(last visited May 1, 2022). Also at all times relevant, Martinez simultaneously served as
President of defendant Prestamos and actually signed in his capacity as President of Prestamos
the standard “Notice – No Oral Agreements” form that accompanied the notes Plaintiffs and
other SBA-approved borrowers entered into with Prestamos to obtain their PPP loan agreements.
20
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See Exhibit A attached hereto. In fact, Martinez’s email address used in connection with
Prestamos’s PPP lending was at his address at cplc.org.
84.
Defendants also promoted and referred to each other and held themselves out
publicly as being under common control in their websites and other publications. For example,
Prestamos’ website states that “Prestamos through its parent corporation, Chicanos Por La
Causa, Inc., has administered a variety of lending programs since 1980.” See Prestamos CDFI,
About Us, available at https://www.prestamosloans.org/about-prestamos/ (last visited May 1,
2022) (emphasis added). Similarly, in CPLC’s fiscal year 2019 – 2020 Annual Report, CPLC
repeatedly referred to the two Defendants as one, stating as follows:
CPLC Prestamos is filling a critical need to help small businesses keep the
lights on during COVID-19. CPLC Prestamos was formed to serve small
business in low-income communities and Latino and minority-owned
businesses. We provide capital to businesses that don’t have banking
relationships or might not qualify for loans. During the pandemic, CPLC
Prestamos is administering Paycheck Protection (PPP) loans to help small
businesses keep their doors open. We ramped up our operations, serving
more than 900 businesses and deploying $26 million in capital to save
almost 4,000 jobs.
See CPLC FY19-20, Annual Report, at 7, available at
https://cplc.org/assets/files/publications/CPLC%20FY19-20%20Annual-Report.pdf (emphasis
added) (last visited May 1, 2022).
85.
CPLC also reflected its control over Prestamos in CPLC’s Consolidated Financial
Statements and Supplementary Information for the fiscal year July 1, 2019 – June 30, 2020 (the
“Financial Statements”). For example, CPLC stated in those Financial Statements as follows:
“Starting in May 2020, the Organization began participating in the Paycheck Protection
Program. Loan origination fees associated with PPP loans are deferred and amortized through the
earlier of SBA forgiveness obtained or through the term of the loan.” See ProPublica, Chicanos
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Por La Causa Inc., at 18 available at
https://projects.propublica.org/nonprofits/display_audit/11175820211 (emphasis added) (last
visited May 1, 2022). Similarly, while later also stating in those Financial Statements that
defendant Prestamos “participated in” PPP lending, CPLC also stated in that very same
paragraph regarding PPP loan processing fees that, “[a]s of June 30, 2021, the Organization
received $314,260,826 from SBA, $5,086,196 was recognized as loan fee revenue and
$309,174,630 was recorded as deferred revenue.” Id. at 20 (emphasis added).
86.
Prestamos represents on its website that, as a CDFI, it is “dedicated to helping
economic growth in underserved areas by providing financing solutions to businesses and
economic development projects.” See Prestamos CDFI, available at
https://www.prestamosloans.org/ (last visited May 1, 2022).
87.
Since many sole proprietors’ PPP loans were in amounts less than $10,000.00,
PPP lenders like Prestamos were generating processing fees of only several hundred dollars for
making those loans in 2020.
88.
Pursuant to the new 2021 increased fee schedule, however, lenders like Prestamos
could count on collecting a $2,500.00 flat fee for nearly every PPP loan less than $50,000.00.
89.
Taking into consideration the incredible demand for PPP loans less than
$50,000.00 by sole proprietors, independent contractors, self-employed individuals and other
underserved small businesses together with the more lucrative fee schedule, Prestamos saw an
opportunity to obtain enormous amounts of lender fees by booking a high volume of PPP loans
under $50,000.00.
90.
CPLC and/or Prestamos reportedly contracted with Blue Acorn PPP, LLC (and/or
its affiliate FinCap, Inc. or their affiliates) (“Blueacorn”) in 2021 and potentially other third
22
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parties to help identify borrowers to whom Prestamos could make PPP loans and assist in the
PPP paperwork process.
91.
Blueacorn was created in 2020.
92.
Blueacorn is neither a bank nor a lender and, therefore, cannot actually make PPP
93.
In general, only SBA section 7(a)-approved lenders were approved to make PPP
loans.
loans, together with any additional lenders determined by the Administrator of the SBA and the
Secretary of the U.S. Treasury to also be qualified to make such loans. See 86 FED. REG. 3692
(Jan. 14, 2021), available at Federal Register :: Business Loan Program Temporary Changes;
Paycheck Protection Program as Amended by Economic Aid Act (last visited May 1, 2022).
94.
Accordingly, Plaintiffs and other similarly situated class member borrowers
contracted with Prestamos as the lender obligated to make the PPP loans.
95.
For its role in identifying potential borrowers and helping with the PPP
paperwork, Blueacorn reportedly received a part of the lender’s fees pursuant to a separate
contractual relationship between the lender and Blueacorn. See Stacy Crowley & Ella Koeze,
How Two Start-Ups Reaped Billions in Fees on Small Business Relief Loans, N.Y. Times,
June 27, 2021, Updated Oct. 11, 2021, available at
https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html (last
visited May 1, 2022). Prestamos contracted with Blueacorn for Blueacorn’s services as a lender
service provider (“LSP”) to Prestamos for PPP lending, and PPP rules provide that Blueacorn
was acting within the scope of Prestamos’ authority as its LSP for PPP lending.
23
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Filed 05/01/24
Page 25 of 118
Defendants Exploit PPP Lending
96.
At all times relevant, CPLC and its senior executives, including Adame, Gonzales
and Nunez who simultaneously were also the sole members of Prestamos’s Board of Directors,
as well as Martinez who simultaneously served as CPLC’s Executive Vice President and
Prestamos’ President and other CPLC executives, controlled Prestamos, including Defendants’
plan for Prestamos to dramatically ramp up its PPP lending activity so that Defendants could be
enriched thereby.
97.
Defendants succeeded in that respect. In particular as noted above, Defendants
exploited the increased fees to be paid by the SBA on smaller PPP loans in 2021 by reportedly
having Prestamos agree to fund 494,415 PPP loans totaling over $7.6 billion in loan proceeds -more loans than any other lender, and more loans than Bank of America, PNC Bank, TD Bank
and Wells Fargo combined. See SBA, Paycheck Protection Program (PPP) Report, Approvals
through 5/31/2021, p. 7, available at https://www.sba.gov/sites/default/files/202106/PPP_Report_Public_210531-508.pdf (last visited May 1, 2022).
98.
As a result, Prestamos reportedly generated nearly $1.2 billion in PPP loan fees in
2021. See Stacy Crowley & Ella Koeze, How Two Start-Ups Reaped Billions in Fees on Small
Business Relief Loans, N.Y. Times, June 27, 2021, Updated Oct. 11, 2021, available at
https://www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html (last
visited May 1, 2022) (“Last year, Prestamos made $1.3 million for its lending. This year, it will
collect nearly $1.2 billion, according to a New York Times calculation of lenders’ fees based on
government data.”).
99.
Further, according to CPLC’s own Financial Statements, defendant Prestamos
upstreamed to CPLC some or all of the net PPP loan processing fees Prestamos obtained. See
24
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Filed 05/01/24
Page 26 of 118
ProPublica, Chicanos Por La Cause Inc., Consolidated Financial Statements, p.20 Year Ended
June 30, 2021, available at https://projects.propublica.org/nonprofits/display_audit/11175820211
(last visited May 2, 2022) (“As of June 30, 2021, the Organization received $314,260,826 from
SBA, $5,086,196 was recognized as loan fee revenue and $309,174,630 was recorded as deferred
revenue.”) (emphasis added).
100.
Even though Prestamos and not CPLC was the SBA-approved PPP lender, CPLC
also blurred the distinction between it and Prestamos and referred to and touted the success of
Prestamos’ PPP lending as its own in CPLC’s own website, as follows:
“In 2021, CPLC Prestamos CDFI was named the #1 U.S. Small Business
Administration PPP lender by number of loans and the #3 lender by
dollar volume with $7.6 billion in approved loans with an average loan
amount of $15,526 serving 78% minority owned businesses.” (emphasis
added);
“CPLC Prestamos is an award-winning Community Development
Financial Institution (CDFI) …” (emphasis added); and
“CPLC PRESTAMOS LOAN PRODUCTS” (emphasis added)
See Chicanos Por La Causa, Small Business Lending, available at
https://cplc.org/econ/lending.php (last visited May 1, 2022).
101.
In sum, CPLC participated directly in Prestamos’ PPP lending even though
Prestamos and not CPLC was the SBA-approved lender; controlled and directed Prestamos’ PPP
lending activities through its common management and control and 100% ownership of
Prestamos; exploited Prestamos’ status as the SBA-approved PPP lender; enriched itself by
causing Prestamos to upstream to CPLC hundreds of millions of dollars in PPP loan processing
fees including on the backs of Plaintiffs and other class members whose SBA-approved PPP
loans Prestamos reported as funded to obtain the PPP loan processing fees but were, in fact, not
funded; and, in turn, improperly enriched itself and its leadership from a federally-funded
25
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program designed to actually help small minority, women and other business putative class
member owners whose businesses were struggling amid the COVID-19 pandemic and whose
mission Defendants purported to serve.
102.
Adame even touted the success of the two companies’ PPP lending publicly in
the media, stating as follows: “’What we did together is absolutely incredible,’ said David
Adame, the chief executive of Chicanos Por La Cause, the parent organization of Prestamos.
’The myth that you can’t serve communities of color, or underserved communities, with a
technology model, at scale - we’ve blown that away.’” See Stacy Crowley & Ella Koeze, How
Two Start-Ups Reaped Billions in Fees on Small Business Relief Loans, N.Y. Times, June 27,
2021, Updated Oct. 11, 2021, available at https://www.nytimes.com/2021/06/27/business/ppprelief-loans-blueacorn-womply.html (last visited May 1, 2022)
Prestamos’s Participation in the
PPP Liquidity Facility
103.
To facilitate lending under the SBA’s PPP, the Federal Reserve supplied liquidity
to Prestamos and other participating financial institutions through term financing to be secured
by the PPP loans. See Board of Governors of the Federal Reserve System, Paycheck Protection
Program Liquidity Facility (PPPLF), available at
https://www.federalreserve.gov/monetarypolicy/ppplf.htm (last visited May 1, 2022).
104.
In particular, the Paycheck Protection Program Liquidity Facility (“PPPLF”) was
authorized under § 13(3) of the Federal Reserve Act “to facilitate lending by eligible borrowers
[i.e., PPP lenders] to small businesses under the [PPP]. … Under the Facility, the Federal
Reserve Banks (‘Reserve Banks’) will lend to eligible borrowers [i.e., PPP lenders] on a nonrecourse basis, taking PPP Loans as collateral.” See Paycheck Protection Program Liquidity
26
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Filed 05/01/24
Page 28 of 118
Facility Term Sheet, available at
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20210625a1.pdf (last
visited May 1, 2022).
105.
Further, “[a]ll lenders that are eligible to originate PPP Loans are eligible to
borrow under the Facility.” Id.
106.
For Prestamos and other qualified CDFI PPP lenders, the lending Federal Reserve
Bank was the Federal Reserve Bank of Cleveland. Id.
107.
Only SBA-guaranteed PPP loans are eligible to serve as collateral for PPPLF
advances, and the principal amount advanced under the PPPLF was to be equal to the principal
amount of the PPP loan pledged to secure the extension of credit. Id.
108.
By borrowing from the PPPLF, Prestamos received PPP loan advances
exclusively for the purpose of funding SBA-approved PPP loans, and Prestamos pledged those
loans, in turn, as collateral to secure those PPPLF loan proceeds. The PPP provided that the
funding for the PPP loans would only be advanced by the Federal Reserve after the SBA had
approved the PPP loan and the PPP note and accompanying loan documents were signed. To
pledge a PPP loan as collateral and request a PPPLF loan advance, Prestamos had to complete
and submit a PPPLF Pledge and Advance Request form (the “Advance Request Form”). See
https://www.frbdiscountwindow.org/generalpages/ppplf_historical_documentation. The Advance
Request Form required Prestamos to provide information about each loan, and the PPP rules
were incorporated into and a binding part of each PPP note and accompanying loan agreement
documents. See 15 U.S.C. § 9008(g) (requiring PPP lenders to make loans “under the criteria,
terms, and conditions” set by the SBA and other applicable rules).
27
Case 5:21-cv-04337-JMG
109.
Document 106-2
Filed 05/01/24
Page 29 of 118
Prestamos also repeatedly made numerous false representations confirming its
agreement to fund the loans of Plaintiffs and other SBA-approved but unfunded PPP borrowers
as part of the Advance Request Forms. Prestamos also obtained PPP loan processing fees by
falsely representing in its Form 1502 reports to the SBA that Prestamos had funded Plaintiffs’
and the other SBA-approved class member PPP loans Prestamos committed to fund but failed to
fund.
110.
Prestamos received billions of dollars of advances through the PPPLF as specified
more fully below.
111.
In fact, although the PPP application period ended on May 31, 2021 and the life
cycle of a PPP loan application should only take a few business days, Prestamos continued to
receive huge advances through the PPPLF between June 30, 2021 and July 30, 2021, after the
deadline for processing loan applications.
112.
For example, on June 30, 2021 alone, Prestamos received PPPLF cash advances
of approximately $118,743,226.
113.
In particular, according to a report by the Federal Reserve to the U.S. Congress
dated September 13, 2021 “PPPLF Transaction-specific Disclosures (XLSX),” Prestamos
received the following specific cash advances from the PPPLF:
Date of Advance
Amount
2020-05-15
$839,761.76
2020-05-19
$6,047,880.04
2020-05-20
$862,834.00
2020-05-22
$1,156,497.62
2020-05-27
$416,800.54
2020-05-29
$696,356.87
2020-06-01
$492,218.22
28
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Document 106-2
Filed 05/01/24
Date of Advance
Amount
2020-06-03
$244,555.74
2020-06-04
$559,762.54
2020-06-08
$11,242.95
2020-06-08
$559,314.27
2020-06-08
$63,848.04
2020-06-08
$614,343.47
2020-06-26
$177,591.04
2020-06-26
$221,991.60
2020-06-26
$198,670.00
2020-06-26
$285,888.69
2020-06-26
$103,249.00
2020-06-26
$348,119.55
2020-06-30
$210,223.83
2020-07-01
$303,478.31
2020-07-01
$486,363.72
2020-07-01
$829,175.81
2020-07-07
$1,639,353.02
2020-07-09
$1,070,316.28
2020-07-14
$320,769.72
2020-07-14
$320,335.47
2020-07-31
$598,038.85
2020-07-31
$1,585,572.39
2020-07-31
$333,622.00
2020-08-11
$1,027,167.09
2020-08-11
$1,819,532.00
2020-08-11
$256,166.50
2020-09-22
$1,209,795.10
2020-09-23
$47,152.00
2020-09-23
$322,815.25
2020-09-23
$112,162.00
29
Page 30 of 118
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Date of Advance
Amount
2020 Total
$26,392,965.28
Date of Advance
Amount
2021-01-29
$186,091.00
2021-02-04
$2,706,582.04
2021-02-08
$2,633,372.65
2021-02-09
$2,974,669.86
2021-02-18
$3,270,876.03
2021-02-18
$1,405,472.00
2021-02-23
$2,955,206.00
2021-02-26
$2,975,445.15
2021-03-10
$1,137,906.71
2021-03-10
$574,411.00
2021-03-18
$285,612.00
2021-03-18
$1,920,037.00
2021-03-24
$1,376,450.00
2021-03-24
$1,394,589.00
2021-04-05
$2,036,898.00
2021-04-14
$1,857,735.83
2021-04-14
$1,218,922.00
2021-04-14
$2,080,722.00
2021-04-14
$549,184.00
2021-04-19
$2,781,743.00
2021-04-27
$2,385,498.00
2021-05-05
$542,247,559.00
2021-05-07
$977,283,838.00
2021-05-11
$219,875,856.00
2021-05-12
$11,638,792.00
2021-05-12
$15,011,946.00
2021-05-12
$22,711,165.00
2021-05-14
$261,721,437.00
30
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Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Date of Advance
Amount
2021-05-14
$71,807,843.00
2021-05-14
$9,724,231.00
2021-05-14
$5,800,825.00
2021-05-14
$1,394,114.00
2021-05-14
$3,236,837.00
2021-05-17
$2,820,014.00
2021-05-17
$2,000,798.00
2021-05-18
$3,013,786.00
2021-05-18
$3,094,488.00
2021-05-19
$752,007,807.00
2021-05-20
$24,508,694.00
2021-05-20
$129,048,483.00
2021-05-21
$383,962,452.00
2021-05-24
$553,643,404.00
2021-05-26
$287,698,867.00
2021-05-26
$78,487,436.00
2021-05-26
$21,918,317.00
2021-05-26
$6,212,247.00
2021-05-26
$8,109,147.00
2021-05-28
$8,589,635.00
2021-05-28
$11,371,049.00
2021-05-28
$184,579,114.00
2021-06-02
$25,025,683.00
2021-06-02
$363,445,193.00
2021-06-03
$487,925,246.00
2021-06-04
$55,686,186.00
2021-06-08
$278,866,006.00
2021-06-08
$52,432,880.00
2021-06-09
$674,168,631.00
2021-06-10
$235,611,832.00
31
Page 32 of 118
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Date of Advance
Amount
2021-06-15
$24,013,181.00
2021-06-15
$8,772,946.00
2021-06-15
$10,593,069.00
2021-06-15
$13,035,119.00
2021-06-15
$8,866,293.00
2021-06-17
$13,428,841.00
2021-06-17
$5,676,633.00
2021-06-18
$6,658,965.00
2021-06-18
$2,304,017.00
2021-06-18
$2,397,599.00
2021-06-18
$6,799,943.00
2021-06-18
$4,549,067.00
2021-06-21
$11,740,892.00
2021-06-22
$5,148,262.00
2021-06-24
$2,473,148.00
2021-06-24
$2,672,552.00
2021-06-24
$12,965,069.00
2021-06-24
$41,186,983.00
2021-06-24
$16,493,297.00
2021-06-30
$7,453,648.00
2021-06-30
$110,650,628.00
2021-06-30
$638,950.00
2021-07-02
$41,664.00
2021-07-02
$435,987.00
2021-07-02
$540,429.00
2021-07-07
$329,417.00
2021-07-07
$62,496.00
2021-07-12
$149,699.00
2021-07-12
$176,781.00
2021-07-14
$7,871,678.00
32
Page 33 of 118
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 34 of 118
Date of Advance
Amount
2021-07-29
$20,832.00
2021-07-30
$598,787.00
2021 Total
$7,144,136,133.27
See Board of Governors of the Federal Reserve System, Paycheck Protection Program Liquidity
Facility (PPPLF), available at https://www.federalreserve.gov/monetarypolicy/ppplf.htm (last
visited May 1, 2022).
