Court filing

Exhibit 16 Swain Report — Marshall v. Prestamos CDFI, LLC (Dkt. 142-21, E.D. Pa. No. 5:21-cv-04337)

Filed July 12, 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	2024-07-12

U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 142-21 · 2024-07-12 · Docket on CourtListener

Full text

Ex. 16 – Report of Kenneth Swain, dated July 12, 2024

Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 1 of 94

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,
Plaintiffs,
v.
PRESTAMOS CDFI, LLC,
Defendant.
Civil Action No. 5:21-cv-04337-JMG
EXPERT REPORT OF KENNETH SWAIN
July 12, 2024
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TABLE OF CONTENTS
I.
Introduction .............................................................................................................................1
A.
Qualifications .................................................................................................................1
B.
Case Background ...........................................................................................................2
C.
Assignment ....................................................................................................................5
D.
Summary of Opinions ....................................................................................................5
II.
Overview of the PPP Lending Process ...................................................................................7
A.
Key PPP Players: SBA, Borrowers, and Lenders ..........................................................9
B.
PPP Loan Fraud ...........................................................................................................12
C.
Disbursements of PPP Loan Funds ..............................................................................14
III.
There Was a Wide Variety of Reasons Why The Putative Class Members
Did Not Receive PPP Loan Funds ........................................................................................16
A.
Overview of Reasons for Failure to Receive PPP Loan Funds ...................................17
1. Scenario 1.................................................................................................. 17
2. Scenario 2.................................................................................................. 18
3. Scenario 3.................................................................................................. 18
B.
Analysis of ACH Return Codes Associated With Prestamos’s PPP
Loan Disbursements .....................................................................................................22
1. Available Data .......................................................................................... 23
2. Analysis of ACH Return Codes in the Evolve Return Data ..................... 26
C.
Selected Case Studies of the Named Plaintiffs Who Purportedly Did
Not Receive PPP Loan Proceeds .................................................................................31
IV.
There Was a Wide Variety of Reasons Why The Putative Class Members’
PPP Loans May Not Have Been Fully Forgiven ..................................................................47
A.
Overview of PPP Loan Forgiveness ............................................................................48
B.
PPP Loan Forgiveness Requirements ..........................................................................49
C.
The Final Portion of the Loan Amount to be Forgiven Would have
Varied Widely ..............................................................................................................54
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I.
INTRODUCTION
A.
Qualifications
1.
My name is Kenneth Swain. I have over 35 years of experience in commercial
banking, with a focus on the lending programs of the Small Business Administration (the
“SBA”).
2.
I started my career in 1972 at the Wall Street bank Irving Trust Company as a
commercial banker. Since then, I have worked in commercial banking at various financial
institutions, including Mercantile Bank and Trust, PNC, SunTrust, Sandy Spring Bank, and now
Freedom Bank of Virginia. The various executive positions I have held include Senior Lending
Officer-Approver of loans, Chief Credit Officer responsible for all loans, middle manager, and
relationship manager implementing loan programs, cash management programs, and certain
programs managed by the U.S. Treasury.
3.
I have spent much of my career in and around the SBA and its lending programs.
For example, at Allied Capital from 1978 to 1984, I spent six years managing Allied Lending, a
non-bank lender licensed and supervised only by the SBA. While working at Allied Capital, I
became an expert in SBA rules and regulations. From 1986 to 1990, I was President of
Washington Ventures, a Small Business Investment Company (a venture capital company owned
by Washington Bancorp and licensed and regulated only by the SBA, specialized in the
management of private debt and equity investments in small businesses). In that capacity, I was
responsible for knowing and abiding by all the applicable SBA rules and regulations. From 2016
to 2023, as a Senior Vice President and a Commercial Relationship Manager at Sandy Spring
Bank, I was part of the team to facilitate the SBA’s Paycheck Protection Program (“PPP”) for
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commercial customers in 2020 and 2021. As I explain in more detail below, the PPP was a
program administered by the SBA to provide businesses with low-interest loans designed to help
keep their workforce employed during COVID-19. I, along with my team, implemented the first
and second tranches of the program. My team met several times a week, trying to keep up with
all the changes that the U.S. Treasury was making to the program. Sandy Spring Bank made
$2.6 billion in PPP loans to 6,000 clients. I personally processed approximately 330 loan
applications, about 300 of which were approved and funded. I also processed forgiveness
applications for these loans. In addition, I have been a member of the Business Finance Group’s
loan committee from 2013 to 2023. The Business Finance Group is licensed by the SBA as a
lender for its 504 loan program (which provides long-term financing to commercial businesses
for major fixed assets, such as equipment or real estate).
4.
I have a B.A. degree from the University of Pennsylvania and an M.B.A. from
George Washington University.
5.
A copy of my complete curriculum vitae is attached as Appendix A.
B.
Case Background
6.
Established in 2000, Prestamos CDFI, LLC (“Prestamos”) is a subsidiary of
Chicanos Por La Causa, Inc. (“CPLC”) and is a certified Community Development Financial
Institution (“CDFI”).1 A CDFI is a private sector, financial intermediary with community
development as its primary mission.2 Prestamos makes loans to a targeted population of
Hispanics in Arizona and Nevada who face barriers to securing credit from traditional lending
1
“About Us,” Prestamos CDFI, available at https://prestamoscdfi.org/about-prestamos/.
2
“About Us,” Prestamos CDFI, available at https://prestamoscdfi.org/about-prestamos/.
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institutions for various reasons (including their smaller loan requests, greater need for flexible
underwriting, or need for help with meeting underwriting standards).3 During COVID-19,
Prestamos played a role nationally in supporting small businesses by providing close to 500,000
PPP loans to underserved communities in crisis.4
7.
Prestamos contracted with Blue Acorn PPP, LLC (including its affiliate such as
FinCap, Inc.) (collectively “Blueacorn”) in 2021 to help identify borrowers to whom Prestamos
could make PPP loans and assist in the PPP paperwork process.5 Blueacorn is a lender service
provider (“LSP”), an agent that carries out lender functions in originating, processing,
disbursing, servicing, or liquidating SBA loans.6 It was launched in 2020 and assisted hundreds
of thousands of borrowers in applying for and securing PPP loans through the end of the PPP in
May 2021.7
8.
In 2021, Prestamos approved 494,415 PPP loans, totaling nearly $7.7 billion.8
Among all PPP lenders in 2021, Prestamos ranked the first in terms of the number of PPP loans

3
“Prestamos CDFI: Phoenix, Arizona,” CDFI Coalition, available at https://cdfi.org/wp-
content/uploads/2019/02/Prestamos-CDFI.pdf.
4
“Building on Success and Trust,” Prestamos CDFI, available at https://prestamoscdfi.org/ppp/.
5
Third Amended Class Action Complaint and Demand for Jury Trial, 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, Plaintiffs, v. Prestamos CDFI, LLC and Chicanos
Por La Causa, Inc., Defendants., Civil Action No. 5:21-cv-04337-JMG, May 2, 2024 (“Third Amended
Complaint”), ¶ 90.
6
“Part 103 - Standards for Conducting Business with SBA,” Code of Federal Regulations, available at
https://www.ecfr.gov/current/title-13/chapter-I/part-103 (“Lender Service Provider means an Agent who carries
out lender functions in originating, disbursing, servicing, or liquidating a specific SBA business loan or loan
portfolio for compensation from the lender.”)
7
“What is Blueacorn?,” Blueacorn, available at https://blueacorn.co/faq/; “About Blueacorn,” Blueacorn,
available at https://blueacorn.co/about.
8
“Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021,” U.S. Small Business
Administration (SBA), available at https://www.sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf, p. 7.
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approved and the third (behind JPMorgan Chase Bank and Bank of America) in terms of the total
dollar amount of PPP loans.9
9.
The Named Plaintiffs bring this action individually and on behalf of two putative
classes.10 Throughout the remainder of this report, I refer to the two putative classes collectively
as the “Putative Class” and the purported members of the two putative classes as the “Putative
Class Members.” Specifically, the Named Plaintiffs allege that, although the SBA approved the
Putative Class Members’ PPP loans and assigned SBA loan numbers, and the Putative Class
Members completed and timely returned to Prestamos all requisite loan documentation,
Prestamos never funded their PPP loans.11 The Named Plaintiffs also allege that Prestamos
misreported the Putative Class Members’ PPP loans to the SBA as being funded so that
Prestamos could obtain the loan fees.12