114.
As alleged below, while Prestamos received over $7.1 billion from the PPPLF in
2021 alone, Prestamos unjustifiably failed to disburse PPP loan funds approved by the SBA to
Plaintiffs and numerous other SBA-approved borrower members of the proposed class.
115.
Prestamos failed to disburse the proceeds of class member approved loans despite
having actually received the unfunded PPP loan proceed advances from the PPPLF, and despite
the fact that Prestamos pledged class member loans dollar-for-dollar to obtain those PPPLF
advances.
Prestamos’ Failure to Fund
Plaintiff Marshall’s PPP Loan
116.
When the COVID-19 pandemic began, plaintiff Marshall was, and continues to
be, in the business of providing in-home healthcare in the Sacramento, California area.
117.
Due to the pandemic, Marshall was not able to provide in-home care with the
same frequency and, as a result, lost significant income.
118.
On or about April 21, 2021, Marshall applied for a PPP loan with Prestamos.
Marshall submitted all requested documentation and information, including but not limited to the
standard form Note and accompanying documents that all class member borrowers similarly
submitted to Prestamos.
33
Case 5:21-cv-04337-JMG
119.
Document 106-2
Filed 05/01/24
Page 35 of 118
Plaintiff Marshall and the other Plaintiffs and class members formed binding and
enforceable agreements with Prestamos when they completed and submitted the Note and other
applicable accompanying documents to Prestamos.
120.
In particular, the Note also included an Additional and Correction Documents
Agreement (Errors and Omissions Agreement) (the “Additional Agreement”) between Prestamos
and plaintiff Marshall; a Business Purpose Statement; a Notice - No Oral Agreements bearing the
signature of Prestamos’s President Martinez and plaintiff Marshall; a Written Consent of
Governing Body form for Marshall to represent that she is authorized to receive the loan and on
which Prestamos may rely; an IRS W-9 Request for Taxpayer Identification Number and
Certification; and an Information and Bank Account Certification and Authorization form
identifying the bank or other account to which Prestamos would send the funds (collectively, the
“Loan Documents”). All other Plaintiffs and class members also entered into the same standard
form Loan Documents with Prestamos.
121.
On or about April 22, 2021, the SBA approved Marshall’s PPP loan application
and assigned it a loan number (SBA Loan Number 8282208801).
122.
Marshall was approved for a PPP loan in the amount of $7,915.00.
123.
The Note identified the SBA loan number and amount, defendant Prestamos as
the lender and plaintiff Marshall as the borrower; set forth payment terms, potential events of
default, Prestamos’s rights in the event of default, and other terms and conditions; and provided
the terms for plaintiff Marshall to repay the loan to Prestamos if it was not forgiven, among other
things.
124.
On April 29, 2021, Marshall signed and returned the Loan Documents in order to
obtain the $7,915.00 PPP loan.
34
Case 5:21-cv-04337-JMG
125.
Document 106-2
Filed 05/01/24
Page 36 of 118
Despite properly and timely completing, signing and submitting the Loan
Documents and multiple additional attempts to obtain the loan proceeds, Marshall never received
the proceeds of her SBA-approved PPP loan.
126.
Marshall also took additional, specific steps to obtain her SBA-approved loan. For
example, on August 2, 2021, Marshall contacted her local SBA office about Prestamos’s failure
to fund her PPP loan.
127.
Similarly, on August 3, 2021, Marshall emailed the SBA to again pursue funding
of her PPP loan.
128.
On August 3, 2021, the SBA office responded and provided Marshall with the
following information about her PPP loan:
Alicia Marshall West Sacramento CA Amount $7,915 Status Disbursed Current
Loan 82822088-01
129.
App 29343623
Funded 04/22/2021[.]
Marshall also continued her attempts to collect the PPP loan proceeds directly
with Prestamos. For example, on September 4, 2021, Marshall emailed Prestamos’s President
Martinez stating that “I was SBA approved on April 22nd 2021 and I signed a promissory note
with you on April 29th 2021”; that “I understand there is a lot of fraud going on but my business
is legitimate”; that “I don’t understand why my loan was approved money was sent and now its
cancelled”; that “I would appreciate if you can explain this to me or look into it and see what
went wrong”; and that “I would hope that you being president of a rapidly growing respected
business would not want any of your customers to have a negative experience dealing with your
company so I have faith that you will be able to resolve this issue promptly!”
35
Case 5:21-cv-04337-JMG
130.
Document 106-2
Filed 05/01/24
Page 37 of 118
Although the SBA’s records reported that plaintiff Marshall’s PPP loan had
actually been funded, Marshall never received any PPP loan proceeds despite her repeated
attempts to actually get funded.
131.
The SBA’s record of the alleged disbursement of Marshall’s loan proceeds and
the purported disbursement of the PPP loan proceeds by Prestamos to all other Plaintiffs and
class members was based on false data Prestamos reported to the SBA. In the case of all of the
PPP loans of Plaintiffs and the members of the class, Prestamos falsely reported to the SBA that
the loans were funded and obtained a loan processing fee despite the fact that the loans were not
funded.
132.
Thus, while Prestamos agreed to extend credit to Marshall and the other Plaintiffs
and class members by identifying itself as her lender in the Note -- that is, fund their SBAapproved loan -- Prestamos never actually extended credit to them because it failed to fund their
PPP loans.
133.
In fact, on September 21, 2021, the SBA sent an email to plaintiff Marshall
stating that she is eligible to apply “for PPP Direct Forgiveness because your lender has opted in
and you have a PPP loan amount of $150,000 or less.”
134.
Despite the SBA’s September 21, 2021 email inviting plaintiff Marshall to apply
for loan forgiveness and Marshall’s repeated attempts to get funding, Marshall never received
any PPP loan proceeds.
135.
Having properly completed and returned all required loan documents, plaintiff
Marshall and all class members were entitled to timely disbursement of their PPP loan funds.
36
Case 5:21-cv-04337-JMG
136.
Document 106-2
Filed 05/01/24
Page 38 of 118
Prestamos’ failure to fund the loans Marshall and the class after locking them into
the Loan Documents also prevented Marshall and the members of the class from pursuing their
loan requests with another PPP lender.
137.
Prestamos’ failure to fund Marshall’s SBA-approved PPP loan deprived Marshall
of funds that would have directly assisted in the operation of her in-home healthcare business
and resulted in lost opportunities and other consequential damages.
138.
Prestamos’ failure to disburse PPP loan funds to Marshall and the other Plaintiffs
and members of the class after agreeing to do so, has also them obligated under the Loan
Documents to repay funds to Prestamos that they never received, with interest.
139.
Plaintiff Marshall and the other Plaintiffs and members of the class have also been
injured in that the loan forgiveness requires affirming, under threat of criminal penalty, that PPP
loan funds were used in a particular manner, and they could not so affirm the nature of the use of
funds they never received.
Prestamos’ Failure to Fund
Plaintiff Pronsky’s PPP Loan
140.
When the COVID-19 pandemic began, plaintiff Pronsky was in the barbeque
catering business.
141.
Plaintiff Pronsky’s barbeque catering business was in and around Reading,
Pennsylvania.
142.
Due to the pandemic, Pronsky’s catering business lost significant income.
143.
Accordingly, in or about May 2021, Pronsky also applied for a PPP loan.
144.
On May 27, 2021, the SBA approved Pronsky’s PPP loan application and
assigned it a loan number (SBA Loan Number 4628549010).
145.
Pronsky was approved for a PPP loan in the amount of $8,332.00.
37
Case 5:21-cv-04337-JMG
146.
Document 106-2
Filed 05/01/24
Page 39 of 118
Also on May 27, 2021, Pronsky received the same form PPP loan promissory
Note and accompanying additional Loan Documents that plaintiff Marshall had also received.
147.
Additionally, on May 27, 2021, Pronsky signed and returned the Loan Documents
in order to obtain the $8,332.00 PPP loan.
148.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Pronsky never received the proceeds of
his SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
his loan.
149.
Prestamos’ failure to fund Pronsky’s SBA-approved PPP loan deprived Pronsky
of funds that would have assisted in the operation of his catering business and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Townsend’s PPP Loan
150.
When the COVID-19 pandemic began, plaintiff Townsend was in the business of
making and selling hair care products in the San Bernadino, California area.
151.
Due to the pandemic, Townsend’s hair care business lost significant income.
152.
Accordingly, on or about May 6, 2021, Townsend applied for a PPP loan.
153.
Also in May 2021, the SBA approved Townsend’s PPP loan application and
assigned it a loan number (SBA Loan Number 4476579008).
154.
Townsend was approved for a PPP loan in the amount of $20,012.00.
155.
On or about May 27, 2021, Townsend received the same form PPP loan
promissory Note and accompanying additional Loan Documents that plaintiff Marshall had also
received.
38
Case 5:21-cv-04337-JMG
156.
Document 106-2
Filed 05/01/24
Page 40 of 118
Additionally, on May 27, 2021, Townsend signed and returned the Loan
Documents in order to obtain the $20,012.00 PPP loan.
157.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Townsend never received the proceeds of
her SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
her loan.
158.
Prestamos’ failure to fund Townsend’s SBA-approved PPP loan deprived
Townsend of funds that would have directly assisted in the operation of her hair care products
business and resulted in lost opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Holland’s PPP Loan
159.
When the COVID-19 pandemic began, plaintiff Holland was in the real estate
business in the Greenwich, Connecticut area.
160.
Due to the pandemic, Holland’s real estate business lost significant income.
161.
In or about May 2021, Holland applied for a PPP loan with Prestamos. Holland
submitted all requested documentation and information.
162.
Also in May 2021, the SBA approved Holland’s PPP loan application and
assigned it a loan number (SBA Loan Number 1427199001).
163.
Holland was approved for a PPP loan in the amount of $20,832.00.
164.
On May 19, 2021, Holland received the same form PPP loan promissory Note and
accompanying Loan Documents that plaintiff Marshall had received.
165.
Also on May 19, 2021, Holland signed and returned the Loan Documents in order
to obtain the $20,832.00 PPP loan.
39
Case 5:21-cv-04337-JMG
166.
Document 106-2
Filed 05/01/24
Page 41 of 118
Despite properly and timely completing, signing and submitting the Loan
Documents, Holland never received the proceeds of her SBA-approved PPP loan although
Prestamos falsely reported to the SBA that it had funded her loan.
167.
Prestamos failed to fund the loan despite additional steps by Holland to obtain the
PPP loan proceeds. For example, Holland wrote an email to Prestamos’s President Martinez on
August 13, 2021 stating that “I applied in May, was approved and signed the promissory note 19
May”; that “[t]he SBA website shows my funds disbursed as of May”; and that “I am writing to
you to request your assistance in this matter.” Neither Prestamos nor Martinez responded to
Holland’s August 13 email.
168.
Holland also sought the assistance of the SBA to obtain funding, and the SBA, in
turn, similarly requested the assistance of Prestamos and its President Martinez. Specifically,
according to a September 20, 2021 email from SBA employee John Xu to Martinez:
“Subject: Nancilee Realty Greenwich CT
Hi Jose,
Ms. Holland contacted SBA regarding her PPP. She stated that the
application was approved but she did not receive the funds.
I found your name under her loan application, and the funds were
disbursed currently in our system as follows.
Can you or your staff look into the case and get it back to her?
Nancilee Realty
Greenwich CT
Amount $20,832
Status Disbursed Client
Loan 14271990-01
App 30585546
Funded 05/13/2021.”
40
Case 5:21-cv-04337-JMG
169.
Document 106-2
Filed 05/01/24
Page 42 of 118
Holland still did not receive any response from Prestamos or Martinez in response
to her inquiries.
170.
On October 1, 2021 -- the very day this lawsuit was filed -- Holland faxed a letter
to Martinez stating as follows:
“1 October, 2021
VIA FACSIMILE TO 602-[ Fax no. omitted]
JOSE MARTINEZ
PRESTAMOS CDFI LLC
1024 E. Buckeye Rd #270
Phoenix, AZ 85034
RE: SBA Loan No. 1427199001
Mr. Martinez:
As evidenced by the attached documents, I was approved by the SBA for a
PPP loan in May, 2020. Due to the issues outlined in the email send [sic]
to you in August, I have still not received my funds. The SBA records
show this payment was disbursed in May.
I have not received a response from you to my email of August 13th. Nor
have you responded to the emails from Mr. Xu of the SBA. Kindly
provide the courtesy of a response. I can be reached at [tel. no. omitted].
Nancilee Holland”
171.
Despite Holland’s multiple additional attempts to obtain the loan proceeds,
Prestamos failed to fund Holland’s SBA-approved PPP loan.
172.
Prestamos’ failure to fund Holland’s SBA-approved PPP loan deprived Holland
of funds that would have assisted in the operation of her real estate brokerage business and
resulted in lost opportunities and other consequential damages.
41
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Document 106-2
Filed 05/01/24
Page 43 of 118
Prestamos’ Failure to Fund
Plaintiff Owsley’s PPP Loan
173.
When the COVID-19 pandemic began, plaintiff Owsley was in the construction
business in the El Dorado Springs, Missouri area.
174.
Due to the pandemic, Owsley’s construction business lost significant income.
175.
In or about May 2021, Owsley applied for a PPP loan with Prestamos. Owsley
submitted all requested documentation and information.
176.
Also in May 2021, the SBA approved Owsley’s PPP loan application and
assigned it a loan number (SBA Loan Number 4680379004).
177.
Owsley was approved for a PPP loan in the amount of $6,250.00.
178.
On or about May 27, 2021, Owsley received the same form PPP loan promissory
Note and accompanying Loan Documents that plaintiff Marshall had received.
179.
On May 27, 2021, Owsley signed and returned the Loan Documents in order to
obtain the $6,250.00 PPP loan.
180.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Owsley never received the proceeds of
her SBA-approved PPP loan although Prestamos falsely reported to the SBA that it funded her
loan.
181.
Prestamos’ failure to fund Owsley’s SBA-approved PPP loan deprived Owsley of
funds that would have assisted in the operation of her construction business and resulted in lost
opportunities and other consequential damages.
42
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Document 106-2
Filed 05/01/24
Page 44 of 118
Prestamos’ Failure to Fund
Plaintiff Ahmadou’s PPP Loan
182.
When the COVID-19 pandemic began, plaintiff Ahmadou was in the home
healthcare business in the Evanston, Illinois area.
183.
Due to the pandemic, Ahmadou’s construction business lost significant income.
184.
In or about May 2021, Ahmadou applied for a PPP loan with Prestamos.
Ahmadou submitted all requested documentation and information.
185.
Also in May 2021, the SBA approved Ahmadou’s PPP loan application and
assigned it a loan number (SBA Loan Number 8166799007).
186.
Ahmadou was approved for a PPP loan in the amount of $20,832.00.
187.
In May 2021, Ahmadou received the same form PPP loan promissory Note and
accompanying Loan Documents that plaintiff Marshall had received.
188.
Also in May 2021, Ahmadou signed and returned the Loan Documents in order to
obtain the $20,832.00 PPP loan.
189.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Ahmadou never received the proceeds of
his SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
his loan.
190.
Prestamos’ failure to fund Ahmadou’s SBA-approved PPP loan deprived
Ahmadou of funds that would have directly assisted in the operation of his home healthcare
business and resulted in lost opportunities and other consequential damages.
43
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Page 45 of 118
Prestamos’ Failure to Fund
Plaintiff Dervin’s PPP Loan
191.
When the COVID-19 pandemic began, plaintiff Dervin was in the janitorial
business in the Lynwood, Washington area.
192.
Due to the pandemic, Dervin’s janitorial business lost significant income.
193.
In or about May 2021, Dervin applied for a PPP loan with Prestamos. Dervin
submitted all requested documentation and information.
194.
On or about May 14, 2021, the SBA approved Dervin’s PPP loan application and
assigned it a loan number (SBA Loan Number 1895529005).
195.
Dervin was approved for a PPP loan in the amount of $8,385.00.
196.
On May 19, 2021, Dervin received the same form PPP loan promissory Note and
accompanying Loan Documents that plaintiff Marshall had received.
197.
Also on May 19 2021, Dervin signed and returned the Loan Documents in order
to obtain the $8,385.00 PPP loan.
198.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Dervin never received the proceeds of her
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded her
loan.
199.
Prestamos’ failure to fund Dervin’s SBA-approved PPP loan deprived Dervin of
funds that would have directly assisted in the operation of her janitorial business and resulted in
lost opportunities and other consequential damages.
44
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Page 46 of 118
Prestamos’ Failure to Fund
Plaintiff Henderson’s PPP Loan
200.
When the COVID-19 pandemic began, plaintiff Henderson was in the women’s
clothing business in the Macomb, Michigan area.
201.
Due to the pandemic, Henderson’s women’s clothing business lost significant
income.
202.
In or about April 2021, Henderson applied for a PPP loan with Prestamos.
Henderson submitted all requested documentation and information.
203.
On or about April 22, 2021, the SBA approved Henderson’s PPP loan application
and assigned it a loan number (SBA Loan Number 8614908807).
204.
Henderson was approved for a PPP loan in the amount of $1,875.00.
205.