9
“Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021,” U.S. Small Business
Administration (SBA), available at https://www.sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf, p. 7.
10 I understand that the “Damages Class” is defined as: “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.” (Third Amended Complaint, ¶ 376.) I understand that the “Declaratory Judgment
Class” is defined as: “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.” (Third Amended Complaint, ¶ 377.) I further understand that both definitions exclude: “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.”
(Third Amended Complaint, ¶ 378.)
11 Third Amended Complaint, ¶ 73.
12 Third Amended Complaint, ¶ 73.
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C.
Assignment
10.
Ballard Spahr LLP, counsel for Prestamos (“Counsel”), retained me to provide
expert testimony in this matter based on my knowledge of and experience in the lending
programs of the SBA, including the PPP. Specifically, Counsel asked me to: (a) provide an
overview of the PPP lending program, including the process for disbursements of loan funds
using the Automated Clearing House (“ACH”) payments network, as well as the loan
forgiveness process; (b) assess the reasons why the Putative Class Members did not receive PPP
loan funds; and (c) assess the reasons why the Putative Class Members’ PPP loans may not have
been fully forgiven.
11.
I am being compensated at an hourly rate of $925 for my time spent on this
matter. Employees of Analysis Group, Inc. working under my direction and supervision have
assisted me in this assignment. Neither my compensation nor that of the Analysis Group staff
supporting me is contingent upon my findings or the outcome of this litigation.
12.
A list of materials I considered in forming my opinions is attached as Appendix
B. I have also drawn on my professional experience. My work on this matter is ongoing, and I
therefore reserve the right to update, refine, and/or revise my opinions, or form additional
opinions, including in response to Plaintiffs’ experts and any additional information I may
receive.
D.
Summary of Opinions
13.
Based on my experience with SBA lending programs, including facilitating the
PPP for borrowers in 2020 and 2021, and my review of the documentary and data evidence made
available to me to date, I have formed the following opinions:
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14.
To the extent the Putative Class Members did not receive PPP loan funds, there
was a variety of reasons. For some, a borrower’s loan application may have been withdrawn
prior to the initiation of disbursement of loan proceeds. For others, a disbursement was initiated
and funds successfully reached the borrower’s bank via an ACH transfer, but the bank may have
withheld the funds without releasing to the borrower’s account for various reasons, including
suspicion of fraud. For yet another category of Putative Class Members, the ACH fund transfer
initiated by Prestamos was returned, accompanied by an ACH return code. This return, in turn,
led to follow-up with the borrower by Blueacorn, Prestamos, and/or the borrower’s bank. While
this follow-up process resolved the issues for some borrowers, it resulted in non-funding for
others due to various reasons, including suspected fraud.
15.
For those failed disbursements accompanied with an ACH return code, an
analysis of the code alone is insufficient to assess why each borrower did not receive the PPP
loan funds. This is because one code can be used to denote multiple (sometimes unrelated)
reasons for a return. Moreover, the return code itself does not convey information on what
follow-up with the borrower was conducted by various parties. Therefore, understanding why
each Putative Class Member did not receive PPP loan proceeds requires an individualized
analysis of each borrower’s situation and the timeline of actions (or inactions) of different
parties.
16.
The Putative Class Members’ PPP loans may not have been fully forgiven for a
variety of reasons. The PPP loan forgiveness application was onerous, requiring extensive
documentary support, and rules for determining the eligible loan forgiveness amount were
complex. Inaccuracies in the original loan application could also impact loan forgiveness
eligibility. Thus, to determine whether each Putative Class Member’s PPP loan could have been
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forgiven (and in what amount) would require an individualized analysis of each borrower’s loan
forgiveness application that accounts for various factors, such as the covered period, payroll cost,
non-payroll cost, employee wage level, and employee headcount.
II.
OVERVIEW OF THE PPP LENDING PROCESS
17.
After the onset of COVID-19, the U.S. Congress passed the Coronavirus Aid,
Relief, and Economic Security (“CARES”) Act on March 27, 2020.13 The CARES Act included
the PPP, which launched on April 3, 2020 and ended on May 31, 2021.14 Administered by the
SBA, the PPP provided businesses with potentially forgivable, low-interest loans to help keep
their workforce employed during COVID-19.15 PPP loans were intended to cover payroll and
benefits, mortgage interest, rent, utilities, and other costs to promote job retention and ensure
economic stability amid the economic turmoil caused by COVID-19.16
18.
I understand that the Named Plaintiffs in this matter all purport to be sole
proprietors.17 Businesses eligible for a PPP loan, however, extended beyond sole proprietors.
Examples of eligible businesses include: (a) sole proprietors, independent contractors, and the
13
“Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3692.
14
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 5.
15
“Paycheck Protection Program,” U.S. Small Business Administration (SBA), available at
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-protection-program.
16
“Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3704.
17
Third Amended Complaint, ¶¶ 15-35.
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self-employed; (b) any small business concerns that met the SBA’s size standards;18 (c) any
businesses, 501(c)(3) nonprofit organizations, 501(c)(19) veterans organizations, or tribal
business concerns with 500 or fewer employees or, for those with more than 500 employees,
meeting the SBA’s industry-specific size standards; and (d) any businesses in the
accommodations and food services sectors that had more than one physical location and
employed less than 500 people per physical location.19 The SBA approved over 11.8 million
PPP loans, totaling nearly $800 billion between April 3, 2020 and May 31, 2021.20 In 2020, the
total approved PPP loan count was over 5.2 million with an average loan size of $101,000.21 The
total approved PPP loan count in 2021 was over 6.6 million with an average loan size of
$42,000.22

18 The SBA’s size standards for small businesses included: (1) various industry-specific revenue thresholds, or (2)
alternative size standards based on metrics such as maximum tangible net worth (less than $15 million) or
average net income after federal taxes (less than $5 million). See “Business Loan Program Temporary
Changes; Paycheck Protection Program as Amended by Economic Aid Act,” Federal Register, January 14,
2021, available at https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-
temporary-changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3695.
19 “Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 8.
20 Levin, Adam G., Anthony A. Cilluffo, and Bruce R. Lindsay, “SBA as a Vehicle for Crisis Relief: Lessons
from the COVID-19 Pandemic,” Congressional Research Service, September 14, 2023, available at
https://crsreports.congress.gov/product/pdf/R/R47694, p. 3.
21 In 2020, a borrower could apply for a PPP loan during the period from April 3, 2020 to August 8, 2020. See
“Paycheck Protection Program (PPP) Information Sheet: Borrowers,” available at
https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf, p. 1;
“Paycheck Protection Program (PPP) Report: Approvals through 08/08/2020,” U.S. Small Business
Administration (SBA), available at https://www.sba.gov/sites/default/files/2020-08/PPP_Report%20-%202020-
08-10-508.pdf, pp. 2-6.
22 In 2021, a borrower could apply for a PPP loan during the period from January 19, 2021 to May 31, 2021. See
“SBA Re-Opening Paycheck Protection Program to Small Lenders on Friday, January 15 and All Lenders on
Tuesday, January 19,” U.S. Small Business Administration, January 13, 2021, available at
https://www.sba.gov/article/2021/jan/13/sba-re-opening-paycheck-protection-program-small-lenders-friday-
january-15-all-lenders-tuesday; “Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021,”
U.S. Small Business Administration (SBA), available at https://www.sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf, pp. 2-6.
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A.
Key PPP Players: SBA, Borrowers, and Lenders
19.
The SBA was responsible for administering the program, setting the rules,
overseeing its implementation, and ensuring compliance with the guidelines.23 The U.S.
Treasury Department worked closely with the SBA to provide necessary funding, and issue
operational guidelines.24 The SBA also approved PPP loans.25 The CARES Act allowed the
SBA to rely on self-certifications from borrowers regarding their operational status and the
accuracy of information, rather than on lenders to verify supporting documentation
independently of borrowers.26
20.
To apply for a PPP loan, a borrower (such as the Named Plaintiffs) needed to
submit the following materials: a PPP Borrower Application Form (SBA Form 2483), or a
lender’s equivalent form, proof of identity, 2019 or 2020 (whichever the borrower used to
calculate their loan amount) IRS Form 1040, Schedule C, business records (such as bank
statements) establishing that borrower operated a business on or around February 15, 2020, and
certifications regarding the applicant’s business size, payroll expenses, and the need for the loan
to continue operations.27
23
“Paycheck Protection Program,” U.S. Department of Treasury, available at https://home.treasury.gov/policy-
issues/coronavirus/assistance-for-small-businesses/paycheck-protection-program#.
24
“Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, pp. 3695-3705.
25
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 9.
26
Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 2.
27
“Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
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21.
Lenders who were already approved to participate in SBA’s 7(a) program (which
is SBA’s primary business loan program for providing financial assistance to small businesses)28
were authorized to issue PPP loans.29 The SBA and the U.S. Treasury were permitted to approve
additional lenders meeting certain requirements.30 On April 30, 2020, CDFIs and Minority
Depository Institutions (“MDIs”, which are banks or credit unions either owned or directed
primarily by members of certain minority groups),31 were included in the program as lenders to
expand lending to traditionally underserved areas.32 Approved lenders (such as Prestamos) acted
as the primary contacts for businesses seeking PPP loans.33 Lenders processed the loan
applications, confirmed receipt of borrower certifications and documentation, confirmed
borrowers’ calculations of loan amounts34 by reviewing documentation, and certified the
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, pp. 3700, 3704, 3708. See also
“Assessing Compliance with BSA Regulatory Requirements: Customer Identification Program,” Federal
Financial Institutions Examination Council, available at
https://bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARegulatoryRequirements/01.
28
“7(a) Loans,” U.S. Small Business Administration, available at https://www.sba.gov/funding-
programs/loans/7a-loans.
29
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 6.
30
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 6.
31
“Minority Depository Institutions List,” FDIC, available at
https://www.fdic.gov/regulations/resources/minority/mdi.html.
32
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 10.
33
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, pp. 6-10.
34
The amount of a PPP loan was set at 2.5 times a borrower’s average monthly payroll costs, up to a maximum of
$10 million. See “Paycheck Protection Program: Program Changes Increased Lending to the Smallest
Businesses and in Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021,
available at https://www.gao.gov/assets/gao-21-601.pdf, p. 4.
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necessity of PPP loans for ongoing operations.35 For those loan applications that lenders reached
a decision to recommend for approval, lenders submitted them to the SBA for approval, and
upon the SBA’s approval, initiated disbursements of the funds to borrowers.36
22.
To minimize delays and broaden eligibility, the SBA did not require traditional
underwriting. Lenders did not follow traditional underwriting procedures also because PPP
loans were fully guaranteed by the SBA.37 The waiver of traditional underwriting allowed a
larger number of businesses to access funds quickly.38 Lenders made loan approval
recommendations based on their review of the loan applications, which included applicants’
certifications of business size, payroll expenses, and the need for funding to continue
operations.39
35 “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, pp. 3707-3708.
36 “Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses and in
Underserved Locations,” U.S. Government Accountability Office (GAO), September 2021, available at
https://www.gao.gov/assets/gao-21-601.pdf, p. 9 (“To apply for a PPP loan, potential borrowers first submitted
applications directly to a participating lender[.] The lender then reviewed the application documentation and
submitted its loan approval decision to SBA through SBA’s loan processing portal. Once received, SBA issued
a loan number to the lender. The lender then disbursed the loan amount to the borrower. […] SBA issued a loan
number when it agreed to guarantee the loan. Initially, SBA reviewed loan and borrower information to look for
duplicate applications before issuing a loan number to the lender. For Phase 3, SBA began conducting upfront
compliance checks before issuing a loan number to the lender.”)
37 “Paycheck Protection Program (PPP) Information Sheet Lenders,” available at
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf, p. 1.
38 “Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed,” U.S.
Government Accountability Office (GAO), July 2021, available at https://www.gao.gov/assets/gao-21-577.pdf,
p. 10.
39 “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3694.
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23.
Some lenders contracted with LSPs (such as Blueacorn) to act as their agents in
originating, processing, and servicing PPP loans.40 LSPs generally had technological advantages
for processing loans quickly and securely, which made them efficient in processing applications
and more likely to lend to underserved communities that had difficulties to access financial
services.41 Their lower processing costs compared to banks also made them attractive for small
businesses with the need of small loans.42 For example, Blueacorn offered technology solutions
and financial expertise to streamline the PPP application process for potential borrowers.43
Prestamos believed that engaging Blueacorn would be “more economical” and result in better
quality of service to borrowers.44
B.
PPP Loan Fraud
24.
Partly because of the relaxed underwriting requirements and expedited approval
processes, fraud was widespread in PPP lending. By December 2021, the SBA’s Office of