On April 29, 2021, Henderson received the same form PPP loan promissory Note
and accompanying Loan Documents that plaintiff Marshall had received.
206.
Also on April 29, 2021, Henderson signed and returned the Loan Documents in
order to obtain the $1,875.00 PPP loan.
207.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Henderson never received the proceeds of
her SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
her loan.
208.
Prestamos’ failure to fund Henderson’s SBA-approved PPP loan deprived
Henderson of funds that would have directly assisted in the operation of her clothing business
and resulted in lost opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Innis’ PPP Loan
45
Case 5:21-cv-04337-JMG
209.
Document 106-2
Filed 05/01/24
Page 47 of 118
When the COVID-19 pandemic began, plaintiff Innis was in the carpet and
upholstery cleaning business in the Las Vegas, Nevada area.
210.
Due to the pandemic, Innis’ carpet and upholstery cleaning business lost
significant income.
211.
In May 2021, Innis applied for a PPP loan with Prestamos. Innis submitted all
requested documentation and information.
212.
Also in May 2021, the SBA approved Innis’ PPP loan application and assigned it
a loan number (SBA Loan Number 8207338903).
213.
Innis was approved for a PPP loan in the amount of $10,625.00.
214.
On May 26, 2021, Innis received the same form PPP loan promissory Note and
accompanying Loan Documents that plaintiff Marshall had received.
215.
Also on May 26, 2021, Innis signed and returned the Loan Documents in order to
obtain the $10,625.00 PPP loan.
216.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Innis never received the proceeds of his
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded his
loan.
217.
Prestamos failed to fund Innis’ PPP loan despite Innis’ repeated additional
attempts to try to get his SBA-approved PPP loan actually funded. For example, in an October 1,
2021 email to Litza Menendez (“Menendez”), Loan Servicing Specialist for Prestamos and its
parent CPLC, Innis stated as follows:
“hi so what’s the word!? I’m getting emails from the SBA now about applying for
loan forgiveness. I remember you telling me you will probably have to send me a prepaid
card.”
46
Case 5:21-cv-04337-JMG
218.
Document 106-2
Filed 05/01/24
Page 48 of 118
Further, in another email to Menendez on October 12, 2021, Innis stated as
follows (emphasis in original):
“Hello Litza, I’m writing you to give you one more chance to disperse my
money before I file a lawsuit against you. The SBA website is
CURRENT!!! I just got off the phone with them and was told IT IS
CURRENT and that my funds are in someone’s BANK ACCOUNT
THAT ISN’T MINE …… IF YOU THINK IM GOING TO JUST LIE
DOWN AND LET THIS HAPPEN LIKE EVERYONE ELSE U ARE
HIGHLY MISTAKEN……. I knew I wasn’t stupid and did my research
before even contacting you and that your statements were FALSE….. once
again the SBA website IS CURRENT AND SHOWS ME STILL
FUNDED AND THAT MONEY IS IN SOMEONES BANK ACCOUNT
NOT AFFILIATED WITH ME OR BLUE ACORN OR
PRESTAMOS….. DO THE RIGHT THING[.]”
219.
Despite even these additional attempts, Prestamos failed to fund Innis’ loan.
220.
Prestamos’ failure to fund Innis’s SBA-approved PPP loan deprived Innis of
funds that would have directly assisted in the operation of his carpet and upholstery cleaning
business and resulted in lost opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Stalnaker’s PPP Loan
221.
When the COVID-19 pandemic began, plaintiff Stalnaker was in the
homemaker/personal care provider business in the Ravenna, Ohio area, where she continued to
reside at all applicable times.
222.
Due to the pandemic, Stalnaker’s homemaker/personal care provider business lost
significant income.
223.
In or about April 2021, Stalnaker applied for a PPP loan with Prestamos.
Stalnaker submitted all requested documentation and information.
224.
Also in April 2021, the SBA approved Stalnaker’s PPP loan application and
assigned it a loan number (SBA Loan Number 1641908909).
225.
Stalnaker was approved for a PPP loan in the amount of $9,052.00.
47
Case 5:21-cv-04337-JMG
226.
Document 106-2
Filed 05/01/24
Page 49 of 118
On April 29, 2021, Stalnaker received the same form PPP loan promissory Note
and accompanying Loan Documents that plaintiff Marshall had received.
227.
Also on April 29, 2021, Stalnaker signed and returned the Loan Documents in
order to obtain the $9,052.00 PPP loan.
228.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Stalnaker never received the proceeds of
her SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
her loan.
229.
Prestamos’ failure to fund Stalnaker’s SBA-approved PPP loan deprived
Stalnaker of funds that would have directly assisted in the operation of her homemaker/personal
care provider business and resulted in lost opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Jones’ PPP Loan
230.
When the COVID-19 pandemic began, plaintiff Jones was in the delivery service
business in the Golden Valley, Arizona area.
231.
Due to the pandemic, Jones’ delivery service lost significant income.
232.
In or about May 2021, Jones applied for a PPP loan with Prestamos. Jones
submitted all requested documentation and information.
233.
Also in May 2021, the SBA approved Jones’ PPP loan application and assigned it
a loan number (SBA Loan Number 8899718910).
234.
Jones was approved for a PPP loan in the amount of $4,130.00.
235.
On or about May 30, 2021, Jones received the same form PPP loan promissory
Note and accompanying Loan Documents that plaintiff Marshall had received.
48
Case 5:21-cv-04337-JMG
236.
Document 106-2
Filed 05/01/24
Page 50 of 118
Also on May 30, 2021, Jones signed and returned the Loan Documents in order to
obtain the $4,130.00 PPP loan.
237.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Jones never received the proceeds of her
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded her
loan.
238.
In fact, on October 14, 2021 and again on November 2, 2021, the SBA sent
emails to plaintiff Jones stating that she is “eligible for PPP Direct Forgiveness because your
lender has opted in any you have a PPP loan amount of $150,000 OR LESS.”
239.
Despite the SBA’s October 14, 2021 and November 2, 2021 emails inviting
plaintiff Jones to apply for loan forgiveness, plaintiff Jones never received any PPP loan
proceeds.
240.
As Jones summarized in a complaint she filed with the BBB on November 4,
2021:
“I filed and was approved for a PPP loan on April 25th 2021for the amount
of $4130 waited a month started sending emails with no responses besides
the automated ticket creation and a few emails stating that the support
email was no longer active then received loan documents on May 26, 2021
it has been non-stop back and forth with no actual responses or funding
received and now I’m receiving emails from the SBA to file for
forgiveness on a loan I never received”
241.
Prestamos’ failure to fund Jones’ SBA-approved PPP loan deprived Jones of
funds that would have directly assisted in the operation of her delivery service business and
resulted in lost opportunities and other consequential damages.
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Prestamos’ Failure to Fund
Plaintiff Drevnak’s PPP Loan
242.
When the COVID-19 pandemic began, plaintiff Drevnak was in the business of
providing housekeeping services in the Colorado Springs, Colorado area.
243.
Due to the pandemic, Drevnak was not able to provide in-home housekeeping
services with the same frequency and, as a result, lost significant income.
244.
In or about May 2021, Drevnak applied for a PPP loan with Prestamos. Drevnak
submitted all requested documentation and information, including the same standard form Note
and accompanying Loan Documents that plaintiff Marshall received.
245.
On or about May 13, 2021, the SBA approved Drevnak’s PPP loan application
and assigned it a loan number (SBA Loan Number 1842619004). See
https://www.federalpay.org/paycheck-protection-program/georgina-drevnak-colorado-springs-co
(last visited May 22, 2023).
246.
Drevnak was approved for a PPP loan in the amount of $1,250.00.
247.
On or about May 19, 2021, Drevnak signed and returned the Loan Documents in
order to obtain the $1,250.00 PPP loan.
248.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation and additional attempts to obtain the loan
proceeds, Drevnak never received the proceeds of her SBA-approved PPP loan although
Prestamos falsely reported to the SBA that it had funded her loan.
249.
Although the SBA’s records reported that plaintiff Drevnak’s PPP loan had
actually been funded based on false report from Prestamos, Drevnak never received any PPP
loan proceeds despite her additional attempts to actually get her PPP loan funded.
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250.
Document 106-2
Filed 05/01/24
Page 52 of 118
The SBA’s record of the alleged disbursement of Drevnak’s PPP loan proceeds
was based on false data Prestamos provided to the SBA. See
https://www.federalpay.org/paycheck-protection-program/georgina-drevnak-colorado-springs-co
(last visited May 22, 2023).
251.
Prestamos’ failure to fund Drevnak’s SBA-approved PPP loan deprived Drevnak
of funds that would have directly assisted in the operation of her housekeeping business and
resulted in lost opportunities and other consequential damages.
252.
Prestamos’ failure to disburse PPP loan funds to plaintiff Drevnak, the other
Plaintiffs and the members of the class have also left them obligated by way of the parties’
contractual agreements set forth in the Loan Documents to repay funds they never received, with
interest, as noted above. See attached Exhibit A at § 3.
253.
In fact, Prestamos has improperly sought to collect repayment of Drevnak’s
$1,250 PPP loan, plus interest, despite never funding that loan for Drevnak in the first place. In
particular, Drevnak received a statement dated February 1, 2023 from Prestamos identifying the
$1,250 principal amount of the loan; stating that 1% interest was also being charged which is the
interest amount set forth in the parties’ Loan Documents; that $118.44 was then past due; that
$29.61 was the total then current due; and that $148.05 was the total amount then due.
254.
Drevnak also received an email from Defendants on Saturday February 18, 2023
at 8:36 am from an email address of defendant CPLC bearing the tax exempt suffice “.org” -specifically “pppservicing@cplc.org” -- stating that “[t]he Principal and Interest payments
showing in your attached statement need to be paid to avoid the loan from entering into default”;
that, again blurring the distinction between CPLC and Prestamos, “[y]ou will need to email
PPP@cplc.org to obtain any information regarding your PPP loan”; that “[i]f your loan goes into
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default, your business will be placed on the government CAIVRS list and will not be able to
receive any sort of government assistance or a government backed loan in the future”; and that
“[y]ou can apply for forgiveness at any time during your business’s PPP term, but you will need
to continue making Principal and Interest payments to stay current with your loan.”
255.
Defendants’ representations concerning forgiveness were also false. In truth,
Drevnak could not and cannot properly apply for forgiveness because she cannot represent that
she used her PPP loan for proper purposes under the PPP since she never received her PPP loan
proceeds in the first place.
256.
Plaintiff Drevnak and the other Plaintiffs and members of the class have also been
injured in that the loan forgiveness requires affirming, under threat of criminal penalty, that PPP
loan funds were used in a particular manner and they could not so affirm the nature of the use of
funds they never received.
257.
Plaintiff Drevnak is disabled and has separately qualified for and been receiving
and substantially relying for her subsistence on Supplemental Security Income (“SSI”) from the
U.S. Social Security Administration. Fearful that she would lose her SSI, Drevnak with the
assistance of her daughter (who formerly served with the U.S. Special Forces) repeatedly
attempted to contact Defendants but failed to have Defendants stop seeking repayment of the
PPP loan and otherwise damage Drevnak’s credit or jeopardize her continued eligibility to
receive SSI.
258.
To the contrary, Defendants subsequently continued in their efforts to collect from
Drevnak repayment of the PPP loan principal plus interest and actually declared her to be in
default. In an email on February 28, 2023 again from the email address “pppservicing@cplc.org”
with the subject “DEMAND LETTER” (original emphasis), Defendants stated as follows:
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“NOTICE IS HEREBY GIVEN that 1842619004 (‘Borrower’) under and pursuant to the terms
of those Promissory Notes, between borrower and Prestamos CDFI, LLC (Prestamos) dated
5/19/2021 (‘Loan Documents’) in the original amounts [sic] of $1,250.00”; “The following terms
of the Loan Documents have been violated and are Events of Default under the Loan
Documents: 1. Loan Agreement: Nonpayment of any installment of principal of [sic] interest
when due; or 2. Note: the Borrower’s failure to make any payments when due under this Note,
which continues for a period of ten (10) days after such due date”; that $1,271.60 was the total
amount then due; that Drevnak must “remit the Total amount due by 03/06/2023”; that “[i]f this
amount is not received, Prestamos will take whatever actions it deems necessary to protect its
capital”; and that “[t]he defaults specified in this letter do not in any way waive Prestamos’ right
to declare any other or additional defaults, which may exist as of, or after, the date of this letter.”
Prestamos’ Failure to Fund
Plaintiff Martin’s PPP Loan
259.
When the COVID-19 pandemic began, plaintiff Martin operated a driving service
in the Midvale, Utah area.
260.
Due to the pandemic, Martin’s driving business lost significant income.
261.
Accordingly, in or about May 2021, Martin also applied for a PPP loan.
262.
On or about May 13, 2021, the SBA approved Martin’s PPP loan application and
assigned it a loan number (SBA Loan Number 1721969008).
263.
Martin was approved for a PPP loan in the amount of $10,865.00.
264.
On or about May 19, 2021, Martin received the same form PPP loan promissory
Note and accompanying additional Loan Documents that all Plaintiffs also received.
265.
Additionally, on or about May 19, 2021, Martin signed and returned the Loan
Documents in order to obtain the $10,865.00 PPP loan.
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266.
Document 106-2
Filed 05/01/24
Page 55 of 118
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Martin never received the proceeds of his
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded his
loan.
267.
Prestamos’s failure to fund the SBA-approved loans of plaintiff Martin and the
class after locking them into the Loan Documents also prevented plaintiff Martin and the other
Plaintiffs and members of the class from pursuing their loan requests with another PPP lender.
268.
Although the SBA’s records reported that plaintiff Martin’s PPP loan had actually
been funded, Martin never received any PPP loan proceeds despite his attempts to actually get
his PPP loan funded.
269.
The SBA’s record of the alleged disbursement of Martin’s PPP loan proceeds was
based on false data Prestamos provided to the SBA. See https://www.federalpay.org/paycheckprotection-program/john-martin-midvale-ut (last visited May 23, 2023).
270.
Prestamos’ failure to fund Martin’s SBA-approved PPP loan deprived Martin of
funds that would have assisted in the operation of his driving business and resulted in lost
opportunities and other consequential damages.
271.
Prestamos’ failure to disburse PPP loan funds to plaintiff Martin and the other
Plaintiffs and members of the class after agreeing to do so has also left them obligated under the
Loan Documents to repay funds to Prestamos they never received in the first place, with interest.
Prestamos’ Failure to Fund
Plaintiff Beattie’s PPP Loan
272.
When the COVID-19 pandemic began, plaintiff Beattie was in the construction
business in the Fort Worth, Texas area.
273.
Due to the pandemic, Beattie’s construction business lost significant income.
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274.
Document 106-2
Filed 05/01/24
Page 56 of 118
In or about April 2021, Beattie applied for a PPP loan with Prestamos. Beattie
submitted all requested documentation and information.
275.
On or about April 23, 2021, the SBA approved Beattie’s PPP loan application and
assigned it a loan number (SBA Loan Number 8377238802).
276.
Beattie was approved for a PPP loan in the amount of $20,832.00.
277.
On or about April 30, 2021, Beattie received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
278.
Also on or about April 30, 2021, Beattie signed and returned the Loan Documents
in order to obtain the $20,832.00 PPP loan.
279.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Beattie never received the proceeds of his
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded his
loan.
280.
Although the SBA’s records reported that plaintiff Beattie’s PPP loan had actually
been funded, Beattie never received any PPP loan proceeds despite his attempts to actually get
his PPP loan funded.
281.
The SBA’s record of the alleged disbursement of Beattie’s PPP loan proceeds was
based on false data Prestamos provided to the SBA. See https://www.sba.com/ppp-fundedcompanies/texas/ezra-beattie-12167154 (last visited May 23, 2023).
282.
Prestamos’ failure to fund Beattie’s SBA-approved PPP loan deprived Beattie of
funds that would have directly assisted in the operation of his construction business and resulted
in lost opportunities and other consequential damages.
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283.
Document 106-2
Filed 05/01/24
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Prestamos’ failure to disburse PPP loan funds to plaintiff Beattie and the other
Plaintiffs and members of the class after agreeing to do so has also left them obligated under the
Loan Documents to repay funds to Prestamos they never received in the first place, with interest.
Prestamos’ Failure to Fund
Plaintiff Lloyd’s PPP Loan
284.
When the COVID-19 pandemic began, plaintiff Lloyd was in the computer
service business in the Houston, Texas area.
285.
Due to the pandemic, Lloyd’s computer service business lost significant income.
286.
In or about May 2021, Lloyd applied for a PPP loan with Prestamos. Lloyd
submitted all requested documentation and information.
287.
On or about May 20, 2021, the SBA approved Lloyd’s PPP loan application and
assigned it a loan number (SBA Loan Number 4538249010).
288.
Lloyd was approved for a PPP loan in the amount of $20,832.00.
289.
On or about May 31, 2021, Lloyd received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
290.
On or about May 31, 2021, Lloyd signed and returned the Loan Documents in
order to obtain the $20,832.00 PPP loan.
291.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Lloyd never received the proceeds of his
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded his
loan.
292.
Although the SBA’s records reported that plaintiff Lloyd’s PPP loan had actually
been funded, Lloyd never received any PPP loan proceeds despite his attempts to actually get his
PPP loan funded.
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293.
Document 106-2
Filed 05/01/24
Page 58 of 118
The SBA’s record of the alleged disbursement of Lloyd’s PPP loan proceeds was
based on false data Prestamos provided to the SBA. See https://www.federalpay.org/paycheckprotection-program/gregory-lloyd-houston-tx (last visited May 23, 2023).
294.
Prestamos’ failure to fund Lloyd’s SBA-approved PPP loan deprived Lloyd of
funds that would have assisted in the operation of his computer services business and resulted in
lost opportunities and other consequential damages.
295.
Prestamos’ failure to disburse PPP loan funds to all Plaintiffs and class members
after agreeing to do so, has left them also both unable to obtain loan forgiveness as the PPP was
designed to do and in fact did concerning a large number of borrowers, and obligated under the
Loan Documents to repay funds to Prestamos that they never received, with interest.
296.
In fact, and as is the case with plaintiff Drevnak, defendant Prestamos has also
improperly sought to collect repayment of plaintiff Lloyd’s $20,832.00 PPP loan, plus interest,
despite Prestamos’ failure to fund that loan in the first place.
297.
In particular, plaintiff Lloyd also received a statement dated February 1, 2023
from Prestamos identifying the $20,832.00 principal amount of the loan; stating that 1% interest
was also being charged which is the interest amount set forth in the parties’ Loan Documents;
that $1,973.60 was then past due; that $493.40 was the then total currently due; and that
$2,467.00 was the then total amount due.
298.
Also like Drevnak, Lloyd also received the same form email from Defendants the
same Saturday, February 18, 2023, from the email address “pppservicing@cplc.org” stating that
“[t]he Principal and Interest payments showing in your attached statement need to be paid to
avoid the loan from entering into default”; that, again blurring the distinction between CPLC and
Prestamos, “[y]ou will need to email PPP@cplc.org to obtain any information regarding your
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PPP loan”; that “[i]f your loan goes into default, your business will be placed on the government
CAIVRS list and will not be able to receive any sort of government assistance or a government
backed loan in the future”; and that “[y]ou can apply for forgiveness at any time during your
business’s PPP term, but you will need to continue making Principal and Interest payments to
stay current with your loan.”
299.
Once again, Prestamos’ representations concerning loan forgiveness were also
false. In truth, Lloyd could not and cannot properly apply for forgiveness because he cannot
represent that he used his PPP loan for proper purposes under the PPP since he never received
his PPP loan proceeds in the first place.
300.
Plaintiff Lloyd and all Plaintiffs and class members have also been injured in that
the loan forgiveness requires affirming, under threat of criminal penalty, that PPP loan funds
were properly used as the PPP intended, and Plaintiffs and class members cannot so affirm since
Prestamos failed to disburse the loan proceeds to them at all.
Prestamos’ Failure to Fund
Plaintiff Johnson’s PPP Loan
301.
When the COVID-19 pandemic began, plaintiff Johnson was in the homecare
business in the Merrillville, Indiana area.
302.
Due to the pandemic, Johnson’s homecare business lost significant income.
303.
In or about May 2021, Johnson applied for a PPP loan with Prestamos. Johnson
submitted all requested documentation and information.
304.
Also in May 2021, the SBA approved Johnson’s PPP loan application and
assigned it a loan number.
305.
Johnson was approved for a PPP loan in the amount of $20,832.00.
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Case 5:21-cv-04337-JMG
306.
Document 106-2
Filed 05/01/24
Page 60 of 118
On or about May 27, 2021, Johnson received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
307.
Also on or about May 27, 2021, Johnson signed and returned the Loan
Documents in order to obtain the $20,832.00 PPP loan.
308.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Johnson never received the proceeds of
her SBA-approved PPP loan although Prestamos falsely reported to the SBA that it had funded
her loan.
309.
Prestamos’ failure to fund the SBA-approved loans of plaintiff Johnson and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented Plaintiffs and the members of the class from pursuing
their loan requests with another PPP lender.
310.
Although the SBA’s records reported that plaintiff Johnson’s PPP loan had
actually been funded, Johnson never received any PPP loan proceeds despite her attempts to
actually get her PPP loan funded.
311.
The SBA’s record of the alleged disbursement of Johnson’s PPP loan proceeds
was based on false data Prestamos provided to the SBA. See
https://www.federalpay.org/paycheck-protection-program/alisha-johnson-hammond-in (last
visited May 30, 2023).
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Case 5:21-cv-04337-JMG
312.
Document 106-2
Filed 05/01/24
Page 61 of 118
Prestamos’ failure to fund Johnson’s SBA-approved PPP loan deprived Johnson
of funds that would have assisted in the operation of her homecare business and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Marvel’s PPP Loan
313.
When the COVID-19 pandemic began, plaintiff Marvel was in the cosmetics
business in the Natchez, Mississippi area.
314.
Due to the pandemic, Marvel’s cosmetics business lost significant income.
315.
In or about May 2021, Marvel applied for a PPP loan with Prestamos. Marvel
submitted all requested documentation and information.
316.
Also in May 2021, the SBA approved Marvell’s PPP loan application and
assigned it a loan number.
317.
Marvell was approved for a PPP loan in the amount of $19,020.00.
318.
On or about May 13, 2021, Marvel received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
319.
Also on or about May 13, 2021, Marvel signed and returned the Loan Documents
in order to obtain the $19,020.00 PPP loan.
320.
Despite properly and timely completing, signing and submitting the Loan
Documents and all other required loan documentation, Marvel never received the proceeds of her
SBA-approved PPP loan although Prestamos falsely reported to the SBA that it funded her loan.
321.
Prestamos’ failure to fund the SBA-approved loans of plaintiff Marvel and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented plaintiff Marvel and the members of the class from
pursuing their loan requests with another PPP lender.
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322.
Document 106-2
Filed 05/01/24
Page 62 of 118
Although the SBA’s records reported that plaintiff Marvel’s PPP loan had
actually been funded, Marvel never received any PPP loan proceeds despite her attempts to
actually get her PPP loan funded. The additional follow-up attempts that Marvel unsuccessfully
took to get her PPP loan funded included numerous attempts to call, email and text Prestamos
among other things.
323.
The SBA’s record of the alleged disbursement of Marvel’s PPP loan proceeds was
based on false data Prestamos provided to the SBA. See https://www.federalpay.org/paycheckprotection-program/lametria-marvel-natchez-ms (last visited July 18, 2023).
324.
Prestamos’ failure to fund Marvel’s SBA-approved PPP loan deprived Marvel of
funds that would have assisted in the operation of her cosmetics business and resulted in lost
opportunities and other consequential damages.
325.
Prestamos’ failure to disburse PPP loan funds to Plaintiffs and class members
after agreeing to do so, has also left them unable to obtain forgiveness of the loan proceeds as the
PPP was designed to do and in fact did concerning a large number of borrowers, and also
obligated under the Loan Documents to repay funds to Prestamos that they never received, with
interest.
Prestamos’ Failure to Fund
Plaintiff Grichar’s PPP Loan
326.
When the COVID-19 pandemic began, plaintiff Grichar was in the driving
business in the Stigler, Oklahoma area.
327.
Due to the pandemic, Grichar’s driving service business lost significant income.
328.
In or about May 2021, Grichar applied for a PPP loan with Prestamos. Grichar
submitted all requested documentation and information.
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329.
Document 106-2
Filed 05/01/24
Page 63 of 118
Also in May 2021, the SBA approved Grichar’s PPP loan application and
assigned it a number.
330.
Grichar was approved for a PPP loan in the amount of $5,207.00.
331.
On or about May 22, 2021, Grichar received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
332.
Also on or about May 22, 2021, Grichar signed and returned the Loan Documents
in order to obtain the $5,207.00 PPP loan. See https://www.federalpay.org/paycheck-protectionprogram/guy-grichar-stigler-ok.
333.
Despite properly and timely completing and submitting the Loan Documents and
all other required loan documentation, Grichar never received the proceeds of his SBA-approved
PPP loan although Prestamos falsely reported to the SBA that it had funded her loan.
334.
Prestamos’ failure to fund the SBA-approved loans of plaintiff Grichar and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented plaintiff Grichar and the members of the class from
pursuing their loan requests with another PPP lender.
335.
Although the SBA’s records reported that plaintiff Grichar’s PPP loan had
actually been funded and “Paid in Full or Forgiven” Grichar never received any PPP loan
proceeds despite his attempts to actually get his PPP loan funded. See
https://www.federalpay.org/paycheck-protection-program/guy-grichar-stigler-ok.
336.
The SBA’s record of the alleged disbursement of Grichar’s PPP loan proceeds
was based on false data Prestamos provided to the SBA.
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337.
Document 106-2
Filed 05/01/24
Page 64 of 118
Prestamos’ failure to fund Grichar’s SBA-approved PPP loan deprived Grichar of
funds that would have assisted in the operation of his driving service and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Horne’s PPP Loan
338.
When the COVID-19 pandemic began, plaintiff Horne operated a music business.
339.
Due to the pandemic, Horne’s business lost significant income.
340.
In or about May 2021, Horne applied for a PPP loan with Prestamos. Horne
submitted all requested documentation and information.
341.
Also in May 2021, the SBA approved Horne’s PPP loan application and assigned
it a number (SBA Loan Number 8943108902).
342.
Horne was approved for a PPP loan in the amount of $14,165.00.
343.
On or about May 28, 2021, Horne received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
344.
Also on or about May 28, 2021, Horne signed and returned the Loan Documents
in order to obtain the $14,165.00 PPP loan.
345.
Despite properly and timely completing and submitting the Loan Documents and
all other required loan documentation, Horne never received the proceeds of his SBA-approved
PPP loan although Prestamos falsely reported to the SBA that it had funded his loan.
346.
Prestamos’ failure to fund the SBA-approved loans of plaintiff Horne and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented plaintiff Horne and the members of the class from
pursuing their loan requests with another PPP lender.
63
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347.
Document 106-2
Filed 05/01/24
Page 65 of 118
Although the SBA’s records reported that plaintiff Horne’s PPP loan had actually
been funded based on false data from Prestamos, Horne never received any PPP loan proceeds
despite his attempts to actually get his PPP loan funded.
348.
Prestamos’ failure to fund Horne’s SBA-approved PPP loan deprived Horne of
funds that would have assisted in the operation of his music business and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund Plaintiff
Etuknwa’s PPP Loan
349.
When the COVID-19 pandemic began, plaintiff Etuknwa operated a used car
business.
350.
Due to the pandemic, Etuknwa’s business lost significant income.
351.
In or about May 2021, Etuknwa applied for a PPP loan with Prestamos. Etuknwa
submitted all requested documentation and information.
352.
Also in May 2021, the SBA approved Etuknwa’s PPP loan application and
assigned it a number (SBA Loan Number 1166909110).
353.
Etuknwa was approved for a PPP loan in the amount of $20,832.00.
354.
Also in or about May 2021, Etuknwa received the same form PPP loan
promissory Note and accompanying Loan Documents that all Plaintiffs also received.
355.
Also in May 2021, Etuknwa signed and returned the Loan Documents in order to
obtain the $20,832.00 PPP loan.
356.
Despite properly and timely completing and submitting the Loan Documents and
all other required loan documentation, Etuknwa never received the proceeds of his SBAapproved PPP loan although Prestamos falsely reported to the SBA that it had funded his loan.
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357.
Document 106-2
Filed 05/01/24
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Prestamos’ failure to fund the SBA-approved loans of plaintiff Etuknwa and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented plaintiff Etuknwa and the members of the class from
pursuing their loan requests with another PPP lender.
358.
Although the SBA’s records reported that plaintiff Etuknwa’s PPP loan had
actually been funded based on false data from Prestamos, Etuknwa never received any PPP loan
proceeds despite his attempts to actually get his PPP loan funded.
359.
Prestamos’ failure to fund Etuknwa’s SBA-approved PPP loan deprived him of
funds that would have assisted in the operation of his used car business and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund
Plaintiff Bradley Smith’s PPP Loan\
360.
When the COVID-19 pandemic began, plaintiff Smith operated a food catering
business.
361.
Due to the pandemic, Smith’s business lost significant income.
362.
In or about May 2021, Smith applied for a PPP loan with Prestamos. Smith
submitted all requested documentation and information.
363.
Also in May 2021, the SBA approved Smith’s PPP loan application and assigned
it a number (SBA Loan Number 8672599009).
364.
Smith was approved for a PPP loan in the amount of $12,500.00.
365.
Also in or about May 2021, Smith received the same form PPP loan promissory
Note and accompanying Loan Documents that all Plaintiffs also received.
366.
Also in or about May 2021, Smith signed and returned the Loan Documents in
order to obtain the $12,500.00 PPP loan.
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367.
Document 106-2
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Despite properly and timely completing and submitting the Loan Documents and
all other required loan documentation, Smith never received the proceeds of her SBA-approved
PPP loan although Prestamos falsely reported to the SBA that it had funded her loan.
368.
Prestamos’ failure to fund the SBA-approved loans of plaintiff Smith and the
other Plaintiffs and members of the class after locking them into the Loan Documents and failing
to properly fund the loans also prevented plaintiff Smith and the members of the class from
pursuing their loan requests with another PPP lender.
369.
Although the SBA’s records reported that plaintiff Smith’s PPP loan had actually
been funded, Smith never received any PPP loan proceeds despite her attempts to actually get her
PPP loan funded.
370.
Prestamos’ failure to fund Smith’s SBA-approved PPP loan deprived Smith of
funds that would have assisted in the operation of her food catering business and resulted in lost
opportunities and other consequential damages.
Prestamos’ Failure to Fund Other
SBA-Approved Class Member
Borrower PPP Loans
371.
Numerous other similarly situated borrowers have been damaged by Prestamos’
failure to fund their SBA-approved PPP loans and have complained about their experiences to
the BBB and via social media sites.
372.
For example, the BBB’s website identifies a number of complaints against
Prestamos:1
a.
“I was notified on June 2, 2021 that my loan would be funded by
Prestamos CDFI, LLC within 3-6 business days. … I have never been
funded.” (August 2, 2021 post);
1
Emphasis is in the original in this Complaint unless otherwise noted or the context otherwise
requires.
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Filed 05/01/24
Page 68 of 118
b.
“I was approved a PPP loan in May and SBA has [it] that the loan was
disbursed … in May and I haven’t received a dime, cannot reach anyone
via phone and all emails take me around in circles.” (July 12, 2021 post);
c.
“I was later texted approval for funding on 6/3/2021. Since then I have not
received the funds. When I check online support it says DENIED. I am
frustrated as to what is going on? I reached out to support online email and
text but no change in status. When I checked public records online it says
my name address and funding amount as if I have been funded already.
Please help!” (July 12, 2021) (emphasis in original);
d.
“Its been over 25+ business days since date of signing loan docs. … On
the sba ppp website (capital access financial system) [it says] that my
funds HAVE been dispersed [sic] by Prestamos CDFI, LLC which isn’t
true because I definitely don’t have the funds. Since Prestamos CDFI,
LLC is my lender I hold them responsible.” (July 9, 2021) (emphasis in
original);
e.
Prestamos “works with Blueacorn and actually is the lender who signed
off on the loan that was meant for me for PPP. … They keep saying
Blueacorn is the company that has your money despite my having entered
into a contract with Prestamos. They are continuing to accrue interest for
over a month now that I owe on money I never received.” (July 7, 2021);
f.
Prestamos “is extremely I mean extremely hard to get in contact with. …
I’ve called EVERY number on their site and have gotten in contact with
no one.” (July 6, 2021) (emphasis in original); and
g.
“I applied for the *** PPP Loan online with BlueAcorn (lender servicing
provider) in May 2021. *** approved by PPP Loan on May 26, 2021 and
Prestamos CDFI, LLC is the lender and my loan should have been
disbursed within 10 days of my *** approval date or 20 days the latest. It
has been more than 1 month and I have not received my funds. I sent
multiple emails to Prestamos and also left voicemail messages within the
past 2 weeks, but Prestamos has not responded at all. My loan status is
active but not fully disbursed according to the ProPublicas online
information which claimed to come from ***. I will not be responsible to
pay back a loan I never received. I have not canceled my loan either and
need it desperately for my business and to support my 2 sons.” (July 2,
2021).
See BBB, Prestamos CDFI LLC, available at Prestamos CDFI LLC | Complaints | Better
Business Bureau® Profile (bbb.org) (last visited May 1, 2022).
373.
Similarly, according to complaints posted publicly on the Internet:
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Filed 05/01/24
Page 69 of 118
a.
“WHERE IS OUR MONEY!??????? ALL THE OBSTACLES & HOOPS
SOMEONE NEEDS TO BE ACCOUNTABLE SINCE APRIL
WAITING ON WHAT NOW‼⁉BLUEACORN & PRESTAMOS HAVE
BROKEN THEIR PROMISES!!!! WE NEED A RESPONSE NOW.”
(August 8, 2021) Available at
https://www.reddit.com/r/BlueAcornPrestamos/comments/p1eyr2/where_i
s_our_money_all_the_obstacles_hoops/;
b.
“I’m pissed I signed 5/27 and still nothing no emails no nothing I call
prestamos they say call blue acorn I call them they say the same shit
somebody help me before I lose my entire business please!” (July 2, 2021)
Available at
https://www.reddit.com/r/BlueAcornPrestamos/comments/occrqy/im_piss
ed_i_signed_527_and_still_nothing_no/;
c.
“I GOT EVERYTHING, SIGNED AND WAS WAITING FOR MY
DISBURSEMENT. LAST NIGHT I RECEIVED AN EMAIL & TEXT
SAYING THAT MY ID WAS BLURRY AND MY IDENTITY
NEEDED TO BE VERIFIED. I DID ALL THAT (AFTER OVER A
HOUR OF CRASHING) JUST TO HAVE MY BA STATUS START
BACK AT STAGE 1 AND NOW I AM NOT IN FUNDING STATUS
ANYMORE. I AM BEYOND PISSED. I HAVE BEEN WAITING
OVER A MONTH.” (DATE) Available at
https://www.reddit.com/r/Blueacorn/comments/n5dk8y/prestamos_signers
_427430/ ;
d.
“I was approved 5/26, signed documents 6/2 my lender is Prestamos as
well. Haven’t heard anything from them & I opted in for the dash card as
well. Called them to see if my card was shipped I sat on hold for 2 hours
& they disconnected my call smh.” (June 28, 2021) Available at
https://www.reddit.com/r/EIDLPPP/comments/o19x77/has_anyone_who_
signed_on_62_been_funded_through/;
e.
“Has anyone who signed on 6/2 been funded through blue acorn? My
lender is Prestamos and I opted in for the dash card (which I still haven’t
received). I was approved 5/29 and signed 6/2. I’m getting a bit
discouraged, but trying to keep the faith. Time are HARD.” (June 16,
2021) Available at
https://www.reddit.com/r/EIDLPPP/comments/o19x77/has_anyone_who_
signed_on_62_been_funded_through/;
f.