40 For a definition of a “Lender Service Provider” for SBA loans, see “Part 103 - Standards for Conducting
Business with SBA,” Code of Federal Regulations, available at https://www.ecfr.gov/current/title-13/chapter-
I/part-103.
41 Battisto, Jessica, et al., “Who Received PPP Loans by Fintech Lenders?,” Liberty Street Economics, May 27,
2021, available at https://libertystreeteconomics.newyorkfed.org/2021/05/who-received-ppp-loans-by-fintech-
lenders.
42 Battisto, Jessica, et al., “Who Benefited from PPP Loans by Fintech Lenders?,” Liberty Street Economics, May
27, 2021, available at https://libertystreeteconomics.newyorkfed.org/2021/05/who-benefited-from-ppp-loans-
by-fintech-lenders.
43 “Blueacorn Pitch Deck,” PRESTAMOS-00300502, p. 3; “Operation Process: Narrative,” BLUEACORN-
00001987, p. 2 (“To apply for a PPP loan, the prospect creates an account in Phoenix, which is used throughout
Blueacorn’s Eligibility Verification process. The lead is directed to complete the PPP application process using
this custom implementation of a “Phoenix” form, which Blueacorn’s developers have created, …. This is a 12-
step form created via high-performance server-side technology.”)
44 “Exhibit 16: Lender Service Provider Agreement,” PRESTAMOS-00296818 (“Lender desires to acquire staff
services from Service Provider to carry out certain functions related to the PPP Loan Portfolio rather than hiring
employees directly for those same staff functions, as it believes that this will be more economical and will result
in a higher level of service and expertise to provide better delivery to the small business concerns which Lender
desires to assist.”)
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Inspector General (“OIG”) Hotline received over 54,000 complaints related to PPP fraud.45
Financial institutions filed over 21,000 suspicious activity reports related to PPP loans with the
Financial Crimes Enforcement Network between April and October 2020.46 The SBA’s OIG
investigated the complaints received from the OIG Hotline, financial institutions, and other law
enforcement agencies, and evaluated the SBA’s handling of potentially fraudulent loans.47 The
OIG found that the SBA lacked a well-defined organizational structure for managing and
addressing potential fraud in PPP loans across the program.48 It estimated that the potential fraud
within the PPP represented eight percent of the total disbursed funds.49
25.
The OIG also found that due to inadequate guidance from the SBA, lenders faced
uncertainty in handling PPP loan fraud and recovering fraudulently obtained funds from
borrowers’ accounts.50 SBA officials noted a significant rise in lender requests for specific

45 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 2.
46 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 2.
47 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 1.
48 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 3.
49 “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape,” U.S. Small Business Administration, June 27,
2023, available at https://www.sba.gov/sites/default/files/2023-06/SBA%20OIG%20Report%2023-09.pdf, p.
11. The OIG has also reported that as of February 1, 2023, SBA was pursuing the seizure (i.e., confiscation) of
$32 million in cash proceeds from fraudulently obtained PPP loan funds and tracking another $41 million
fraudulent PPP loans for return; in addition, $95 million of PPP loan deposits were frozen by two financial
institutions due to suspected fraudulent activity. See “Serious Concerns Regarding the Return of Paycheck
Protection Program Funds,” U.S. Small Business Administration, May 31, 2023, available at
https://www.sba.gov/sites/default/files/2023-05/SBA%20OIG%20Report%2023-08_0.pdf, pp. 3-4.
50 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, pp. 8-10.
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guidance to ensure compliance with agency requirements and effective fraud management.51
Such guidance that lenders sought from the SBA related to recovering fraudulently obtained loan
funds that borrowers had already withdrawn, returning potentially fraudulent PPP loan funds
back to either the lenders or the SBA, and handling confiscated funds and remaining unspent
funds from potentially fraudulent PPP loans.52 Some of the guidance was only provided by the
SBA after the PPP had ended.53
C.
Disbursements of PPP Loan Funds
26.
As depicted in Figure 1 below, after the SBA approved borrowers for PPP loans,
lenders would initiate disbursements of PPP loan funds to borrowers using the ACH payments
network.54 According to Nacha, the organization that manages the ACH payments network, the
process for disbursement of PPP loan funds via an ACH transfer is as follows.55
a. The lender, i.e., Prestamos in this case (also known as the Originator), initiates a
PPP loan disbursement into the payment system according to the arrangement
with a borrower (the Recipient). The borrower’s name, banking information, and

51 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, p. 8.
52 Ware, Hannibal “Mike”, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” U.S.
Small Business Administration (SBA), May 26, 2022, available at https://www.sba.gov/sites/default/files/2022-
05/SBA%20OIG%20Report%2022-13.pdf, pp. 8-10; “Serious Concerns Regarding the Return of Paycheck
Protection Program Funds,” U.S. Small Business Administration, May 31, 2023, available at
https://www.sba.gov/sites/default/files/2023-05/SBA%20OIG%20Report%2023-08_0.pdf, p. 1.
53 “SBA Procedural Notice,” U.S. Small Business Administration, December 18, 2023, available at
https://www.sba.gov/sites/default/files/2024-01/5000-851892%20-%20Remediated%20%281%29.pdf.
54 “What is an ACH transaction?,” Consumer Financial Protection Bureau, May 14, 2024, available at
https://www.consumerfinance.gov/ask-cfpb/what-is-an-ach-transaction-en-1065/.
55 “How ACH Works,” National Automated Clearing House Association, available at
https://achdevguide.nacha.org/how-ach-works.
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amount information are part of the ACH payment file that the lender provides to
the lender’s bank.
b. The lender’s bank, i.e., Evolve Bank & Trust in this case (also known as the
Originating Depository Financial Institution, or ODFI), receives the payment
instructions from the lender and forwards the instructions (also referred to as an
“entry”56) to the Federal Reserve (i.e., the ACH Operator).
c.
The Federal Reserve is a central clearing facility that receives payments from the
lender’s bank (such as Evolve Bank & Trust, in this case), distributes payments to
the appropriate Receiving Depository Financial Institution, or RDFI (i.e., a
financial institution where a borrower’s account resides), and performs settlement
functions for the ODFI and the RDFI.
d. The RDFI, upon receiving an ACH payment instruction from the Federal Reserve,
posts the applicable amount of funds to the account of its Recipient (i.e., the
borrower).
56 “The Complete Guide to Understanding ACH Payments,” Integrated Research, available at
https://www.ir.com/guides/ach-payments (“Once a transaction is initiated, an entry is submitted by the bank or
payment processor handling the first phase of the ACH payments process. The bank or payment processor is
known as the Originating Depository Financial Institution (ODFI).”)
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Figure 1. PPP Loan Disbursement Process57
III.
THERE WAS A WIDE VARIETY OF REASONS WHY THE PUTATIVE CLASS
MEMBERS DID NOT RECEIVE PPP LOAN FUNDS
27.
There was a wide variety of reasons why the Putative Class Members did not
receive PPP loan funds. For some, the loan application may have been withdrawn prior to
disbursement, or the borrower’s bank may have failed to release the funds to the borrower,
possibly because of suspected fraud. For others, the ACH fund transfer that Prestamos initiated
was returned, with a return code, which in turn led to follow-up with the borrower by Blueacorn,
Prestamos, and/or the borrower’s bank. However, the return code itself does not convey
information on what follow-up was conducted with the borrower by various parties. For some
borrowers, this follow-up process seemed to have resulted in non-funding, due to various
57 “How ACH Payments Work,” National Automated Clearing House Association, available at
https://www.Nacha.org/content/how-ach-payments-work.
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reasons, including suspected fraud and/or the borrower’s failure to provide required documents
and/or information. I find that understanding specifics of the various situations that caused the
return of PPP loan funds requires more than an analysis of the return codes—it requires
individualized analysis of each specific situation that led to the return. It also requires an
individualized analysis of the timeline of follow-up actions (or inactions) of different parties
after an ACH transfer was returned.
A.
Overview of Reasons for Failure to Receive PPP Loan Funds
28.
As an initial matter, it is informative to distinguish among the following three
scenarios.
1.
Scenario 1

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2.
Scenario 2

3.
Scenario 3
31.
In the PPP loan fund disbursement process depicted in Figure 1 above, an ACH
fund transfer failed and the funds were returned to the ODFI, accompanied by an ACH return
code (also referred to as an “ACH return”).
32.
ACH returns can happen in many payment contexts, when either the payment
cannot be completed (e.g., the ACH Operator returns the funds), or when the payment initially
settles but is rejected later by the recipient’s bank.58 Common reasons for an ACH return include
incorrect recipient account information, a closed recipient bank account, incorrect routing

58 Antosz, Danielle, “ACH Return Codes: What They Mean and How to Minimize Risk,” Plaid, February 14,
2023, available at https://plaid.com/resources/ach/ach-return/ (“ACH returns occur when an ACH payment
cannot be completed for any reason, or when the payment initially settles but is rejected later. Essentially, it's
the ACH payment equivalent of a bounced check.”)
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number for the recipient’s bank, and errors in entries such as the name associated with the
recipient’s bank account. There are altogether 47 ACH return codes to choose from when the
ACH Operator or the RDFI returns loan disbursement funds.59
33.
In case of a loan, the borrower typically provides banking information (i.e., bank
account details where the borrower would like to receive loan funds) to the lender in the loan
application. The lender and/or its LSP will in turn provide such information to the ODFI for
ACH transfer. If the borrower has made an error when providing the bank account details to the
lender, the ACH transfer based on such erroneous information would fail and would be
returned.60 Even if the borrower has provided the accurate account details, the ACH transfer
could still fail if the borrower provides a personal rather than business account to receive
business loan proceeds.61
34.
A suspicion of fraud by a recipient’s bank can also lead to an ACH return.
However, in my experience, there is no single ACH return code that denotes transfer rejection
due to potential fraud. Rather, the RDFI, at its discretion, can select among several ACH return
codes in the case of suspected fraud.62 For example, in their guidance to RDFIs, the SBA OIG

59 Return codes R1-R39 and R40-R47 could be used for return of loan disbursement funds. Return codes R48-
R77 include dishonored return codes, contested return codes, and debit-related return codes. See “Nacha ISO
20022 Guide to Mapping U.S. ACH Rejected Items,” National Automated Clearing House Association, August
2023, available at https://www.nacha.org/system/files/2023-
08/NACHA_ISO20022_Guide_pain.002_reject%2008-09-23.pdf, Table 1: Mapping of Nacha Return Codes to
ISO ExternalStatusReason1 Codes, pp. 83-91.
60 “Understanding an ACH Return and What You Should Do About It,” Stax, available at
https://staxpayments.com/blog/what-is-an-ach-return/ (“There are many reasons a transaction can fail to
process; it could be as simple as a mistyped account number or something more complicated.”)
61 A number of Named Plaintiffs appear to have identified personal accounts, rather than business accounts, on
their PPP loan applications.
62 “Return for Questionable Transaction,” Nacha, available at https://www.nacha.org/rules/return-questionable-
transaction (“Is an RDFI required to use R17 to return an entry with an invalid account number that it believes
may be questionable? No, the RDFI may continue to use R03 (No Account/Unable to Locate Account) or R04
(Invalid Account Number Structure) to return those entries.”)
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and the U.S. Secret Service Office of Investigations note that “the RDFI should select the Return
Reason Code that most closely approximates the reason for the return” and list the following
codes as “acceptable options” for returning an ACH fund transfer due to a suspicion of fraud:63
“R03 (No Account/Unable to Locate Account)
R17 (File Record Edit Criteria/Entry with Invalid Account Number
Initiated Under Questionable Circumstances), which requires
“QUESTIONABLE” to be inserted in the first twelve positions of
the Addenda Record
R23 (Credit Entry Refused by Receiver)”
35.
Not only can multiple codes be used to denote the same reason for the return of
funds, but also one return code can be used for multiple (sometimes unrelated) reasons for ACH
returns. Therefore, understanding the specifics of the situation that caused the return of PPP loan
funds requires more than an analysis of the return codes—it requires individualized analysis of
each specific situation that led to the return.
36.
Generally speaking, after an ACH return, the ODFI is expected to forward the
return to the Originator for action.64 Upon receiving the return notification, the Originator and

63 “Detection and Mitigation of Paycheck Protection Program and Economic Injury Disaster Loan Fraud,” U.S.
Secret Service Office of Investigations and U.S. SBA Office of Inspector General, August 10, 2020, available at
https://www.neach.org/Portals/0/USSS%20and%20SBA%20OIG%20Joint%20Alert%20-
%20PPP%20and%20EIDL%20Fraud%20-%20TLP%20Green.pdf, p. 3. See also “Paycheck Protection
Program - Application Fraud Indicators,” BLUEACORN-02852073 (OIG) pp. 1-2.
64 Nacha Operating Rules & Guidelines, Nacha, 2024, pp. OG52-53. After an ACH return, the ODFI could also
choose to reinitiate the fund transfer or dishonor the return. Neither action applies to the ACH returns in this
case. The action of reinitiating the fund transfer only applies to return code R01 (Insufficient Funds) or R09
(Uncollected Funds). Those two codes denote a situation where money is withdrawn from a recipient’s
account, but the account does not have a sufficient amount of funds to withdraw. Those two codes are not

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the Recipient would be expected to work together to attempt to resolve the return. For example,
in a failed PPP loan disbursement, if the funds were returned because the account number and/or
routing number that the borrower provided as part of the loan application were incomplete or
incorrect, the lender and the borrower would be expected to work together to obtain correct
account and/or routing numbers.65
37.
The LSP and/or the RDFI may also be expected to assist with resolving returned
disbursements. For example, if the LSP, such as Blueacorn, was expected to assist with
resolving ACH returns of PPP loan disbursements, the lender and/or the ODFI would generally
be expected to notify the LSP about the unsuccessful loan disbursement and the reason for the
return.66 In this case, the LSP would generally be expected to work with the borrower on behalf
of the lender to attempt to resolve the returned disbursement.67 In case of an ACH return due to
suspected fraud, the LSP may be expected to be involved.68 The RDFI, as the borrower’s bank,

relevant for this case because here, funds were being deposited into a recipient’s account. The ODFI could also
dishonor the return of the funds (if it is untimely, contains incorrect information, is misrouted, is a duplicate or
results in an unintended credit to the borrower), and the RDFI could choose to contest the dishonored return.
My review suggests that the codes associated with dishonored returns and contested returns do not appear in the
data produced by Evolve Bank & Trust (the ODFI) for this case.
65 “The Complete List of ACH Rejection Codes: Why They Happen and How to Handle Them,” Stripe, February
16, 2024, available at https://stripe.com/resources/more/the-complete-list-of-ach-rejection-codes-why-they-
happen-and-how-to-handle-them#.
66 “Operation Process: Narrative,” BLUEACORN-00001987, p. 14 (“If the ACH transfer from the banks to
borrowers fails, the funds are returned to the respective bank’s accounts via Evolve; this information is recorded
in the activity file Blueacorn receives from the bank”), pp. 16-17 (discussing “bank-code-based rejections.”)
67 Blueacorn’s pitch deck shows a “Customer Service Reachout” following “Returned Wires/ACH.” See
“Blueacorn Pitch Deck,” PRESTAMOS-00300502, p. 26. See also “Operation Process: Narrative,”
BLUEACORN-00001987, p. 18. Communication between Blueacorn and borrowers following an ACH return
in some instances refers to “reverification.” See MARSHALL00028; OWSLEY00009; PRONSKY00040. See
also “Paycheck Protection Program Loan Processing Script,” BLUEACORN-00001570, p. 32.
68 For examples of fraudulent bank statements, Schedule Cs, passports, see “Paycheck Protection Program Loan
Processing Script,” BLUEACORN-00001570, pp. 21-31. See also “Paycheck Protection Program Loan
Processing Script,” BLUEACORN-00001570, p. 32 (“Appendix F: Enhanced Due Diligence” discussing the
requirements for applications initially approved by the SBA but where “a full 1040 tax return” that “will have to
include a Schedule C” was requested in addition to the “original documentation on file (ID, Schedule C, Bank
Statements).”)
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may also be expected to be involved in following up with the borrower and conducting fraud-
related investigations.69
38.
If follow-up communication with the borrower is successful in resolving the ACH
return reason, the lender would resubmit loan disbursement by initiating another ACH transfer or
another method of payment.70 Conversely, if upon the follow-up by the lender, the LSP, or the
borrower’s bank, the borrower still fails to provide necessary and correct information, it would
be the borrower’s fault for not receiving PPP loan funds. Therefore, understanding whether the
lender was responsible for a failed disbursement requires an individualized analysis of each
borrower’s situation and the timeline of actions (or inactions) of various different parties, such as
the borrower, the borrower’s bank, the ODFI, the lender, and the LSP.
B.
Analysis of ACH Return Codes Associated With Prestamos’s PPP Loan
Disbursements
39.
Two datasets made available to me (one produced by Evolve Bank & Trust, and
another provided by Prestamos) allow me to analyze the ACH return codes for the borrowers to
whom Prestamos allegedly failed to disburse the PPP loan proceeds. My analysis finds that there
was a variety of reasons why these borrowers did not receive the PPP loan funds. It also

69 According to Blueacorn’s pitch deck, a “Loan Review by Blueacorn” was part of a process to investigate
“Bank-Reported Fraud” based on either the “Borrower’s Bank Fraud Officer Report” or the “SBA Officer
Report,” and Blueacorn’s loan review included a number of manual verification steps. See “Blueacorn Pitch
Deck,” PRESTAMOS-00300502, pp. 28-29.
70 “Operation Process: Narrative,” BLUEACORN-00001987, p. 14 (“Sometimes Blueacorn declines the loan
[after an ACH return] because it’s suspicious; for others Blueacorn attempts to get new data and try again. If
there is an ACH failure, there is a semi-formal response to Prestamos/Evolve to fix and/or resend the ACH In
case of full failure, ACH funds are returned to their respective banks.”) For a description of Blueacorn’s
“Prepaid Card Process” based on “bank-code-based rejections,” see “Operation Process: Narrative,”
BLUEACORN-00001987, pp. 15-17.
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confirms that further individualized investigations are necessary in order to understand the
specific situation that caused each borrower to fail to receive the loan funds.
1.
Available Data