“BLUEACORN/ JUNE SIGNERS/PRESTAMOS / REJECTED FUNDS/
UBI/ OPT FOR DASHCARD Can someone share how long was their
experience when funds were rejected by your bank. Dave’s banking
rejected/returned my funds on 06/14 how long before I’ll receive an email
to opt for dash card. I have chatted, message them on Twitter and put in
multiple tickets with support still no luck no email just automated
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Page 70 of 118
responses from support and live chat representative just tell me to contact
support which is a dead end. Will I still get funded or will this process be a
long experience? Seems like it’s already been a long time I’m just over it
at this point! Somebody please help.” (July 12, 2021) Available at
https://www.reddit.com/r/EIDLPPP/comments/oitaff/blueacornjune_signe
rsprestamosrejected/;
g.
“They keep telling us that our funds are guaranteed, to "REST ASSURED,
YOU WILL BE FUNDED." But, Federal Law states that lenders have 10
calendar days to fund the loan after the PLP or SBA LOAN NUMBER is
granted, and AFTER 20 DAYS, THE LOAN WILL BE CANCELED IF
ALL NECESSARY PAPERWORK IS NOT TURNED IN. Blue Acorn
and Prestamos have made it impossible to get in touch with them ON
PURPOSE, bc they do not plan on doing anymore work to fund anyone,
and they WILL NOT BE REACHING OUT to anyone who is lacking any
paperwork - paperwork THEY NEVER ASKED FOR IN THE FIRST
PLACE!! At this point, I think it would be wise to send in everything you
have (to the SBA? to prestamosinfo@cplc?) that proves you have a
business that was in operation before 2020, ie. bank statements, w-2s,
everything. Still, they will avoid funding your loan like the plague. They
will find some reason for your loan to be denied, even after you have an
SBA loan #, due to the 20 day cancelation clause in the Interim Rules. WE
ARE NOT GOING TO BE FUNDED FOLKS, ITS OVER. SERIOUSLY,
LAWYER UP, BECAUSE THIS IS A VIOLATION OF THE UNFAIR
AND DECEPTIVE TRADE PRACTICES ACT, which pays 3X damages
(triple damages). These companies are betting on us not being legitimate
business owners, and not being able to prove that we are, and moreover,
scared to get the authorities involved.” (June 15, 2021) Available at
https://www.reddit.com/r/PPPLoans/comments/o0qcxv/blue_acorn_presta
mos_waiting_until_20_days_passed/;
h.
“So she created a ticket and said she couldnt tell me what the error was
until they reached out to me. Not sure if I need to verify questions like
everyone has been talking about and I got lucky to ask them now or else I
would never come across it because they wont tell you or email you about
it. Or there really is an error which I guess I will find out till they tell me.”
(May 5, 2021) Available at
https://www.reddit.com/r/PPPLoans/comments/n3x0zj/blueacorn_if_you_
got_your_loan_from_prestamos/; and
i.
“Had the same error issue had to resend my ID as well as answer
verification questions, originally signed on the evening of the 28th, my
issue is the never reached out me about it I had to reach out and ask them,
hopefully that all I need to do����” (May 5, 2021). Available at
https://www.reddit.com/r/PPPLoans/comments/n3x0zj/blueacorn_if_you_
got_your_loan_from_prestamos/.
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Case 5:21-cv-04337-JMG
j.
Document 106-2
Filed 05/01/24
Page 71 of 118
Cody Brooks
November 6, 2021
“Approved, funds disbursed, prestamos and blueacorn said they weren’t
able to approve me, federalpaygo site shows this ppp loans been disbursed
to me but haven’t received anything and the only thing that was on my
mind was how shi**y it’d be to not only never receive the funds but to
have to pay it back as well along with interest so I did how I felt best after
Prestamos underwriter said I have a an email confirming I don’t have
responsibility for the funds and went ahead and applied for the forgiveness
… prestamos accepted it and sent it off to the sba which was fully remitted
by the sba. Can’t apply for forgiveness unless u were approved and funds
were disbursed.. I’ve tried speaking with blueacorn and Prestamos several
times stating I have all the documentation needed for this from the
beginning to the promissory note to “disbursement and forgiveness” they
haven’t replied back anything but forward what I’ve sent them back to me.
Literally took out a loan from some close friends and family in the amount
of the ppp loan to cover payroll and expenses and still haven’t received
anything yet when I was suppose to have it in May 2021.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
k.
Kirt McReynolds
November 2, 2021
“Funds sent back to prestamos and haven’t recieved a dime since..
approved in May”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
l.
Judy Padilla
October 31, 2021
“I was funded and my bank returned it it’s been funded since June 14 but I
still don’t have it”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
m.
Nikki Dailey
October 30, 2021
“I was also approved by Prestamos CDFI, then denied and never received
funds and SBA is requesting that I apply for forgiveness. They
continuously made up fictitious information regarding the inability to fund
my loan need to join this class action law suit”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
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Case 5:21-cv-04337-JMG
n.
Document 106-2
Anthonia Johnson
Filed 05/01/24
Page 72 of 118
October 27, 2021
“Was approved by prestmos than denied never funded now being asked to
apply for loan forgiveness on a loan I never got”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
o.
Susan Hart
October 28, 2021
“Please include me , was approved and never funded and have even be
approved for forgiveness.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
p.
Kristin Dailey
October 27, 2021
“Stole my loan my business is about to bankrupt as well how do I add
myself to the class action law suit prestamos cdfi had me sign for loan but
didn’t give it to me”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
q.
Danny Shields
October 21, 2021
“I am actually about to be interviewed next week for a follow up piece to
BlueAcorn/Prestamos PPP loan article that I read that infuriated me so
much I reached out to the reporter and she is doing a follow up article
based on the massive number of us who were swindled by these
organizations. I too had my signed and approved loan w/ Prestamos and
had my money returned after I was approved and that was keystone issue
that probably links each and everyone of us, the money got returned. Than
instead of standing by Blueacorns whole oh if you are SBA approved,
your funds are earmarked and set aside for you, that was not the case. I
had an assistant of my states SBA representative call me one afternoon
and in a profanity laced provision of facts, advised me of the whole
situation and how they simply moved beyond those unfortunate enough to
have funds returned and continued funding as many as they could.
Hopefully that is the case and they didnt just simply steal the money. But
either way, I am owed money and I have been waiting and aching for this
process of a class action to start, ever since I was blatantly professing to
Blueacorn and Prestamos that it was coming and when I was trying to
spread awareness on Reddit to those naive enough to think this wasnt the
case. Now I see they recently just had mass denials for all those who
continued to submit tickets wondering where their approved loan was in
71
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Document 106-2
Filed 05/01/24
Page 73 of 118
this shady process. It’s disgusting. I need what I am owed and much more
for the mental anguish and the fact that this was a company federally
backed and advocated who not only didnt do what they claimed but did it
to a certain segment of the populace that at the time were specifically
being targeted to receive this assistant and everyone else was cut off since
their was such a dire need for it amongst the lower classes. All these other
fraudsters and unscrupulous individuals were having a free for all in being
allowed to abuse this program, and when I legitimately provided all
approved and required documentation, I get the third degree and am
denied after having been approved by Blueacorn, a company that
perpetrated fraud outright initially, and now say they are denying me after
doing a secondary review, a review that was done by the SBA and
approved and not within their purview to even attempt. Hopefully this
lawsuit goes after Blueacorn just as much as Prestamos, because you
couldnt even reach Prestamos. Only lender I’ve ever heard of that defers
to the middleman for all servicing, questions or funding after they signed a
contract between myself them and the SBA. Ridiculous. So glad this is
coming to the light because their are hundreds of questions that I demand
be answered!”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
r.
Shannon Black
October 19, 2021
“Please include me as well. I too was approved a loan from Prestomos and
still haven’t received payment. SBA sent me an email informing me that I
can now apply for forgiveness on the loan I never received. According to
their records loan was dispersed 6/2/21. I am deviated to learn that the
lender has done this to hundreds of thousands of struggling Americans and
their families fraudulently using this crisis to steal from the ones who need
it the most and the U.S. Government whom intended funds to quickly
reach businesses in greatest need.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
s.
Candace Cook
October 18, 2021
“I had prestamos as a lender too and they never funded my ppp loan
although I was approved”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
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Case 5:21-cv-04337-JMG
t.
Document 106-2
Angela Joya
Filed 05/01/24
Page 74 of 118
October 16, 2021
“Yes please add me”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
u.
Dustin Estep
November 22, 2021
“This is the same exact thing that Happened to me. It was May when
approved and disbursed. As of today im still showing on the sba website
as fully dusbursed and current”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
v.
Kimberly
November 13, 2021
“I filed a complaint back in April when I signed paper work for funding
they sent to my account but then withdrew it some how saying payment
ledger and I was told they would send me a prepaid card and it never came
and when I tried to speak to some one they wanted my tax return again
and then told me I wasn’t approved but it says I received it and I looked at
my paper work and it has another receiptiant named Jose [M]artinez and I
have absolutely no idea who that is I tried to get help from the SBA they
told me that I had to get ahold of the lender and that is impossible”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
w.
Jacqueline Smith
November 12, 2021
“I was approved and given an SBA number on May 20th 2021. My bank
rejected my funds on June 3rd 2021. On August 30th I opted for the dash
prepaid card and I’m still waiting. I have filed several tickets with blue
acorn I have contacted the SBA twice and they have noted and it escalated
my account. And here it is now November 12th and I am still waiting I
just keep getting told to be patient.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
x.
Jessica Moore
November 11, 2021
73
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Document 106-2
Filed 05/01/24
Page 75 of 118
“I was approved and received a SBA loan number may 31st 2021 but
never recieved a dime. After months of trying to get my money they
randomly sent me an ensul stating I was now denied and stated nothing
else, even though I was already approved and funds had already been sent
but supposedly my bank sent them back and all I needed to do was update
new banking info but this took them 2 months but instead of resending to
my new bank info they said I was denied but to this day I still have an
SBA approved loan number and SBA still shows my loan was disbursed to
me yet I havent seen a dime. Nobody will get back to me from either blue
acorn, Prestamos or SBA yet I get continuous emails about being
approved for loan forgiveness on a loan I never got. This is ridiculous.
Someone help!”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
y.
Jessica Moore
December 1, 2021
“Oh and up to date now. Prestamos approved my loan forgiveness and
SBA processed it and paid them for a loan I NEVER RECEIVED! I
contacted them and told them if I was denied after being given an SBA
loan number and money being sent to me then returned to lender then why
did the lender approve my forgiveness for a loan they never paid me and
then the SBA approved it and sent the lender the money for my loan that I
NEVER RECIEVED?!?! This is absolutely insane! Idk what to do now.
I’ve been approved and forgiven for a loan i haven’t seen a dime of ??!?”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
z.
Jacqueline Schementi
November 10, 2021
“Yes. Same scenario here, but with different lender. Called SBA who said
I was fine and should have gotten the disbursement. Even set up in SBA
system”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
aa.
Asia Adoibrahim
November 8, 2021
“Yes I’ll was approve thru blue acorns was suppose[d] to be funded by
prestamos they told me to reverify I did. Then they just put me on hold
could reach any one. Just email …told me. Their working hard to. Get me
my funds and that the loan were sent back ! my bank has no log of that
74
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Document 106-2
Filed 05/01/24
Page 76 of 118
actually happening. Then they. Basically blocked me from the site all SBA
sites and. Or .gov sites say funded. I applied for forgiveness I was
approved. How is that possible That means the funds were supplied and I
never got anything. And I emails saying all of this. And me looking for the
location of the loan. Which in long. Drawn out. Ordeal they then stated
that they. We’re now denying such loan. For technical reasons or
something yet u approved forgiveness I want answers”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
bb.
Melissa Estores
November 9, 2021
“My experience was almost identical to yours. The livelihood of my
business was balancing in the hands of BlueAcorn and Prestamos.
Between BlueAcorn and the automated responses to the “tickets” made
and Prestamos and their phone tag, I wasted valuable time. Time that I
cannot reverse. Time that I should have been able to seek financial help
elsewhere. Shame on you Prestamos for victimizing the community that
you claim to support. Your business has probably been the downfall of
countless other small businesses that fell victim to your service. I hope
you can sleep at night knowing the damage you caused us all. Worst yet,
you were a trusted finance company that didn’t come with a fraud warning
label!!”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
cc.
Jamie Dean Jones
November 4, 2021
“I never received my funds either and I am now getting emails about
forgiveness on a loan I never received and I’m in Arizona what do I do?”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
dd.
Christine Allen
November 4, 2021
“i was approved also for PPP and Prestomos says they issued my check
recieved 6/1/2021 and i still havent gotten the money.Please add me to
list”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
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Case 5:21-cv-04337-JMG
ee.
Document 106-2
David Raymond Butts
Filed 05/01/24
Page 77 of 118
November 4, 2021
“I was also short changed out of my loan which was approved by the
SBA. Signed on May 27th and still no funds”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
ff.
Teresa Fernandez
December 12, 2021
“I never got my loan and it was approved and dispersed 6 months ago I
lost everything even hope I would ever see this money lets see what
happens”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
gg.
Terry
December 10, 2021
“I recieved my funds from my ppp loan then Prestamos removed it via ach
from my account. And when I called them they claim no record of
removing it. My bank gave me the ach tracking number showing it
returned and the sba sent me a letter saying my forgiveness was approved
and I never applied for forgiveness”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
hh.
Dawn Fullerton
December 7, 2021
“They never sent my money but it was approved and also was forgiven by
SBA so they pocketed the whole 20K”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
ii.
Robert Ventullo
December 6, 2021
“I just realized thought I need help and if anyone handles this please
contact me”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
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jj.
Document 106-2
Curtis Samuel
Filed 05/01/24
Page 78 of 118
December 6, 2021
“I need answer to why I can’t get my money blue acorn can not be
trusted”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
kk.
Cory Patterson
December 6, 2021
“They need to come off with my funds I was approved and the sba funded
but iced seen nothing”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
ll.
Frankie Johnson
December 5, 2021
“Applied for and was approved granted an SBA loan number but never
received anything.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
mm.
Erica Page
December 6, 2021
“Approved for the ppp on the loan list but never received”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
nn.
Shelby Edwards
December 2, 2021
“Applied for, was approved, but never received funds. Sba states funds
were disbursed. Received prepaid card with NO FUNDS TODAY AFTER
NEARLY 8 months.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
oo.
Eshontel Davis
December 4, 2021
“Me also is sickening and people should be held accountable. They just
keep saying wait its ridiculous. I’ve even begged to just cancel the loan.
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I’ve asked for the legal department everything and I get nothing but rest
assure.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
pp.
Amy Channel
November 29, 2021
“My name is Amy channell I own a caregiving business, and I filled out
an application for the ppp loan through blue acorn in April and was
approved they sent my money to my bank my bank denied it and sent
them the money back they kept telling me they were going to send my
money to the right account and to be patient they said it would take 3 to 6
days. Then on August 11th I got this email ‘We are writing to let you
know that we have determined that based upon information you provided,
your application does not meet the requirements for the Paycheck
Protection Program.
Unfortunately, we will not be able to fund your PPP loan.’ I have been
waiting since April for these funds because they told me I was approved
and kept telling me to be patient my funds are set aside and will be funded
into my account no matter what but they have alot of applications there
taking care of so to bare with them. I would really like help with what to
do this has set me back alot now.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
qq.
Tyree Kelly
November 29, 2021
“I got approved for my PPP load with Blue Acorn in March. Did all the
paperwork and waited, but emailed them about once a week. After finding
out they ran out of money, I emailed them again to be told I need to Is
verify my identity, mind you this is months after me filing. Did they and
they ended up saying they can’t fund me but had me on the hook the
whole time.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
rr.
Thomas Carrick
November 28, 2021
“I was approved through Blue Accorn on 5-20-2021, SBA approved me I
should say almost 2 weeks went by and did not receive my funds, after
looking over my paperwork that I had signed, meaning the loan papers and
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promisary note, I noticed that one number in the routing number was
wrong, it was a nightmare after that, then I got a message from them
saying that they can not find my loan because I’m not approved, what!?
LoL, I was already approved and waiting on funding, Prestamos is the
bank funding the loan, there’s some serious crooked crap going on with all
this shit!”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
ss.
Tiffany Abbe
November 24, 2021
“Blue Acorn- they approved loan I never received funds, SBA website
shows I was funded and received the money . After 6 months of not
getting any help or received my loan I turned them into the BBB and they
wouldn’t reply to them or me and then all of a sudden my loan was denied
but SBA says I have to pay that money back I can’t even apply for the
forgiveness part because blue Acorn can’t find me in the system anymore.
But I have to pay back the amount or I could face jail time ! Is what I was
told.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
tt.
Cody Brooks
November 23, 2021
“On several sites it shows my company has received a loan through
prestamos cdfi but I have never actually received and funds. I have several
documents from start to current.”
https://topclassactions.com/lawsuit-settlements/money/fees/ppp-loansexploited-by-community-development-lender-prestamos-lining-pocketswith-1-2b/ (visited Dec. 14, 2021).
uu.
“I got approve for my PPP loan in the amount $16,250 By The **
Prestamos CDFI is trying to steal my money. Prestamos CDFI, said my
funds will be sent back to ***, but the *** said no funds are return to them
at all. I need my funds for my business.” (Oct. 12, 2021 post)
Prestamos CDFI LLC | Complaints | Better Business Bureau® Profile
(bbb.org)
vv.
“My small business was approved by the sba in may in their records my
loan status is disbursed yet I havent received a dime and the lender
prestamos refuses to address the issue only referring me back to blueacorn
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whos lying telling me that after review I wasnt approved by the sba so I
just want the money that i have been approved for.” (Sept. 23, 2021 post)
Prestamos CDFI LLC | Complaints | Better Business Bureau® Profile
(bbb.org)
ww.