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Figure 2. The ACH Return Codes in Evolve Return Data
Rank
Return
Code
Return Description
Frequency
Proportion
1
R03
No Account/Unable to Locate Account
7,230
33.95%
2
R23
Credit Entry Refused by Receiver
5,799
27.23%
3
R02
Account Closed
3,828
17.98%
4
R17
File Record Edit Criteria
1,917
9.00%
5
R16
Account Frozen
1,139
5.35%
6
R04
Invalid Account Number
455
2.14%
7
R05
Unauthorized Debit to Consumer Account
Using Corporate SEC Code
383
1.80%
8
R10
Customer Advises Not Authorized
264
1.24%
9
R20
Non-Transaction Account
151
0.71%
10
R06
Returned per ODFI's Request
58
0.27%
11
R08
Stop Payment on Item
18
0.08%
12
R11
Check Truncation Entry Return
14
0.07%
13
R28
Check digit for routing number is incorrect
11
0.05%
14
R13
RDFI not qualified to participate
7
0.03%
15
R07
Authorization Revoked by Customer
6
0.03%
16
R29
Corporate Customer Advises Not
Authorized
6
0.03%
17
R45
Invalid Individual Name
4
0.02%
18
R15
Beneficiary or Account Holder Deceased
2
0.01%
19
R12
Branch Sold to Another DFI
1
0.00%
Total
21,293
100.00%
47.
R03 – No Account/Unable to Locate Account: This return would be initiated by
the RDFI and could represent multiple reasons.81 Typically, the code suggests that the borrower
account number included in the ACH instruction had the right format,82 but other issues
81 Nacha Operating Rules & Guidelines, Nacha, 2024, p. OR137.
82 Nacha Operating Rules & Guidelines, Nacha, 2024, p. OR137 (“The account number structure is valid, and it
passes the check digit validation.”) A check digit is “a digit added to a string of numbers for error detection
purposes.” (Rouse, Margaret, “Check Digit,” July 20, 2016, available at
https://www.techopedia.com/definition/1430/check-digit.)
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prevented a successful transfer, such as no such account number existing at the RDFI,83 or the
account belonging to someone other than the borrower.84 It is also possible that the RDFI
suspected that the ACH transfer was initiated due to fraud and selected this code as the reason
for return.85
48.
R23 – Credit Entry Refused by Receiver: This return would be initiated by the
RDFI, but R23 is a catch-all code that could represent multiple reasons.86 Possible examples
include, but not limited to: (1) the borrower’s account could be subject to litigation; (2) the
borrower had not authorized this account to receive deposits; (3) the borrower indicated that they
did not know or recognize the Originator (i.e., Prestamos in this case) or its ODFI (i.e., Evolve
Bank & Trust); (4) the borrower indicated that the amount deposited was incorrect.87 In my
experience, returns for these kinds of reasons in the context of PPP lending would be atypical.
Thus, it is possible that R23 was chosen because the RDFI suspected that the ACH transfer was
initiated due to fraud.88
83
Nacha Operating Rules & Guidelines, Nacha, 2024, p. OR137 (“the account number designated is not an
existing account.”)
84
Nacha Operating Rules & Guidelines, Nacha, 2024, p. OR137 (“the account number does not correspond to the
individual identified in the Entry.”)
85
“Detection and Mitigation of Paycheck Protection Program and Economic Injury Disaster Loan Fraud,” U.S.
Secret Service Office of Investigations and U.S. SBA Office of Inspector General, August 10, 2020, available at
https://www.neach.org/Portals/0/USSS%20and%20SBA%20OIG%20Joint%20Alert%20-
%20PPP%20and%20EIDL%20Fraud%20-%20TLP%20Green.pdf, p. 3.
86
Nacha Operating Rules & Guidelines, Nacha, 2024, Appendix Four, p. OR144 (“Any credit Entry that is
refused by the Receiver may be returned by the RDFI.)
87
“Return Code (R23) Explanation,” Buildium, August 15, 2022, available at
https://help.buildium.com/hc/s/article/Return-Code-R23-Account-holder-refuses-transaction-because-amount-
is-inaccurate-or-other-legal (“The Receiver may return a credit entry because one of the following conditions
exists: (1) a minimum amount required by the Receiver has not been remitted; (2) the exact amount required has
not been remitted; (3) the account is subject to litigation and the Receiver will not accept the transaction; (4)
acceptance of the transaction results in an overpayment; (5) the Originator is not known by the Receiver; or (6)
the Receiver has not authorized this credit entry to this account.”)
88 “Detection and Mitigation of Paycheck Protection Program and Economic Injury Disaster Loan Fraud,” U.S.
Secret Service Office of Investigations and U.S. SBA Office of Inspector General, August 10, 2020, available at
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29
49.
R02 – Account Closed: This return would be initiated by the RDFI because “a
previously active account has been closed by action of the customer or the RDFI.”89
50.
R17 – File Record Edit Criteria/Entry with Invalid Account Number Initiated
Under Questionable Circumstances: While an RDFI could use code R17 for routine errors in
ACH transfer instructions unrelated to fraud,90 this code is also used to return a loan fund
disbursement when the following two criteria are met: (1) the borrower’s account number was
invalid (e.g., because either the account had been closed, there was no such account existing at
the RDFI, or the account number included in the ACH instruction had a wrong format) and (2)
the RDFI believed that the transfer had been initiated under questionable circumstances.91 To
indicate a fraud-related return (and to differentiate it from returns for routine account errors), an
RDFI should add the keyword “QUESTIONABLE” in the Addenda Information field of the
return with code R17.92 Nacha further prescribes that in this case, there is a reasonable
expectation by the RDFI that the ODFI will be part of the fraud-related follow-up process by the
https://www.neach.org/Portals/0/USSS%20and%20SBA%20OIG%20Joint%20Alert%20-
%20PPP%20and%20EIDL%20Fraud%20-%20TLP%20Green.pdf, p. 3.
89 Nacha Operating Rules & Guidelines, Nacha, 2024, Appendix Four, p. OR137.
90 “Return for Questionable Transaction,” Nacha, available at https://www.nacha.org/rules/return-questionable-
transaction (“RDFIs may but are not required to use return reason code R17 to indicate that the RDFI believes
the entry was initiated under questionable circumstances. […] Can an RDFI still use R17 for ‘File Record Edit
Criteria’? Yes, R17 will still be used for this reason.”)
91 Nacha Operating Rules & Guidelines, Nacha, 2024, p. OR142 (“(1) Field(s) cannot be processed by RDFI; or
(2) the Entry contains an invalid DFI Account Number (account closed/no account/unable to locate
account/invalid account number) and is believed by the RDFI to have been initiated under questionable
circumstances; or (3) either the RDFI or Receiver has identified a Reversing Entry as one that was improperly
initiated by the Originator or ODFI.”)
92 “Return for Questionable Transaction,” Nacha, available at https://www.nacha.org/rules/return-questionable-
transaction (“How will the ODFI know the RDFI believed the entry was questionable? RDFIs electing to use
R17 for this purpose will use the description “QUESTIONABLE” in the Addenda Information field of the
return. An R17 in conjunction with this description enables these returns to be differentiated from returns for
routine account number errors. The remaining space in that field may be used for additional information related
to the return.”)
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ODFI and the lender.93 For over 80 percent of the records with the R17 code in the Evolve
Return Data, the Addenda Information field includes references to questionable, fraud-related
issues, or lack of proof of a business.94
51.
R16 – Account Frozen/Entry Returned Per OFAC Instruction: This return
would be initiated by either the RDFI or the ACH Operator.95 There are two possible reasons for
this return: (1) the RDFI had taken legal action restricting the borrower’s use of this account; or
(2) the Office of Foreign Assets Control (“OFAC”) had instructed to return this transfer.96
52.
These top five ACH return codes alone demonstrate that there was a variety of
reasons why the borrowers in the Evolve Return Data did not receive PPP loan funds. The
discussion above also shows that merely knowing the ACH return code is insufficient to
determine the specific reason of each failed disbursement and highlights the need for further
individualized investigation in order to understand the specific situation that caused each of these
borrowers to fail to receive the loan funds.
53.
Moreover, as I discuss above, after every ACH return, there is a chain of possible
actions (or inactions) by the ODFI, the lender, the LSP, the RDFI, and the borrower. For all of
93 Nacha Operating Rules & Guidelines, Nacha, 2024, p. OG54 (“Where the RDFI has flagged one or more
entries containing an invalid account as questionable, there is a reasonable expectation by the RDFI that the
ODFI will work with its Originator to ensure the appropriateness of payments initiated by its client and to either
correct or cease to originate future entries that could be perceived to be questionable.”)
94 Based on any of the following key words: “questionable,” “question,” “fraud,” “suspect,” “suspicious,” “proof
of business,” “not a business,” “non-business,” “no business,” “not business.”
95 Nacha Operating Rules & Guidelines, Nacha, 2024, Appendix Four, p. OR141; “International ACH
Transactions FAQs,” Nacha, available at https://www.nacha.org/content/international-ach-transactions-faqs
(“A Gateway Operator can be either an ACH Operator or a Participating Depository Financial Institution, as
defined by the Nacha Operating Rules, that acts as an entry point to or exit point from the U.S. for ACH
payment transactions.”)
96 Nacha Operating Rules & Guidelines, Nacha, 2024, Appendix Four, p. OR141 (“(1) Access to the account is
restricted due to specific action taken by the RDFI or by legal action; or (2) OFAC has instructed the RDFI or
Gateway to return the Entry.”)
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the top five ACH return codes that I discuss above, it would be expected that the lender or the
LSP would work with the borrower to attempt to obtain additional information in an attempt to
resolve the return. In case of a suspicion of fraud, other parties such as the borrower’s bank may
also be involved, and additional documentation concerning the propriety of the underlying ACH
transfer may be requested and/or required.. However, the return code itself does not convey
information on the chain of actions or inactions in this follow-up process. Understanding why
the borrowers in the Evolve Return Data did not receive PPP loan funds therefore also requires
an individualized analysis of the timeline of events and actions (or inactions) by many different
parties.

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IV.
THERE WAS A WIDE VARIETY OF REASONS WHY THE PUTATIVE CLASS
MEMBERS’ PPP LOANS MAY NOT HAVE BEEN FULLY FORGIVEN
77.
Borrowers may be eligible for PPP loan forgiveness. Generally, PPP loans were
forgivable if borrowers used the funds for payroll to retain employees or cover other necessary
business expenses.221 However, there was a wide variety of reasons why borrowers may not be
eligible for forgiveness, including, for example: (a) failure to provide documentation supporting
using loan proceeds to cover payroll expenses; (b) failure to maintain pre-COVID-19 employee
headcount; (c) failure to restore reduced compensation to previous levels; (d) failure to ensure
funds were allocated to payroll expenses per PPP forgiveness requirements; and (e) failure to
accurately complete the loan forgiveness application with thorough documentation.222
Inaccuracies in original loan applications such as mistakes or omissions in paperwork could also
impact forgiveness eligibility.
78.
Furthermore, even if the Putative Class Members’ PPP loans would have been
eligible for forgiveness, the loan forgiveness requirements prescribed by the SBA indicate that
the portion of the loan amount to be forgiven would have varied widely depending on each
Putative Class Member’s individualized circumstance.

221 “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3706.
222 “ERC - 10 most common PPP loan forgiveness issues,” ERC Today, March 8th, 2023, available at
https://erctoday.com/ppp-loan-forgiveness-issues/.
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A.
Overview of PPP Loan Forgiveness
79.
The CARES Act provided for “forgiveness of up to the full principal amount of
qualifying loans guaranteed under the Paycheck Protection Program (PPP).”223 The SBA
subsequently provided several updates on loan forgiveness applications and instructions.224
Generally, a borrower was eligible for loan forgiveness if the PPP loan funds were spent on
eligible expenses, including at least 60 percent of funds spent on payroll costs.225
80.
The loan forgiveness process had three steps: (a) a borrower typically first
submitted a forgiveness application and supplemental documents to the lender; (b) the lender
processed, reviewed, and submitted its forgiveness decision (i.e., approved, partially approved,
or denied) to the SBA; and (c) the SBA reviewed and approved the lender’s decision, and
remitted the forgiven amount to the lender.226
81.
SBA staff and government contractors conducted the loan eligibility and
forgiveness review process under the supervision of the SBA’s Office of Capital Access.227 All
223 “Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by Economic Aid
Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-program-temporary-
changes-paycheck-protection-program-as-amended-by-economic-aid-act, p. 3692.
224 “Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed,” U.S.
Government Accountability Office (GAO), July 2021, available at https://www.gao.gov/assets/gao-21-577.pdf,
p. 19.
225 “Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed,” U.S.
Government Accountability Office (GAO), July 2021, available at https://www.gao.gov/assets/gao-21-577.pdf,
p. 19.
226 “Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are Needed,” U.S.
Government Accountability Office (GAO), July 2021, available at https://www.gao.gov/assets/gao-21-577.pdf,
pp. 20-21.
227 “SBA’s Paycheck Protection Program Loan Review Process,” U.S. Small Business Administration, February 28,
2022, available at https://www.sba.gov/sites/default/files/2022-02/SBA%20OIG%20Report%2022-09.pdf, p.2.
(“Government contractors and SBA federal and contract staff, under the supervision of SBA’s Office of Capital
Access, conduct the loan review process. […] [R]eviews were conducted on loans with a submitted forgiveness
application.”)
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loans along with any submitted forgiveness applications were subject to an automated review. In
addition, manual reviews were performed for (a) sampled loans with a principal amount of less
than $2 million; (b) all loans with a principal amount greater than $2 million; and (c) loans
flagged during the automatic review.228 The SBA reserved the right to reject or partially adopt
the lender’s recommendation at its sole discretion, and as a result, the final forgiveness amount
can be different from the lender’s recommendation.229
B.
PPP Loan Forgiveness Requirements
82.
The PPP loan forgiveness application was onerous and required extensive
documentary support. The rules for determining the eligible loan forgiveness amount were also
complex. The SBA OIG noted that many PPP loan borrowers did not apply for loan forgiveness
because they were “intimidated by the complexity of the PPP forms, processes, and the formality
of the forgiveness process.”230 In addition, issues with the SBA’s software infrastructure231 and
lack of clarity around forgiveness created further frustrations for both borrowers and lenders.232

228 “SBA’s Paycheck Protection Program Loan Review Process,” U.S. Small Business Administration, February 28,
2022, available at https://www.sba.gov/sites/default/files/2022-02/SBA%20OIG%20Report%2022-09.pdf, pp.
2-3.
229 “SBA Procedural Notice,” U.S. Small Business Administration, July 23, 2020, available at
https://www.sba.gov/sites/default/files/2020-07/5000-20038-508.pdf, p.3 (“The Lender is responsible for
notifying the borrower of the forgiveness amount paid by SBA to the Lender. If the forgiveness amount paid by
SBA is less than the amount in the forgiveness decision issued by the Lender to SBA, the Lender must also
notify the borrower of the amount in the Lender’s forgiveness decision. […] SBA reserves the right to review
the Lender’s decision in its sole discretion.”)
230 “COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape,” U.S. Small Business Administration, June 27,
2023, available at https://www.sba.gov/sites/default/files/2023-06/SBA%20OIG%20Report%2023-09.pdf, p.
27.
231 Ennis, Dan, “Lenders Report PPP Portal Access Issues Minutes After Relaunch,” Banking Dive, April 27, 2020,
available at https://www.bankingdive.com/news/paycheck-protection-plan-bank-of-america-portal-
covid/576796/.
232 “COVID-19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions,” U.S. Government
Accountability Office (GAO), September 2020, available at https://www.gao.gov/assets/710/709492.pdf, p. 233
(“Finally, representatives of two associations commented that the resource demands and the lack of clarity

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83.
Because of the SBA’s specific requirements for loan forgiveness and the
complexities of the PPP loan forgiveness application,233 there could have been a wide variety of
reasons why a PPP loan may not have been fully forgiven. Failure to meet one or more of the
following requirements would have jeopardized approval or affected the loan forgiveness
amount:234
a. Covered Period: Only expenses incurred within a specified time window were
eligible for determining the loan forgiveness amount. This covered period usually
lasted for 8 to 24 weeks starting from the disbursement date of a PPP loan.235