“Ive previously been approved for a ppp loan with Prestamos CDFI LLC
as my lender. This loan appears online on several sites as being disbursed
from Prestamos CDFI LLC to myself ********************* back in
May 2021 but the issue is that Ive never received these funds. When
reaching out to Prestamos CDFI LLC showing several documents and
screenshots as my valid proof the only response I received was the loan
through their technology partners organization Blueacorn I stated that
nothing on my loan documentation shows anything about a Blueacorn but
does show that Prestamos CDFI LLC is my lender. Ive recently taken out
a separate business loan in the amount of what my ppp loan was to cover
business things so I went ahead and applied for the Forgiveness and
Prestamos accepted it and sent it to the sba. Only way to apply for
forgiveness is by being approved and funds disbursed. I still havent
received any of those funds from Prestamos CDFI LLC and theyre lacking
important communication.” (Sept. 22, 2021 post)
Prestamos CDFI LLC | Complaints | Better Business Bureau® Profile
(bbb.org)
xx.
“I applied for my second PPP loan with XXXX. XXXX farmed this loan
request along with about XXXX other loans to Prestamos XXXX, XXXX.
After hurdles, jumping through hoops, I received SBA approval and was
provided loan documents that were signed and supposedly legally binding.
Those documents were provided by XXXX on XX/XX/XXXX by way of
Prestamos to sign. I was advised on XX/XX/XXXX by my bank XXXX,
that the funds in the amount of {$3200.00} were being returned to
Prestamos XXXX. I knew this was going to happen and attempted to
update my bank information prior to the money being returned but was
denied. Ultimately the money was returned. I immediately attempted to
reach out to both the lender and the third party XXXX. Prestamos
completely wiped their hands of the matter. Despite having contractually
entered into a loan with myself, and then, LYING TO THE
GOVERNMENT in having public record reflect the above, that I had the
loan funded and the funds were dispersed to me. The funds that were
supposed to be designated for me and reissued, as any lender would
clearly do, are MIA. I have documentation on top of documentation of this
whole ordeal to demonstrate that despite currently being legally bound to a
loan that has been accruing interest since XX/XX/XXXX, the lender has
not once reached out to myself or the SBA to correct the information.”
(July 30, 2021 consumer complaint excerpt).
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Search the Consumer Complaint Database | Consumer Financial
Protection Bureau (consumerfinance.gov)
374.
Further, although Prestamos states on its website that it maintains an office in
Santa Fe, New Mexico (see Prestamos CDFI, Prestamos Locations, available at
https://www.prestamosloans.org/locations/ (last visited May 1, 2022), Plaintiffs were advised
that office may not even exist.
375.
Plaintiffs are unaware whether Prestamos has retained or has spent or disbursed
any such funds for any other purpose, although discovery is ongoing. Plaintiffs are pursuing and
anticipate obtaining further information in discovery regarding the status of the SBA-approved
but unfunded PPP loan proceeds at issue that were pledged by Prestamos to secure advances
from the PPPLF on a dollar-for-dollar basis via the PPP loans of Plaintiffs and class members.
Prestamos has also belatedly sought to fund certain class member borrowers following the filing
of plaintiffs’ original complaint on October 1, 2021, although these borrowers have still incurred
lost opportunity and other damages to their businesses due to Prestamos’ failure to timely fund
their loans.
Class Action Allegations
376.
Plaintiffs bring this action individually and on behalf of the following damages
class pursuant to Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure (the “Damages
Class”):
Damages Class: all persons and entities in California, Pennsylvania, Connecticut,
Missouri, Illinois, Washington, Michigan, Nevada, Ohio, Arizona, Colorado, Utah,
Texas, Indiana, Mississippi, Oklahoma and New York (collectively, the “Class Member
States”) who, in 2021, applied for PPP loans with defendant Prestamos as the lender for
whom the SBA provided a SBA loan number, and who executed and submitted their
Loan Documents and provided to Prestamos all required loan documentation, but as to
whom Prestamos both failed to disburse the PPP loan proceeds and reported to the SBA
that the loan proceeds were disbursed.
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377.
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Plaintiffs also bring this action individually and on behalf of the following
declaratory judgment class pursuant to Rules 23(a) and (b)(2) of the Federal Rules of Civil
Procedure (the “Declaratory Judgment Class”):
Declaratory Judgment Class: all persons and entities in the Class Member States who,
in 2021, applied for PPP loans with defendant Prestamos as the lender for whom the SBA
provided a SBA loan number, and who executed and submitted their Loan Documents
and provided to Prestamos all required loan documentation, but as to whom Prestamos
both failed to disburse the PPP loan proceeds and reported to the SBA that the loan
proceeds were disbursed.
378.
Excluded from the Classes are Prestamos, CPLC, any entities in which Prestamos
or CPLC has a controlling interest, Defendants’ agents and employees, any Judge to whom this
action is assigned, and any member of such Judge’s staff and immediate family.
379.
There is a well-defined community of interest among members of the Classes, and
the disposition of their claims in a single action will benefit the parties and the Court.
380.
The proposed Classes meet each applicable requirement of FED. R. CIV. P. 23.
381.
Numerosity: According to discovery produced to date, there are 7,907 total
members of the Classes representing undisbursed PPP loan proceeds totaling $133,562,175.00
for which Prestamos was nevertheless paid by the SBA $19,259,141.00 in total loan processing
fees in only the following 10 of 17 total Class Member States: California, Pennsylvania,
Connecticut, Missouri, Illinois, Washington, Michigan, Nevada, Ohio and Arizona. The Class
Member States include only states in which Plaintiffs reside or were injured by Prestamos’
failure to fund their PPP loans consistent with the Court’s ruling granting in part and denying in
part Prestamos’ motion to dismiss. See Marshall v. Prestamos CDFI, LLC, Civil No. 5:21-cv04337-JMG, 2023 WL 2727541, at *7 (E.D. Pa. March 30, 2023) (“Named Plaintiffs do not have
standing to bring their claims under the laws of states in which they do not reside or were never
injured.”).
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382.
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In particular, the forgoing 10 Class Member State totals include 2,067 class
members in California for total undisbursed PPP loan proceeds of $34,036,403.00 and total loan
fees to Prestamos of $5,031,569.00; 887 in Pennsylvania for total PPP loan proceeds of
$15,371,021.00 and total loan fees of $2,186,908.50; 65 in Connecticut for total PPP loan
proceeds of $992,675.00 and total loan fees of $154,109.00; 286 in Missouri for total PPP loan
proceeds of $4,381,165.00 and total loan fees of $670,893.50; 1,167 in Illinois for total PPP loan
proceeds of $21,625,815.00 and total loan fees of $2,873,502.50; 145 in Washington for total
PPP loan proceeds of $2,008,690.00 and total loan fees of $341,391.00; 1,489 in Michigan for
total PPP loan proceeds of $25,682,015.00 and total loan fees of $3,648,452.50; 565 in Nevada
for total PPP loan proceeds of $9,231,212.00 and total loan fees of $1,369,612.00; 892 in Ohio
for total PPP loan proceeds of $14,941,556.00 and total loan fees of $2,167,283.50; and 344 in
Arizona for total PPP loan proceeds of $5,291,623.00 and total loan fees of $815,419.50.
Accordingly, joinder of all members is impracticable based on the total number of class members
and the total number of class members in each of the respective 10 Class Member States
pursuant to Rule 23(a)(1).
383.
In addition to the foregoing 10 Class Member States, Plaintiffs have requested in
discovery that Prestamos also produce the class member data for the remaining seven Class
Member States of Colorado, Utah, Texas, Indiana, Mississippi, Oklahoma and New York. Five
of those additional Class Member States (Colorado, Utah, Texas, Indiana and Mississippi) were
alleged by the plaintiffs in the original complaint filed in Drevnak, et al v. Prestamos CDFI,
LLC, Case No. 5:23-cv-02777 (ECF No. 1), and that discovery has long been requested and
remains pending. Plaintiffs have also added in this TAC plaintiffs from two additional states
Oklahoma (plaintiff Grichar) and New York (plaintiff Horne). Although Prestamos has yet to
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produce class member data for these seven additional states (and Plaintiffs necessarily reserve all
rights including to move to compel based on the Court’s procedures absent timely production of
that data), Plaintiffs expect that discovery will further show that joinder of class members in
these seven remaining Class Member States is similarly impracticable pursuant to Rule 23(a)(1).
384.
The number and identities of members of the proposed Classes can be determined
only with discovery of Prestamos’ applicable PPP records, including without limitation
Prestamos’ PPPLF Advance Request Forms, Prestamos’ SBA Form 1502 initial and
subsequently-filed monthly reports concerning each applicable Class member PPP loan, and
Prestamos’ bank records.
385.
Prestamos was required to timely and accurately file SBA Form 1502 reports
monthly for each PPP loan. Although Prestamos objected to producing to Plaintiffs in this case
any SBA Form 1502 reports (and Pledge and Advance Request Forms) on alleged grounds that
they were “irrelevant” (ECF No. 78 at 4; “the [SBA] Form 1502 reports … and PARs are
irrelevant to Plaintiffs’ breach of contract claim”) which required Plaintiffs to seek the Court’s
intervention (ECF No. 76), in fact both SBA forms are highly material.
386.
The SBA required lenders to file the Form 1502 reports on a monthly basis to
identify the status of each PPP loan. More specifically, pursuant to § 5 of the SBA Form 1502,
Prestamos was required to identify both the “Amt Disbursed this Period on Total Loan” and,
pursuant to § 6 of that Form, the “Amt Undisbursed on Total Loan: Of the total approved
amount (100% amount), the amount that has not been disbursed by the lender as of the month
ending date. If fully disbursed, leave blank.” (emphasis in original). See
https://www.sba.gov/document/sba-form-1502-sba-form-1502-instructions (last visited April 26,
2024). Similarly, subsection 9 of § 4 of the Form 1502 required Prestamos to also identify the
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status of each PPP loan, including if applicable as it was in the case of the PPP loans of Plaintiffs
and Class members, “Status 9: Fully Undisbursed – loan that has not had any disbursements
made to the borrower. … Report Status Code 9 and indicate the Amount Undisbursed on Total
Loan, until such time that the loan is disbursed.” (emphasis in original). See Id.
387.
In addition, the PPPLF Pledge and Advance Request Form required Prestamos to
“pledg[e], on behalf of the Borrower [i.e., Prestamos], the SBA Pool below as collateral to secure
an advance that the Borrower hereby requests be made pursuant to the PPPLF under the terms
and conditions of the PPPLF Letter of Agreement” and to identify, as to each PPP loan, the “10Digit SBA Loan Number”; the “Small Business Borrower Name”; the “Original Par Amount”;
the “Current Outstanding Principal Balance”; the “Maturity Date”; the “Interest Next Due Date”;
the “Principal Next Due Date”; and other information. See
https://www.frbdiscountwindow.org/generalpages/ppplf_historical_documentation (last visited Jan.
9, 2024).
388.
The PPPLF Letter of Agreement, in turn, states that, “[b]y pledging PPP loans as
collateral for Advances under the Facility … the Borrower [i.e., Prestamos] warrants, represents
and covenants that each such Item pledged as collateral for Advances under the Facility: (a) is a
‘covered loan’ … (b) Complies with all requirements of the PPP, including without limitation
any rules or guidance issued by the SBA implementing the PPP, and any requirements set forth
in any agreement the Borrower is required to execute by the SBA in connection with the PPP
….” See https://www.frbdiscountwindow.org/-/media/Documents/PPPLFLetter-ofAgreement.docx?sc_lang=en&hash=FB7079AEFE245A4DAC32F78E0125725C (last visited April. 9,
2024).
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389.
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The applicable PPP rules include the Form 1502 reports, the Pledge and Advance
Request Forms, and the SBA’s loan funding rule discussed above. See 86 FR 3692, 3710.
Further, additional rules of the SBA govern a lender’s obligation to disburse PPP loans and
timely and accurately report to the SBA regarding each such loan.
390.
For example, the SBA’s rules also state that “[l]enders must electronically upload
SBA Form 1502 information within 20 calendar days after a PPP loan is approved. The lender
must report on SBA Form 1502 whether it has fully disbursed PPP loan proceeds.” 86 FR 3692,
3709 (emphasis added).
391.
Similarly, the SBA Procedural Notice effective February 8, 2021 entitled “Second
Updated Paycheck Protection Program Lender Processing Fee Payment and 1502 Reporting
Process” shortened the lender’s deadline to upload the Form 1502 information to “within 10
calendar days after disbursement of a PPP loan”; stated that “Lenders must submit a complete
and accurate 1502 report”; and stated that “PPP loans must be fully disbursed, and the amount
reported in this field must match the loan approval amount in SBA’s electronic system.” See
Second Updated Paycheck Protection Program Lender Processing Fee Payment and 1502
Reporting Process | U.S. Small Business Administration (sba.gov) at 4-5 (emphasis added).
392.
Further, and also per that February 8, 2021 SBA Procedural Notice, before the
SBA would pay a loan processing fee to the lender, the lender “must make a one-time
confirmation” that “all First Draw Loans and Second Draw Loans included in the report were
fully disbursed to the borrowers on the disbursement dates entered and in the loan amounts
entered in the report, and … all information in the report is true and correct[.]” See Id. at 6
(emphasis added).
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Thus, whether Prestamos disbursed the SBA-approved loan proceeds to the
borrower is a binary question answerable classwide based on Prestamos’ records and the plain
meaning of that term. See https://www.merriam-webster.com (defining disbursement as “the act of
paying out money especially from a fund” and “funds paid out”). Prestamos’ Form 1502 reports
identify the PPP borrowers it reported to the SBA to whom it purportedly “fully disbursed” or
did not disburse the loan proceeds. Prestamos’ bank records (which Plaintiffs have subpoenaed)
including presumably its monthly bank statements, should identify which of those PPP
borrowers it did not truly “fully disburse” the loan proceeds, thereby identifying each Class
member.
394.
Ascertainability: The names and addresses of members of the Classes are
available from defendant Prestamos’ records as discussed in the context of numerosity above,
and thus the Classes are ascertainable. Notice can be provided to the members of the Damages
Class pursuant to Fed. R. Civ. P. 23(c)(2)(B) through direct electronic and other mailing,
publication, or otherwise using techniques and forms of notice similar to those customarily used
in class action litigation. While notice is not required for the Declaratory Judgment Class but is
instead subject to the Court’s discretion under Fed. R. Civ. P. 23(c)(2)(A), because the members
of both Classes include the same unfunded borrowers, notice of certification of the Declaratory
Judgment Class can be provided to its members as part of the notice to them of the certification
of the Damages Class, if and as the Court may direct.
395.
Typicality: Plaintiffs’ claims are based on the same facts and legal theories as
those of the other members of the Classes which Plaintiffs seek to represent pursuant to Rule
23(a)(3). Plaintiffs and the members of the Classes all similarly applied for PPP loans, had their
loans approved by the SBA, submitted to Prestamos all requested loan documentation, and
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Prestamos failed to disburse to them their PPP loan proceeds despite the parties’ loan contracts
and despite falsely reporting to the SBA that it had disbursed those loans. Whatever reasons
Defendants may argue regarding why Prestamos failed to do so, Prestamos’ bottom line failure to
disburse PPP loans to Plaintiffs and all Class members while also falsely reporting to the SBA
that did disburse the loans is shared equally by all Plaintiffs and Class members. Thus, Plaintiffs
and all Class members have also suffered similar injury and been injured by the same core course
of conduct. Plaintiffs and Class members also similarly share an interest in determining the
parties’ respective rights and obligations arising from Prestamos’ failure to disburse the loans
and false reporting to the SBA about them.
396.
Rule 23(a)(3) requires that “the claims or defenses of the representative parties are
typical of the claims or defenses of the class[.]” Here, the central claims at issue -- to wit,
whether Prestamos’ failure to disburse the loans to Plaintiffs breached legal duties Prestamos
owed to the Plaintiffs, and the parties’ respective rights and obligations resulting from
Prestamos’ failure to disburse those loans -- are shared equally by Plaintiffs and the Classes.
Prestamos failed to disburse the SBA-approved loan proceeds to all Plaintiffs and Class
members, falsely reported to the SBA that it disbursed the loans, and all Plaintiffs and Class
members nevertheless remain bound under the same standard form Note and accompanying
Loan Document contracts to pay the loans back to Prestamos, with interest, despite never
receiving the loan proceeds.
397.
In CPF, 2023 WL 5746927, at *7, the Court found based on the factual record
there that “Plaintiffs’ differing circumstances … implicate different defenses” because one
plaintiff had his loan cancelled, one plaintiff was allegedly funded, and the other plaintiffs’ banks
rejected and returned the funds. Here, in contrast, none of Plaintiffs’ loans was cancelled or
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funded and any individualized issues pertaining to Prestamos’ attempt to fund the loans or
returned loan proceeds is irrelevant as a matter of law, because Prestamos falsely reported to the
SBA that it had disbursed the loans to each Plaintiff and class member. By definition under the
narrowed Classes alleged here, all of Plaintiffs’ and the class members’ loans were misreported
by Prestamos to the SBA as actually being disbursed when in fact the loans were not disbursed.
398.
Additionally, the definition of the proposed Classes in this case has also been
narrowed from the class alleged in CPF to include only class members who provided to
Prestamos all required loan documentation. Thus, Plaintiffs will not “be left fending off
divergent factual defenses” regarding any aspect of the PPP paperwork process in this case that
the Court found present in CPF. Id.
399.
Further, in CPF the Court found that the “[t]he central question … is whether
CPF failed to fund Plaintiffs’ loans or timely cancel them.” Id., at *5 (emphasis added). Here, by
contrast, Plaintiffs’ claims are not premised on loan cancellation (timely or otherwise), but
instead Prestamos’ failure to ultimately disburse the loans without regard to whether Prestamos
tried to do so or failed to timely or otherwise cancel them.
400.
Specifically, defenses that Prestamos may claim to raise individualized issues,
such as purported bank rejections of loan proceeds at issue in CPF, would not defeat typicality in
this case even if they exist. Whether any class member’s bank rejected the loan proceeds carries
no legal significance for the typicality analysis here. By the narrowed class definition here,
Prestamos falsely reported to the SBA it had funded Class member loans to get the loan
processing fee when in fact it failed to fund those loans. Further, Prestamos cannot reasonably
evade liability or class certification based on the argument an attempt to fund the loans shields
Prestamos, or represents compliance or substantial compliance with the parties’ Loan Documents
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such that Prestamos did not breach those agreements. In this case, Prestamos represented to the
SBA that it had in fact disbursed the loan proceeds to Plaintiffs and all class members, not just
that it had attempted to do so. Thus, under the PPP, the doctrine of quasi-estoppel and additional
equitable principles, Prestamos is bound by its false representations to the SBA that it had funded
Plaintiffs’ and Class member loans. Consequently, Prestamos should be estopped from now
reversing gears and instead claiming to the contrary, or that any unsuccessful attempt to fund
Plaintiffs’ or Class members’ PPP loans requires individualized inquiry that defeats typicality
under Rule 23(a)(3) or otherwise immunizes Prestamos.
401.
As alleged above, the PPP rules unambiguously required disbursement of SBA-
approved PPP loans and accurate reporting by lenders in the Pledge and Advance Requests and
SBA Form 1502 forms for each loan. Even assuming certain of Plaintiffs’ banks rejected the loan
proceeds and quasi-estoppel and other equitable principles do not render that fact legally
irrelevant, there is no “’danger that the attention to this individual defense might harm the class’”
as the court found in CPF. See CPF, 2023 WL 5746927, at *7 (citation omitted). To the
contrary, if Prestamos is permitted to pick off any Plaintiff or Class member based on any
purported individualized defense -- and in circumstances where it should be precluded from
doing so because, by definition of the Classes here, it lied to the SBA by representing the loans
were funded -- the danger to the Classes here would be far greater, i.e., no chance at any relief,
because there would be no class. As noted above, even if Prestamos attempted to fund a class
member loan, Prestamos’ bank records should show on an undisputed basis to which class
members it made successful and unsuccessful attempts to fund their loan proceeds, such that
their identification will not become the litigation’s focus in any event.
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402.
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Adequacy: Plaintiffs will fairly and adequately represent the interests of the
members of the Classes pursuant to Rule 23(a)(4). Plaintiffs are adequate representatives of the
Classes as their interests align with the interests of the members of the Classes, and Plaintiffs are
represented by counsel experienced in class actions, including financial consumer and other class
action litigation. Plaintiffs and all Class members share the same core claims and have no
interests antagonistic to or in conflict with those of the Classes.
403.
Superiority as to the Damages Class: The class action alleged in this case is
superior to all other available methods for the fair and efficient adjudication of the claims
asserted for the Damages Class because the expense and burden of individual litigation make it
economically infeasible for members of the Damages Class to seek to redress their claims other
than through a class action; if separate actions were brought by individual members of the
Damages Class, that could lead to differing and inconsistent adjudications; and, absent a class
action, Prestamos is unlikely to be held accountable for both its failure to actually fund SBAapproved PPP loans and its repeated lying to the SBA that it did fund those loans to get the fee,
deny Plaintiffs and class members any ability to obtain loan proceeds, loan forgiveness or any
other relief, and leave them nevertheless obligated to repay to Prestamos loan proceeds with
interest for loans they never received.
404.
In CPF, the Court held that superiority was not present “[g]iven the divergent
factual scenarios present in th[at] case.” CPF, 2023 WL 5746927, at *8. Based on the record
there, the Court stated that “[t]he central question in th[at] case … is whether CPF failed to fund
Plaintiffs’ loans or timely cancel them.” Id. at *5 (emphasis added). As explained above, that is
not the case here. Cancellation is not relevant in this case based on the class definition in this
case. Unsuccessful attempts to deliver loan proceeds are not relevant because Prestamos falsely
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represented to the SBA that it had successfully funded the loans and thereby collected loan fees
to which it was not legally entitled, and because of quasi-estoppel and other equitable principles.
And the proposed Damages Class as explicitly defined in this case includes only those who
returned to Prestamos all required loan documentation, again distinguishing this case from CPF.
Thus, the only facts relevant here are whether Prestamos did or did not fund the loans, and
whether it represented to the SBA that it had fully disbursed the loans that it failed to
successfully fund -- all of which raise classwide issues answerable in a single stroke.
405.
Class certification is superior to other available methods to fairly and efficiently
adjudicate this case because the three central questions here are: (1) Prestamos’ failure to fund
Plaintiffs’ and Class members’ loans (regardless of whether Prestamos also failed to timely or
otherwise cancel them), (2) Prestamos’ false representations to the SBA that it had disbursed the
loan proceeds to Plaintiffs’ and Class members, and (3) the parties’ respective rights and
obligations arising therefrom, particularly concerning the ongoing obligation also shared equally
by all Plaintiffs and Class members to repay to Prestamos loans plus interest on loan proceeds
they never received and their inability to even apply for, let alone obtain, loan forgiveness as was
widely accorded to PPP borrowers who were actually funded.
406.
Class certification here is superior and indeed the only practical way for class
members to get relief also because individualized, separate lawsuits are not economically viable.
Plaintiffs’ and other Damages Class members’ SBA-approved PPP loan amounts were for
substantially less than $50,000 each; in Plaintiffs’ specific cases, they ranged between $1,250
(plaintiff Drevnak) to $20,823 (plaintiffs Holland, Ahmadou, Beattie, Lloyd and Johnson) as
alleged above.
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407.
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Even assuming Plaintiffs were to prevail in establishing liability in full and obtain
consequential and other potential damages, the amounts at stake render prosecution of individual
(i.e., non-class action) claims highly impractical and unlikely given the costs of litigation alone.
Presumably for that reason, Plaintiffs are unaware of any other breach of contract or other
individual (i.e., non-class action) lawsuits by any other SBA-approved but unfunded borrower
against Prestamos in any other court in the country, past or present, and despite the indisputable
existence of thousands of other such unfunded borrowers. Even if hundreds or thousands of class
members could practically bring individual actions, that would not be superior to a class action
because of the unnecessary burden it would place on the court system in potentially adjudicating
the same core facts over and over and the risk of potentially inconsistent adjudication.
408.
Accordingly, it is highly likely as a practical matter that only this Court can
provide relief for these unfunded borrowers who nevertheless remain bound to repay Prestamos.
409.
In sum, the expense and burden of individual litigation for the Damages Class
makes it economically unfeasible for members of the Damages Class to seek to redress their
claims other than through a class action; if separate actions were brought by individual members
of the Damages Class, the resulting duplicity of lawsuits could lead to differing and inconsistent
adjudications; and, absent a class action, Prestamos is unlikely to be held accountable for its
failure to fund the applicable SBA-approved PPP loans at issue and its false representations to
the SBA that it funded the loans.
410.
Commonality as to Both Classes and Predominance as to the Damages Class:
Although Rule 23(a)(2) requires that “questions of law or fact” (emphasis added) be common to
the class, here there are common questions of both law and fact; the common questions concern
both the claims and even certain of Prestamos’ core defenses; and those common questions of
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law and fact predominate over any questions which affect individual members of the Damages
Class under Rule 23(b)(3) (Rule 23(b)(2) does not require that common questions predominate
as to the Declaratory Judgment Class).
411.
Common questions of law and fact include, but are not limited to:
a.
whether defendant Prestamos failed to fund SBA-approved PPP loans to
Plaintiffs and other members of the Classes in breach of its obligations to
actually fund such loans;
b.
whether Prestamos obtained fees for PPP loans that it did not make;
c.
whether Prestamos upstreamed to CPLC PPP loan processing fees on the
PPP loans of Plaintiffs and the members of the proposed Classes;
d.
whether Prestamos’ failure to fund SBA-approved PPP loans violated the
Loan Documents it entered into with Plaintiffs and other members of the
Classes;
e.
whether Prestamos falsely reported to the SBA that it had disbursed the
SBA-approved PPP loan proceeds to Plaintiffs and members of the
Classes;
f.
whether the Loan Documents created a binding obligation on Prestamos to
fund the PPP loans of Plaintiffs and the members of the Classes;
g.
whether the Loan Documents are negotiable instruments;
h.
whether the release in the parties’ standard form Note included in the Loan
Documents violates public policy and thus is void as the court held in CPF
regarding the same release (see Greathouse v. Capital Plus Financial
LLC, No. 4:22-CV-0686-P, 2023 WL 5759250, at * (N. D. Tex. Sept. 6,
2023) (“Thus, the exculpatory clause is void.”));
i.
whether Prestamos’ corporate parent, CPLC, was Prestamos’ alter ego for
purposes of Prestamos’ PPP lending;
j.
whether Prestamos’ failure to disburse the PPP loans damaged Plaintiffs
and the members of the Damages Class and, if so, the proper measure of
those damages; and
k.
whether Prestamos should be precluded as a matter of law from seeking or
obtaining any money or other relief, whether payment or repayment of
principal, interest or attorneys’ fees or other costs, from Plaintiffs and the
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members of the Classes in connection with their PPP loans with
Prestamos, including any action that negatively impacts their credit rating.
412.
In sum, common questions predominate here because the claims of Plaintiffs and
the Classes are sufficiently cohesive to warrant adjudication by representation.
413.
Breach of contract cases frequently lend themselves to class treatment. PPP
lenders were also able to use their own form note or make modifications to the SBA form for
PPP lending, but Prestamos instead used the same standard form SBA note uniformly and
classwide which further supports both commonality and predominance.
414.
Further, in this case, the Classes include only those who were approved by the
SBA for their loans, completed and returned the loan documentation in full, still were not funded
by Prestamos, but Prestamos falsely reported to the SBA that the loans were funded.
Accordingly, no individualized defenses regarding “why a loan was not funded” exist in this case
that would defeat a finding of predominance. Even if such individualized defenses existed
regarding attempted funding, Prestamos falsely reported to the SBA that the class member loans
were all funded. Hence, the predominantly common factual and legal issues that will be the focus
of trial concern Prestamos’ failure to disburse the loans to Plaintiffs and Class members who
qualified fully for those loans, Prestamos’ false reporting otherwise, and the parties’ respective
rights as a consequence, not Prestamos’ attempts to fund any loan.
415.
Finally, damages for the Damages Class are capable of measurement on a
classwide basis. Damages in this case are most fundamentally measurable from, and based on,
the SBA-approved PPP loan amounts.
416.
Certification of the Declaratory Judgment Class: Class certification of the
Declaratory Judgment Class is appropriate pursuant to Rules 23(a) and (b)(2). In particular, each
requirement of Rule 23(a) is satisfied as alleged above. Further, declaratory judgment relief is
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appropriate for the Declaratory Judgment Class as a whole pursuant to Rule 23(b)(2) because
Prestamos has acted and refused to act on grounds that apply classwide such that injunctive or
corresponding declaratory relief is appropriate respecting the Declaratory Judgment Class as a
whole, and thus the Court should declare specifically that:
417.
a.
the Loan Documents and PPP rules bound Prestamos to disburse the PPP
loans to Plaintiffs and class members and report accurately to the SBA
regarding the status of those loans;
b.
the release in the parties’ standard form note included in the Loan
Documents violates public policy and thus is void;
c.
Prestamos is estopped or otherwise precluded on grounds of equity from
evading liability or class certification based on any mere attempt to fund
Plaintiffs’ or any class members’ loans, because it falsely reported to the
SBA that it did fund the loans and obtained loan fees based on those false
reports; and
d.
that Prestamos is also precluded as a matter of law from seeking or
obtaining any money or other relief, whether payment or repayment of
principal, interest or attorneys’ fees or other costs, from Plaintiffs and
class members in connection with their PPP loans with Prestamos,
including any action that negatively impacts their credit rating.
Plaintiffs reserve the right to amend the definition of the Classes if discovery or
further investigation reveals that the definition of the Classes should be amended.
COUNT ONE
Breach of Contract
(On Behalf of All Plaintiffs and the Classes)
418.
Plaintiffs incorporate the allegations from all previous paragraphs as if fully set
forth herein.
419.
This Count is brought against both Defendants.
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420.
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The standard form promissory Note and accompanying Loan Documents that
defendant Prestamos and the members of the Classes entered into are binding, enforceable
agreements.
421.
Among other provisions, the Note identifies the specific PPP loan, SBA loan
number and amount of the loan; specifies that the parties to the Note are, respectively, the Class
member borrower and the “Lender” Prestamos; provides that, “[i]n return for the Loan, Borrower
promises to pay to the order of the Lender” the principal amount of the PPP loan plus “interest
on the unpaid principle balance, and all other amounts required by this Note” if not forgiven;
contains other PPP loan repayment terms and events of default and the lender’s rights in the
event of the borrower’s default; contains other provisions, including that “[a]ll individuals and
entities signing this Note are jointly and severally liable”; and, as to each Plaintiff and member
of the Classes, states that, “[b]y signing below, each individual or entity becomes obligated
under this Note as Borrower.”
422.
In addition, the Additional Agreement that accompanies the promissory Note
between the Plaintiff Class member borrowers and defendant Prestamos provides additional
terms and states, at the outset, explicitly as follows:
“In consideration of Prestamos CDFI, LLC, located at 1024 E. Buckeye
RD, Suite 270, Phoenix, AZ 85034, (hereinafter called ‘Lender’) making
the above loan, each of the undersigned, jointly and severally, do hereby
agree as follows ….”
423.
The Loan Document contracts entered into by Prestamos and the members of the
Plaintiff borrower Classes also include a “Notice - No Oral Agreements” document. That
document governs the “Loan by Lender, Prestamos CDFI, LLC to Borrower”; identifies each
Class member borrower and the SBA-approved amount of the loan; states that “THE
WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT
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BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES”; states that the “‘Loan Agreement’ means one or more promises, promissory notes,
agreements, undertakings, security agreements, deeds of trust or other documents or
commitments, or any combination of those actions or documents, pursuant to which a financial
institution loans or delays repayment of or agrees to loan or delay repayment of money, goods, or
another thing of value or to otherwise extend credit or make a financial accommodation”; and is
executed by both Prestamos via its President Martinez, and each Plaintiff and Class member
borrower.
424.
A complete copy of one such standard form Loan Document is attached to this
Amended Complaint as Exhibit A (with only plaintiff Marshall’s Social Security and bank
account number redacted).
425.
Through its agreement to make PPP loans via the Loan Documents, its acceptance
and approval of Plaintiffs’ PPP loan applications, and as the counterparty to the Loan
Documents, defendant Prestamos entered into a binding agreement with each of the Plaintiffs
and the members of the proposed Classes to fund their respective PPP loans.
426.
Plaintiffs and the members of the Classes gave consideration that was fair and
reasonable, and have performed all conditions, covenants, and promises required to be performed
under their Loan Documents with defendant Prestamos.
427.
Plaintiffs and the members of the Classes kept their end of the bargain by
providing all documents and information requested by defendant Prestamos. Defendant
Prestamos failed to complete its end of the bargain by failing to make the PPP loans to Plaintiffs
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and the members of the Classes although it falsely reported to the SBA that it did disburse the
loans.
428.
Further, defendant Prestamos had an implied duty to act in good faith and in
accordance with fair dealing to take all steps necessary to fund the Plaintiffs’ and the other Class
members’ PPP loans pursuant to the Loan Documents.
429.
Defendant Prestamos breached its obligations to fund Plaintiffs’ and Class
members’ PPP loans under the Loan Documents by failing to fund the loans within 10 days of
the SBA’s approval of the loans and assignment of loan numbers, or at any time thereafter.
430.
Defendant Prestamos’ failure to properly fund the loans of Plaintiffs and the
members of the Class also breached its obligations under the Additional Agreement that, “[i]n
consideration of Prestamos … making the above loan, each of the undersigned, jointly and
severally, do hereby agree as follows: …”; the term in the Notice - No Oral Agreements that the
“Loan by Lender, Prestamos CDFI, LLC to Borrower … in the amount of $ … REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES”; and the term in the Notice No Oral Agreements that the “‘Loan Agreement’ means one or more promises, promissory
notes, agreements, undertakings, security agreements, deeds of trust or other documents or
commitments, or any combination of those actions or documents, pursuant to which a financial
institution loans or delays repayment of or agrees to loan or delay repayment of money, goods, or
another thing of value or to otherwise extend credit or make a financial accommodation.”
431.
By failing to fund the SBA-approved loans of Plaintiffs and the members of the
Classes, defendant Prestamos not only breached the terms of the Loan Documents as alleged, but
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also failed to perform the central purpose of the parties’ agreement which was to timely and
properly fund these SBA-approved loans.
432.
Moreover, all PPP loan applications require applicants to certify that they have
not, and will not, receive other PPP loans as alleged more fully above.
433.
As a result, once Plaintiffs and the other members of the Classes applied for PPP
loans and their loan applications were approved by the SBA and assigned PPP loan numbers
pursuant to the Loan Documents, Plaintiffs and the Class members were no longer able to apply
for PPP loans with other PPP lenders as they would not be able to certify that they would not
receive another PPP loan, also as alleged more fully above.
434.
Plaintiffs and the Class members were therefore effectively “stuck” with, and had
to rely exclusively on, defendant Prestamos to actually provide them with the PPP loan funds
that they needed and that the SBA had already approved.
435.
For its part, defendant CPLC controlled and directed Prestamos’ PPP lending
activities and failure to fund the SBA-approved loans of Plaintiffs and the other members of the
Classes; controlled and dominated defendant Prestamos’ Board of Directors and senior
leadership; referred to the companies in their PPP lending activities as one and the same; caused
Prestamos to upstream to CPLC PPP loan processing fees including on PPP loans Prestamos was
obligated to fund but failed to fund; and served as Prestamos’ alter ego in failing to fund the
SBA-approved loans of Plaintiffs and the members of the Class all as alleged more fully above,
and is therefore also liable for breach of contract.
436.
As a result, Defendants harmed Plaintiffs and the members of the Classes in an
amount to be determined at trial, but not less than the amount of the wrongfully withheld PPP
loan proceeds plus all other applicable damages to the full extent permissible by law.