surrounding the application and forgiveness processes have led to lender fatigue with the program”); Reosti,
John, “New PPP Angst: Waiting for SBA to Sign Off on Loan Forgiveness,” American Banker, September 22,
2020, available at https://www.americanbanker.com/news/new-ppp-angst-waiting-for-sba-to-sign-off-on-loan-
forgiveness (“The GAO report, citing concerns from trade groups, observed that a lack of clarity around
forgiveness had resulted in ‘lender fatigue with the program.’ Borrowers feel the same way, bankers said.”)
233 There are three application forms available, namely Forms 3508, 3508EZ, and 3508S. Forms 3508 and 3508EZ
are for loans over $150,000. Form 3508S is for loans of $150,000 and below. While required calculations may
be more abbreviated for Forms 3508EZ and 3508S, the key requirements are largely the same across all forms.
See “PPP Loan Forgiveness Application Form 3508,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508%20%287.30.2021%29-508.pdf; “PPP
Loan Forgiveness Application Form 3508EZ,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Applications%20and%20Instructions%20--%203508EZ%20%287.30.2021%29-508.pdf;
“PPP Loan Forgiveness Application Form 3508S,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508S%20%287.30.2021%29-508.pdf.
234 “Business Loan Program Temporary Changes: Paycheck Protection Program - Loan Forgiveness Program
Requirements and Loan Review Procedures as Amended by Economic Aid Act,” Federal Register, February 5,
2021, available at https://www.federalregister.gov/documents/2021/02/05/2021-02314/business-loan-program-
temporary-changes-paycheck-protection-program-loan-forgiveness-requirementsfootnote-80-p8295footnote-80-
p8295, pp. 8286-8295 (“[I]f SBA determines that the borrower is ineligible for the loan amount or loan
forgiveness amount claimed by the borrower, SBA will direct the lender to deny the loan forgiveness
application in whole or in part, as appropriate. SBA may also seek repayment of the outstanding PPP loan
balance or pursue other available remedies.”)
235 The covered period was originally 8 weeks. However, after the enactment of Paycheck Protection Program
Flexibility Act of 2020 (Flexibility Act) (Pub. L. 116-142) on June 5, 2020, the covered period was extended to
24 weeks. See “Business Loan Program Temporary Changes; Paycheck Protection Program - Revisions to First
Interim Final Rule,” Federal Register, June 5, 2020, available at
https://www.federalregister.gov/documents/2020/06/16/2020-12909/business-loan-program-temporary-
changes-paycheck-protection-program-revisions-to-first-interim-final, p. 36310.
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b. Payroll Cost 60 Percent Requirement: Payroll costs were required to account for
at least 60 percent of the loan forgiveness amount.
c.
Eligible Payroll Cost: The total amount of loan funds used for payroll costs
eligible for forgiveness could not exceed an annual salary of $100,000 for each
employee. For example, if a borrower used PPP loan funds to pay an employee’s
annual salary of $190,000, the borrower would only be able to use and prorate up
to $100,000 over the covered period in the eligible payroll cost for the forgiveness
application.
d. Salary/Wage and Full-Time Equivalent (“FTE”)236 Employees Reduction: A
borrower should not have (i) reduced salaries by more than 25 percent compared
to the most recent full quarter before the covered period and (ii) reduced average
FTE employee headcount between January 1, 2020 and the end of the covered
period.237
e.
Owner Compensation: Eligible compensation paid to an owner-employee (with an
ownership stake of five percent or more) or self-employed individual/general
partner throughout a covered period was capped to the lower of (i) $20,833238 or
(ii) 2.5-months’ worth of annual compensation.
236 FTE is a measure of the number of employees accounting for each employee’s number of hours paid. It is
calculated for each employee as the average number of hours paid per week divided by 40. The resulting ratio
is capped at one and rounded to the nearest tenth. Alternatively, a borrower could opt to assign a 1.0 FTE for
employees that worked 40 hours (or more) per week and a 0.5 FTE for employees that worked less than 40
hours per week.
237 Exemption for salary reduction may be granted if a borrower restored salary levels. Similarly, exemption for
FTE reduction may be granted if a borrower (i) attempted to rehire affected employee or similarly qualified
employee but was unable to or (ii) was not able to operate the business at the pre-pandemic level.
238 This is 2.5-months’ worth of annual compensation of $100,000. This cap was $15,385 for borrowers that
received a PPP loan before June 5, 2020 and elected to use an eight-week covered period. See “Paycheck
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f.
Eligible Nonpayroll Costs: Loan funds used for certain nonpayroll costs were
eligible for forgiveness provided that they did not exceed 40 percent of the loan
forgiveness amount. Examples include mortgage payments, rent obligations,
utility payments, operations expenditures, property damage costs, supplier costs,
worker protection expenditures.239 A borrower must have been paying such
nonpayroll costs before February 15, 2020, in order for these costs to be eligible
for forgiveness. For example, for loan funds used for mortgage payments to be
eligible for forgiveness, the borrower’s mortgage loan should have been drawn
before February 15, 2020.
84.
Meeting the requirements above was a necessary but not a sufficient condition for
PPP loan forgiveness. A borrower was also required to submit or maintain the following
documents:240
a.
Payroll: Documentation that verified eligible payroll costs. Examples include
bank account statements, third-party payroll service provider reports, and tax
forms.
Protection Program: Frequently Asked Questions (FAQs) on PPP Loan Forgiveness,” August 4, 2020, available
at https://www.sba.gov/sites/default/files/2020-08/PPP%20Loan%20Forgiveness%20FAQs%208-4-20-508.pdf,
p. 4.
239 For detailed definition on what specific costs are eligible, see “PPP Loan Forgiveness Application Form 3508,”
U.S. Small Business Administration, available at https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508%20%287.30.2021%29-508.pdf, p. 2.
240 Borrowers applying for forgiveness using Form 3508S were not required to submit additional documentation at
the time of submission but were still required to maintain them and provide them if requested for review or
audit. See “PPP Loan Forgiveness Application Form 3508,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508%20%287.30.2021%29-508.pdf; “PPP
Loan Forgiveness Application Form 3508S,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508S%20%287.30.2021%29-508.pdf.
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b. FTE: Documentation that verified the average number of FTE employees on
payroll per week.
c.
Nonpayroll: Documentation that verified eligible nonpayroll costs and existence
of those costs before February 15, 2020. Examples include lender amortization
schedules for a business mortgage, a copy of current lease agreement for business
rent, and a copy of invoices for business utility and other covered expenditures.
d. Other Records: All records related to a borrower’s PPP loan. Examples include
documentation supporting that the borrower was not able to operate at the same
level of business activity as before February 15, 2020, due to government
measures related to COVID-19 such as social distancing,241 as well as other
documentation supporting the loan forgiveness application and demonstrating
compliance with PPP requirements, such as worksheet used to calculate wage and
employee headcount reductions.
85.
In addition, inaccuracies in the original loan application could also impact loan
forgiveness eligibility. On February 5, 2021, the SBA published an interim final rule on PPP
loan forgiveness that states, “[i]f SBA determines that a borrower is ineligible for the PPP loan,
SBA will direct the lender to deny the loan forgiveness application. […] Further, if SBA
determines that the borrower is ineligible for the loan amount or loan forgiveness amount
claimed by the borrower, SBA will direct the lender to deny the loan forgiveness application in
whole or in part, as appropriate. SBA may also seek repayment of the outstanding PPP loan
241 This documentation only applied to borrowers seeking exemption from the FTE employee requirement
explained in Section IV.B.
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balance or pursue other available remedies.”242 Thus, to the extent that a failed disbursement of
loan funds to a Putative Class Member was caused by inaccuracies in the borrower’s original
loan application that would call the borrower’s loan eligibility into question, such inaccuracies
could also have compromised this Putative Class Member’s eligibility for loan forgiveness even
if the original loan was not clawed back.
C.
The Final Portion of the Loan Amount to be Forgiven Would have Varied
Widely
86.
Even if the SBA had approved loan forgiveness for the Putative Class Members,
the final portion of the loan amount to be forgiven would have varied widely depending on each
Putative Class Member’s individualized circumstance. To illustrate this point, consider the
following example for a self-employed sole proprietor:243
a.
Recipient A, a self-employed sole proprietor, received $45,385 in PPP loan funds
on June 24, 2020.
b. First, a covered period would need to be determined. Suppose that Recipient A
opted for an 8-week covered period. Only costs incurred within this period would
be eligible for forgiveness.
242 “Business Loan Program Temporary Changes: Paycheck Protection Program - Loan Forgiveness Program
Requirements and Loan Review Procedures as Amended by Economic Aid Act,” Federal Register, February 5,
2021, available at https://www.federalregister.gov/documents/2021/02/05/2021-02314/business-loan-program-
temporary-changes-paycheck-protection-program-loan-forgiveness-requirements, p. 8295. This is an update to
the original subsection that was published on June 1, 2020. For the original publication, see “Business Loan
Program Temporary Changes; Paycheck Protection Program - SBA Loan Review Procedures and Related
Borrower and Lender Responsibilities,” Federal Register, June 1, 2020, available at
https://www.federalregister.gov/documents/2020/06/01/2020-11533/business-loan-program-temporary-
changes-paycheck-protection-program-sba-loan-review-procedures-and, p. 33013.
243 The example has been adapted from loan forgiveness pre-work examples provided by Chase Bank. See
“Paycheck Protection Program (PPP): Loan Forgiveness Pre-Work Examples,” Chase Bank, available at
https://recovery.chase.com/content/dam/chase/recover/sba/documents/ppp-loan-forgiveness-pre-work-
examples.pdf.
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c.
Next, eligible owner compensation would need to be calculated. Suppose
Recipient A was making $150,000 in annual compensation, meaning his/her
annual wage would first be subject to a statutory cap of $100,000 for this
calculation. Then, the $100,000 would be prorated for the covered period. Based
on the applicable rule, Recipient A’s eligible owner compensation would be
$15,385.244 If Recipient A had chosen a different covered period, such as 24
weeks, the calculation above would have been different.
d. Then, eligible non-payroll costs such as mortgage interest, rent, and utility
payments would need to be calculated. Assume that Recipient A incurred (i) a
mortgage interest payment of $10,000; (ii) a utility payment of $10,000; and (iii)
supplier costs of $10,000. Only non-payroll costs associated with obligations
assumed before February 15, 2020 were eligible. Suppose Recipient A drew a
mortgage loan on March 15, 2020, which means the (i) mortgage interest payment
would not be eligible for forgiveness. Only (ii) utility and (iii) supplier costs
would be eligible for forgiveness. In total, Recipient A’s non-payroll costs
eligible for forgiveness were $20,000.
e.
Because the SBA required at least 60 percent of funds to be used for payroll cost,
eligible non-payroll costs would have been reduced from $20,000 to $10,257 to
maintain the 4:6 ratio with the payroll cost of $15,385. This means that
$25,642245 would be the maximum amount that could be forgiven.
244 Divide $100,000 by 52 weeks then multiply by 8.
245 The sum of $10,257 and $15,385.
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 58 of 94

56
f. Thus, Recipient A received a PPP loan of $45,385. However, only $25,642
would be eligible for forgiveness.
87.
For borrowers with employees, the forgiveness amount calculation would be
further complicated by salary/wage and FTE reductions. If Recipient A had employees on
payroll, but reduced their salary by more than 25 percent, the salary reduction in excess of 25
percent would be deducted from the loan forgiveness amount. Similarly, if Recipient A reduced
the number of employees on payroll, the loan forgiveness amount would be reduced.246
88.
As a result, an individualized analysis of each Putative Class Member’s loan
forgiveness application that accounts for the covered period, payroll cost, non-payroll cost,
employee wage level, and employee headcount would be necessary to determine each Putative
Class Member’s potential loan forgiveness amount, if any.

____________________________________
Kenneth Swain
July 12, 2024

246 “PPP Loan Forgiveness Application Form 3508,” U.S. Small Business Administration, available at
https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--%203508%20%287.30.2021%29-508.pdf,
“Line 11,” “Line 12,” and “Line 13,” p. 4.
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 59 of 94

APPENDIX A
Kenneth A. Swain
4827 27th Place North
Arlington, Virginia 22207
703-627-2743
kaswain77@gmail.com
Eleven Canterbury
Expert Witness, Commercial Banking Matters,
primary focus on Payroll Protection Program
January 2024-Present
Concurrent with Freedom Bank
Freedom Bank of Virginia
Fairfax, Virginia
November 2023-
Present
Relationship Manager, specializing in Commercial Banking.
Sandy Spring Bank
Olney, Maryland

February 2016-2023
Senior Vice President, Commercial Banking
Subject Matter Expert:
NCino Commercial Banking Integration
Client Experience Team
Payroll Protection Program
Implemented cross banking division usage by commercial clients, including Wealth and
Insurance.
Sourced Commercial Banking business.
Truist (formally SunTrust) Bank
Washington, DC
December 2014-2016
Senior Vice President, Medical Specialty Group within
Wealth Management Group
Series 7 and Series 66 Licensed.
Virginia Life, Health, Annuity Licensed.
Created and build Commercial Medical Relationships
PNC Bank
Washington, DC
February 2004-2014
Senior Vice President
Managed Business Banking in Washington, DC
Winner of Southeast Territory Manager of the year, 2014
Member Business Finance Group SBA 504 program loan committee
James Monroe Bank
A-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 60 of 94

Arlington, Virginia
Chief Credit Officer
November 1998-2004
Responsible for approving and managing commercial credits.
Pharmacy Healthcare Industries, (PHI) Inc, CFO, Director
May 1986-1996
and Founder
Laguna Hills, California
PHI was an innovator in outsourced contract pharmacy management
In California. It was considered an expert in its field.
Sold to a public company.

Polymed Manufacturing Company
Baltimore, Maryland
June 1990-1993
President and CEO and owner
Polymed was a turnaround medical products manufacturing
company which I exited with a sale to a public company.