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Prayer for Relief
Plaintiffs, individually and on behalf of the proposed Classes, respectfully request the
following relief:
A.
certifying the Damages Class pursuant to Rules 23(a) and (b)(3) and the
Declaratory Judgment Class pursuant to Rules 23(a) and (b)(2) and naming Plaintiffs as
representatives of the Damages Class and the Declaratory Judgment Class and naming Plaintiffs’
attorneys as counsel for the Classes;
B.
judgment in favor of Plaintiffs and the Classes;
C.
an award including funding of the PPP loans of Plaintiffs and the members of the
Damages Class and of compensatory, consequential and other damages in amounts to be
determined at trial to the maximum extent permissible by law, plus prejudgment interest;
D.
a judgment under 28 U.S.C. § 2201 and Fed. R. Civ. P. 57 determining the
parties’ respective rights and obligations as alleged;
E.
an order awarding all other forms of monetary relief to Plaintiffs and the members
of the Damages Class to the maximum extent permissible by law, including payment of all PPP
loan proceeds owed and due with interest, as well as disgorgement of all fees Prestamos obtained
in connection therewith to the maximum extent permissible by law;
F.
an order of equitable relief, in the alternative and to the extent that the breach of
contract claim fails to adequately award Plaintiffs and the Damages Class members their
damages for Defendants’ violations, including injunctive relief directing Defendants to fund their
SBA-approved loans in full with interest, or restitution in the amount of the wrongfully withheld
PPP loan proceeds plus interest;
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G.
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an award of punitive damages based on Prestamos’ intentional, wanton and
malicious conduct, or its reckless disregard of Plaintiffs’ and the Damages Class members’
rights, in amounts to be determined at trial to the maximum extent permissible by law;
H.
an order awarding Plaintiffs and the Classes their reasonable attorneys’ fees and
expenses and costs of this lawsuit, including but not limited to expert fees and costs, to the
maximum extent permissible by law;
I.
an order awarding Plaintiffs and the Classes their reasonable attorneys’ fees and
expenses and costs of this lawsuit in connection with any applicable PPP loans Prestamos funded
after the October 1, 2021 date that this litigation was filed that are fairly and reasonably
attributable to Plaintiffs’ filing and maintaining this litigation to the maximum extent permissible
by law; and
J.
such other relief as the Court may deem just and proper.
DEMAND FOR JURY TRIAL
Pursuant to Federal Rule of Civil Procedure 38(b), Plaintiffs demand a trial by jury of
any and all issues in this action so triable as of right.
Dated: May 1, 2024
Respectfully submitted,
BAILEY & GLASSER LLP
By: /s/ Lawrence J. Lederer
Lawrence J. Lederer (Pa. ID 50445)
Bart D. Cohen (Pa. ID 57606)
1622 Locust Street
Philadelphia, PA 19103
T.: 215-274-9420
F.: 202-463-2103
llederer@baileyglasser.com
bcohen@baileyglasser.com
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Michael L. Murphy (admitted pro hac vice)
1055 Thomas Jefferson Street NW, Suite 540
Washington, DC 20007
T.: 202.463-2101
F.: 202.463-2103
mmurphy@baileyglasser.com
- and NOLAN HELLER KAUFFMAN LLP
Justin A. Heller (admitted pro hac vice)
Matthew M. Zapala (admitted pro hac vice)
80 State Street, 11th Floor
Albany, NY 12207
T.: 518.449.3300
F.: 518.432.3123
jheller@nhkllp.com
mzapala@nhkllp.com
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EXHIBIT A
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U.S. Small Business Administration
NOTE
SBA Loan #
8282208801
SBA Loan Name
Paycheck Protection Program
Date
4/29/2021
Loan Amount
$ 7915
Interest Rate
Fixed at 1%
Borrower
Alicia Marshall
Operating Company
Alicia Marshall
Lender
1.
Prestamos CDFI, LLC
PROMISE TO PAY:
In return for the Loan, Borrower promises to pay to the order of Lender the amount of
$ 7915
_______________________________________________________________________________________
Dollars,
interest on the unpaid principal balance, and all other amounts required by this Note.
2.
DEFINITIONS:
“Collateral” means any property taken as security for payment of this Note or any guarantee of this Note.
“ Guarantor” means each person or entity that signs a guarantee of payment of this Note.
“Loan” means the loan evidenced by this Note.
“Loan Documents” means the documents related to this loan signed by Borrower, any Guarantor, or anyone who
pledges collateral.
“SBA” means the Small Business Administration, an Agency of the United States of America.
SBA Form 147 (06/03/02) Version 4 1
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PAYMENT TERMS:
Borrower must make all payments at the place Lender designates. The payment terms for this Note are:
Initial Deferment Period: No payments are due on this loan beginning on the date of first disbursement of this loan until
the loan forgiveness payment is remitted to the Lender by the SBA. Interest will continue to accrue during the deferment
period.
Loan Forgiveness:
First Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered
period following loan disbursement:
oEmployee and compensation levels are maintained
oThe loan proceeds are spent on payroll costs and other eligible expenses; and
oAt least 60 percent of the proceeds are spent on payroll costs
Second Draw PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8 to 24 week covered
period following loan disbursement:
oEmployee and compensation levels are maintained in the same manner as required for the First Draw PPP loan
oThe loan proceeds are spent on payroll costs and other eligible expenses; and
oAt least 60 percent of the proceeds are spent on payroll costs
The amount of loan forgiveness shall be calculated (and may be reduced) in accordance with the requirements of the
Paycheck Protection Program, including the provisions of Section 1106 of the Coronavirus Aid, Relief, and Economic
Security Act (CARES Act). Not more than 40% of the amount forgiven can be attributable to non-payroll costs.
Maturity: This Note will mature five years from date of first disbursement of this loan.
Repayment Terms: The interest rate on this Note is one percent per year. The interest rate is fixed and will not be
changed during the life of the loan.
For any amounts that remain owing on this Note after the SBA remits the forgiveness payment, Borrower must pay
principal and interest payments, in such amount as is required to fully amortize the unpaid balance of this Note over the
remaining term, beginning one (1) month following the SBA's forgiveness payment. If a forgiveness application is not
made within ten (10) months of the last day of the covered period, Borrower must pay principal and interest payments in
such amount as is required to fully amortize the unpaid balance of this Note over the remaining term. Payments must be
made on the 1st calendar day in the months they are due.
Lender will apply each installment payment first to pay interest accrued to the day Lender received the payment, then to
bring principal current, and will apply any remaining balance to reduce principal.
Loan Prepayment: Notwithstanding any provision in this Note to the contrary:
Borrower may prepay this Note at any time without penalty. Borrower may prepay 20 percent or less of the unpaid
principal balance at any time without notice. If Borrower prepays more than 20 percent and the Loan has been sold on the
secondary market, Borrower must: a. Give Lender written notice; b. Pay all accrued interest; and c. If the prepayment is
received less than 21 days from the date Lender received the notice, pay an amount equal to 21 days interest from the date
lender received the notice, less any interest accrued during the 21 days and paid under b. of this paragraph. If Borrower
does not prepay within 30 days from the date Lender received the notice, Borrower must give Lender a new notice.
Non-Recourse: Lender and SBA shall have no recourse against any individual shareholder, member or partner of
Borrower for non-payment of the loan, except to the extent that such shareholder, member or partner uses the loan
proceeds for an unauthorized purpose.
SBA Form 147 (06/03/02) Version 4 1
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DEFAULT:
Borrower is in default under this Note if Borrower does not make a payment when due under this Note, or if Borrower
or Operating Company:
5.
A.
Fails to do anything required by this Note and other Loan Documents;
B.
Defaults on any other loan with Lender;
C.
Does not preserve, or account to Lender’s satisfaction for, any of the Collateral or its proceeds;
D.
Does not disclose, or anyone acting on their behalf does not disclose, any material fact to Lender or SBA;
E.
Makes, or anyone acting on their behalf makes, a materially false or misleading representation to Lender or SBA;
F.
Defaults on any loan or agreement with another creditor, if Lender believes the default may materially affect
Borrower’s ability to pay this Note;
G.
Fails to pay any taxes when due;
H.
Becomes the subject of a proceeding under any bankruptcy or insolvency law;
I.
Has a receiver or liquidator appointed for any part of their business or property;
J.
Makes an assignment for the benefit of creditors;
K.
Has any adverse change in financial condition or business operation that Lender believes may materially affect
Borrower’s ability to pay this Note;
L.
Reorganizes, merges, consolidates, or otherwise changes ownership or business structure without Lender’s prior
written consent; or
M.
Becomes the subject of a civil or criminal action that Lender believes may materially affect Borrower’s ability to
pay this Note.
LENDER’S RIGHTS IF THERE IS A DEFAULT:
Without notice or demand and without giving up any of its rights, Lender may:
6.
A.
Require immediate payment of all amounts owing under this Note;
B.
Collect all amounts owing from any Borrower or Guarantor;
C.
File suit and obtain judgment;
D.
Take possession of any Collateral; or
E.
Sell, lease, or otherwise dispose of, any Collateral at public or private sale, with or without advertisement.
LENDER’S GENERAL POWERS:
Without notice and without Borrower’s consent, Lender may:
A.
Bid on or buy the Collateral at its sale or the sale of another lienholder, at any price it chooses;
B.
Incur expenses to collect amounts due under this Note, enforce the terms of this Note or any other Loan
Document, and preserve or dispose of the Collateral. Among other things, the expenses may include payments
for property taxes, prior liens, insurance, appraisals, environmental remediation costs, and reasonable attorney’s
fees and costs. If Lender incurs such expenses, it may demand immediate repayment from Borrower or add the
expenses to the principal balance;
C.
Release anyone obligated to pay this Note;
D.
Compromise, release, renew, extend or substitute any of the Collateral; and
E.
Take any action necessary to protect the Collateral or collect amounts owing on this Note.
SBA Form 147 (06/03/02) Version 4 1
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7.
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WHEN FEDERAL LAW APPLIES:
When SBA is the holder, this Note will be interpreted and enforced under federal law, including SBA regulations.
Lender or SBA may use state or local procedures for filing papers, recording documents, giving notice, foreclosing
liens, and other purposes. By using such procedures, SBA does not waive any federal immunity from state or local
control, penalty, tax, or liability. As to this Note, Borrower may not claim or assert against SBA any local or state law
to deny any obligation, defeat any claim of SBA, or preempt federal law.
8.
SUCCESSORS AND ASSIGNS:
Under this Note, Borrower and Operating Company include the successors of each, and Lender includes its successors
and assigns.
9.
GENERAL PROVISIONS:
A.
All individuals and entities signing this Note are jointly and severally liable.
B.
Borrower waives all suretyship defenses.
C.
Borrower must sign all documents necessary at any time to comply with the Loan Documents and to enable
Lender to acquire, perfect, or maintain Lender’s liens on Collateral.
D.
Lender may exercise any of its rights separately or together, as many times and in any order it chooses. Lender
may delay or forgo enforcing any of its rights without giving up any of them.
E.
Borrower may not use an oral statement of Lender or SBA to contradict or alter the written terms of this Note.
F.
If any part of this Note is unenforceable, all other parts remain in effect.
G.
To the extent allowed by law, Borrower waives all demands and notices in connection with this Note, including
presentment, demand, protest, and notice of dishonor. Borrower also waives any defenses based upon any claim
that Lender did not obtain any guarantee; did not obtain, perfect, or maintain a lien upon Collateral; impaired
Collateral; or did not obtain the fair market value of Collateral at a sale.
SBA Form 147 (06/03/02) Version 4 1
Page 4/6
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 110 of 118
10. STATE-SPECIFIC PROVISIONS:
None
Unless otherwise prohibited by law, the following additional provisions will apply:
Release of Lender. In consideration of the agreement of the Lender to provide this Note, and other good and
valuable consideration, which consideration is agreed by Borrower to be good and sufficient, Borrower RELEASES,
ACQUITS AND FOREVER DISCHARGES the Lender, its directors, officers, shareholders, agents, contractors,
employees, affiliates, attorneys, successors and assigns from any and all claims, demands, liens, damages, actions
or suits, of whatsoever nature or character, whether statutory (including without limitation usury and deceptive trade
practices claims), in contract or in tort, known or unknown, which have accrued or may accrue to Borrower or any
creditor or affiliate of Borrower on account of any injuries, damages or losses or otherwise arising out of or in any
way connected to (i) any extension of credit by the Lender to Borrower on or prior to the date hereof, or (ii) any
matter or thing done, omitted or suffered to be done by the Lender, its directors, officers, shareholders, agents,
employees, affiliates, attorneys, predecessors or assignors on or prior to the date hereof.
Notwithstanding anything else contained herein, this Note is not secured and there are no guarantors.
SBA Form 147 (06/03/02) Version 4 1
Page 5/6
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 111 of 118
11. BORROWER’S NAME(S) AND SIGNATURE(S):
By signing below, each individual or entity becomes obligated under this Note as Borrower.
BORROWER:
Alicia Marshall
By __________
SBA Form 147 (06/03/02) Version 4 1
______________
Date ____________________
Page 6/6
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 112 of 118
ADDITIONAL AND CORRECTION DOCUMENTS AGREEMENT
(ERRORS AND OMISSIONS AGREEMENT)
RE:
Loan by Lender, Prestamos CDFI, LLC to
Sole Proprietorship (Unregistered)
Alicia Marshall
, a(n)
, in the amount of $ 7915
.
In consideration of Prestamos CDFI, LLC, located at 1024 E Buckeye RD, Suite 270, Phoenix AZ 85034, (hereinafter called “Lender”) making the above loan, each of the undersigned, jointly and severally, do hereby agree as follows:
1.
In the event the promissory note or any other document or other writing evidencing, securing or pertaining
to the above loan is misplaced or lost or incorrectly reflects the true and correct terms, conditions or provisions of the loan
in the opinion of Lender, each of the undersigned shall execute, acknowledge, initial and deliver to Lender all documents
and other writings that Lender requests which Lender deems necessary to replace or correct any misplaced, lost or incorrect
document or other writing; and
2.
In the event Lender deems it necessary that any additional documents or other writings be executed by any
of the undersigned in connection with or pertaining to the above loan which have not been requested to be executed by the
undersigned on or before the date hereof (or which were requested but not executed for any reason whatsoever), each of
the undersigned shall execute, acknowledge, initial and deliver to Lender all such additional documents or other writings
that Lender may reasonably request in connection with such loan; and
3.
Each of the undersigned further agrees to execute, acknowledge, initial and deliver to Lender all such
documents and writings and pay such additional sums requested by Lender within ten (10) days after Lender requests
same. Any request by Lender shall be deemed given and received on the earlier of (i) the date such request is actually
received by one of the undersigned or (ii) three (3) days after such request is mailed, postage prepaid and addressed to
any of the undersigned at the last known address of the undersigned in accordance with the records of Lender, whichever
date occurs first; and
4.
If any of the undersigned refuses or fails within such ten (10) day period to (i) execute, acknowledge, initial
and deliver any such document or other writing requested by Lender, or (ii) pay any such fees, expenses, costs or interest,
each of the undersigned, jointly and severally, agree to pay to Lender all losses, damages and expenses paid or incurred
by Lender in any manner emanating therefrom or connected therewith, including (but not limited to) reasonable attorney’s
fees, and each of the undersigned further agree that any such failure or refusal shall constitute a default and an Event of
Default under the note and all other writings evidencing, securing or pertaining to said loan; and
5.
Each of the undersigned hereby acknowledges that Lender is relying upon this agreement in making the
above loan and that Lender would not make such loan unless each of the undersigned execute and deliver this agreement;
and each of the undersigned further agree that this agreement (i) shall inure to the benefit of Lender and each subsequent
holder of the note evidencing such loan, and (ii) shall be binding upon each of the undersigned and upon each of the heirs,
personal representatives, successors and assigns of each of the undersigned.
EXECUTED 4/29/2021
BORROWER:
Alicia Marshall
A(n)
,
Sole Proprietorship (Unregistered)
By:
Name: Alicia Marshall
Title: Owner
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 113 of 118
BUSINESS PURPOSE STATEMENT
(SBA Paycheck Protection Program)
I, Alicia Marshall
, Owner
of
Alicia Marshall
,
Sole Proprietorship (Unregistered), state as follows:
a(n)
1.
To induce Prestamos CDFI, LLC, 1024 E Buckeye Rd, Suite 270, Phoenix, AZ 85034, to
extend credit to Alicia Marshall
, a(n)
I represent that the proceeds of the loan in the amount of $ 7915
Sole Proprietorship (Unregistered)
,
will
be
used
only for the following purpose(s):
Business related purposes as authorized by the U.S. Small Business Administration Paycheck
Protection Program and as specified in the loan application.
2.
I understand that the above-stated purpose is for business or commercial purposes only
and that you are relying upon these representations in not making Truth-in-Lending disclosures pursuant
to 15 U.S.C. Section 1601, in connection with this loan.
EXECUTED 4/29/2021
(A
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 114 of 118
NOTICE - NO ORAL AGREEMENTS
RE:
Loan by Lender, Prestamos CDFI, LLC to Borrower, Alicia Marshall
a(n)
, in the amount of $ 7915
Sole Proprietorship (Unregistered)
,
.
THE WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
“Loan Agreement” means one or more promises, promissory notes, agreements, undertakings,
security agreements, deeds of trust or other documents or commitments, or any combination of those
actions or documents, pursuant to which a financial institution loans or delays repayment of or agrees to
loan or delay repayment of money, goods, or another thing of value or to otherwise extend credit or make
a financial accommodation.
EXECUTED 4/29/2021
LENDER:
PRESTAMOS CDFI, LLC
By:
Name:
Jose Martinez
Title:
President
BORROWER:
Alicia Marshall
Sole Proprietorship (Unregistered)
A(n)
By:
Name:
Alicia Marshall
Title:
Owner
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
!# "
Page 115 of 118
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Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 116 of 118
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Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 117 of 118
Case 5:21-cv-04337-JMG
Document 106-2
Filed 05/01/24
Page 118 of 118
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Evolve Bank & Trust
Alicia Marshall
084106768File and source
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