Washington Ventures
Washington, DC
May 1968-1990
President, CEO and Director
An SBA licensed Venture Capital Company,
owned by Washington Bancorp
specializing in local DC equity investments
Enterprise Bank
Tysons Corner, Virginia
May 1984-1986
Senior Vice President, Commercial Banking
Allied Capital Corp.
Washington, DC
A publicly owned venture capital company
April 1978-1984
Manager Allied Lending Corp. (subsidiary)
licensed by the SBA
Expert in Small Business Administration Lending Programs,
using them to build an SBA guaranteed loan portfolio.
United Virginia Bank
Alexandria Virginia

June 1975-1978
Vice President, Commercial Relationship Manager
Irving Trust Company
New York, New York
July 1972-1975
Assistant Vice President
Commercial Banking trainee and
A-2
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 61 of 94

Commercial Banking relationship manager
Focus on Lending and Treasury Management tools for
Fortune 100 and smaller businesses
Member:
Washington Golf and Country Club, serving on Finance and Audit Committees
Finance Committee, The Child and Family Network Centers, Alexandria, Virginia
Education:
MBA, George Washington University, Washington, DC, 1979
BA, University of Pennsylvania, 1972
Milton Academy, Milton, Massachusetts, 1968
Licenses:
Virginia Life, Health, Annuity-current
Series 7 and Series 66-lapsed
DC Lay Eucharistic Minister
Serving:
Washington National Cathedral, Lay Eucharistic Minister and Usher
St Mary’s Episcopal Church, Arlington, Virginia, Team Captain Ushers
A-3
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 62 of 94

APPENDIX B
MATERIALS CONSIDERED
Legal Documents
Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint, Alicia Marshall, Daniel
Pronsky, Paris Townsend, Nancilee Holland, Leona Owsley, Kolawole Ahmadou, Kiana
Dervin, Kristina Henderson, Dustin Innis, Kelly Stalnaker and Jamie Jones, individually
and on behalf of all others similarly situated, Plaintiffs, v. Prestamos CDFI, LLC and
Chicanos Por La Causa, Inc., Defendants., Case No. 5:21-cv-04337-JMG, June 3, 2022.
Memorandum Opinion, Alicia Marshall, et al., Plaintiffs, v. Prestamos CDFI, LLC, Civil Action
No. 5:21-cv-04337-JMG, March 30, 2023.
Opinion & Order, Eric Greathouse, et al., Plaintiffs, v. Capital Plus Financial, LLC, et al.,
Defendants., Case No. 4:22-cv-0686-P, September 6, 2023.
Plaintiff’s Brief in Opposition to Defendants’ Motion to Dismiss, Alicia Marshall, et al.,
individually and on behalf of all others similarly situated, Plaintiffs, v. Prestamos CDFI,
LLC and Chicanos Por La Causa, Inc., Defendants., Civil Action No. 5:21-cv-04337-
JMG, June 17, 2022.
Reply in Support of Defendants’ Motion to Dismiss Plaintiff’s Second Amended Complaint,
Alicia Marshall, Daniel Pronsky, Paris Townsend, Nancilee Holland, Leona Owsley,
Kolawole Ahmadou, Kiana Dervin, Kristina Henderson, Dustin Innis, Kelly Stalnaker
and Jamie Jones, individually and on behalf of all others similarly situated, Plaintiffs, v.
Prestamos CDFI, LLC and Chicanos Por La Causa, Inc., Defendants., Case No. 5:21-cv-
04337-JMG, June 24, 2022.
Third Amended Class Action Complaint and Demand for Jury Trial, 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, Plaintiffs, v. Prestamos CDFI,
LLC and Chicanos Por La Causa, Inc., Defendants., Civil Action No. 5:21-cv-04337-
JMG, May 2, 2024.
Deposition
Deposition of Alicia Marshall - Rough Draft, Alicia Marshall, et al. v. Prestamos CDFI, LLC,
July 9, 2024.
Publication
Nacha Operating Rules & Guidelines, Nacha, 2024.
Confidential and Privileged
B-1
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Public Documents from the Internet
“7(a) Loans,” U.S. Small Business Administration, available at https://www.sba.gov/funding-
programs/loans/7a-loans.
“About Blueacorn,” Blueacorn, available at https://blueacorn.co/about.
“About EECU,” EECU, available at https://eecu.org/about-us/about-eecu.
“About Us,” Prestamos CDFI, available at https://prestamoscdfi.org/about-prestamos/.
“ACH Return Codes: What They Mean and How to Minimize Risk,” Antosz, Danielle, Plaid,
February 14, 2023, available at https://plaid.com/resources/ach/ach-return/.
“Assessing Compliance with BSA Regulatory Requirements: Customer Identification Program,”
Federal Financial Institutions Examination Council, available at
https://bsaaml.ffiec.gov/manual/AssessingComplianceWithBSARegulatoryRequirements/
01.
“Bluebird Bank Account Deposit Account Agreement,” Bluebird, available at
https://www.bluebird.com/legal/deposit-account-agreement.
“Building on Success and Trust,” Prestamos CDFI, available at https://prestamoscdfi.org/ppp/.
“Business Loan Program Temporary Changes: Paycheck Protection Program - Loan Forgiveness
Program Requirements and Loan Review Procedures as Amended by Economic Aid
Act,” Federal Register, February 5, 2021, available at
https://www.federalregister.gov/documents/2021/02/05/2021-02314/business-loan-
program-temporary-changes-paycheck-protection-program-loan-forgiveness-
requirements.
“Business Loan Program Temporary Changes; Paycheck Protection Program - Revisions to First
Interim Final Rule,” Federal Register, June 5, 2020, available at
https://www.federalregister.gov/documents/2020/06/16/2020-12909/business-loan-
program-temporary-changes-paycheck-protection-program-revisions-to-first-interim-
final.
“Business Loan Program Temporary Changes; Paycheck Protection Program - SBA Loan
Review Procedures and Related Borrower and Lender Responsibilities,” Federal
Register, June 1, 2020, available at
https://www.federalregister.gov/documents/2020/06/01/2020-11533/business-loan-
program-temporary-changes-paycheck-protection-program-sba-loan-review-procedures-
and.
“Business Loan Program Temporary Changes; Paycheck Protection Program as Amended by
Economic Aid Act,” Federal Register, January 14, 2021, available at
https://www.federalregister.gov/documents/2021/01/14/2021-00451/business-loan-
program-temporary-changes-paycheck-protection-program-as-amended-by-economic-
aid-act.
“Check Digit,” Rouse, Margaret, July 20, 2016, available at
https://www.techopedia.com/definition/1430/check-digit.
“COVID-19 Pandemic EIDL and PPP Loan Fraud Landscape,” U.S. Small Business
Administration, June 27, 2023, available at https://www.sba.gov/sites/default/files/2023-
06/SBA%20OIG%20Report%2023-09.pdf.
“COVID-19: Federal Efforts Could Be Strengthened by Timely and Concerted Actions,” U.S.
Government Accountability Office (GAO), September 2020, available at
https://www.gao.gov/assets/710/709492.pdf.
“Dave - About Us,” Dave, Inc, available at https://dave.com/about.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 64 of 94

“Detection and Mitigation of Paycheck Protection Program and Economic Injury Disaster Loan
Fraud,” U.S. Secret Service Office of Investigations and U.S. SBA Office of Inspector
General, August 10, 2020, available at
https://www.neach.org/Portals/0/USSS%20and%20SBA%20OIG%20Joint%20Alert%20
-%20PPP%20and%20EIDL%20Fraud%20-%20TLP%20Green.pdf.
“EECU Routing #: 311981614,” EECU, available at https://eecu.org/personal-
banking/checking-accounts/checking-savings-resource-center/common-tasks/eecu-
routing-311981614.
“ERC - 10 most common PPP loan forgiveness issues,” ERC Today, March 8th, 2023, available
at https://erctoday.com/ppp-loan-forgiveness-issues/.
“Find a Routing Number,” Wise, available at https://wise.com/us/routing-number/.
“How ACH Payments Work,” National Automated Clearing House Association, available at
https://www.Nacha.org/content/how-ach-payments-work.
“How ACH Works,” National Automated Clearing House Association, available at
https://achdevguide.nacha.org/how-ach-works.
“iCG Pay - Complete List of ACH NOC codes,” iCG Pay, January 18th, 2022, available at
https://news.icheckgateway.com/complete-list-of-ach-notification-of-change-noc-codes.
“Incoming ACH Return File Layout,” Evolve Bank, available at
https://developers.getevolved.com/enterprise/docs/incoming-ach-return-file-layout.
“International ACH Transactions FAQs,” Nacha, available at
https://www.nacha.org/content/international-ach-transactions-faqs.
“Lenders Report PPP Portal Access Issues Minutes After Relaunch,” Ennis, Dan, Banking Dive,
April 27, 2020, available at https://www.bankingdive.com/news/paycheck-protection-
plan-bank-of-america-portal-covid/576796/.
“Minority Depository Institutions List,” FDIC, available at
https://www.fdic.gov/regulations/resources/minority/mdi.html.
“Nacha ISO 20022 Guide to Mapping U.S. ACH Rejected Items,” National Automated Clearing
House Association, August 2023, available at https://www.nacha.org/system/files/2023-
08/NACHA_ISO20022_Guide_pain.002_reject%2008-09-23.pdf.
“New PPP Angst: Waiting for SBA to Sign Off on Loan Forgiveness,” Reosti, John, American
Banker, September 22, 2020, available at https://www.americanbanker.com/news/new-
ppp-angst-waiting-for-sba-to-sign-off-on-loan-forgiveness.
“Part 103 - Standards for Conducting Business with SBA,” Code of Federal Regulations,
available at https://www.ecfr.gov/current/title-13/chapter-I/part-103.
“Paycheck Protection Program,” U.S. Department of Treasury, available at
https://home.treasury.gov/policy-issues/coronavirus/assistance-for-small-
businesses/paycheck-protection-
program#:~:text=Small%20Business%20Paycheck%20Protection%20Program,the%20D
epartment%20of%20the%20Treasury.
“Paycheck Protection Program,” U.S. Small Business Administration (SBA), available at
https://www.sba.gov/funding-programs/loans/covid-19-relief-options/paycheck-
protection-program.
“Paycheck Protection Program (PPP) Information Sheet Lenders,” available at
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20
Sheet.pdf.
Confidential and Privileged
B-1
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“Paycheck Protection Program (PPP) Information Sheet: Borrowers,” available at
https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%
20Sheet.pdf.
“Paycheck Protection Program (PPP) Report: Approvals through 05/31/2021,” U.S. Small
Business Administration (SBA), available at https://www.sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf.
“Paycheck Protection Program (PPP) Report: Approvals through 08/08/2020,” U.S. Small
Business Administration (SBA), available at https://www.sba.gov/sites/default/files/2020-
08/PPP_Report%20-%202020-08-10-508.pdf.
“Paycheck Protection Program (PPP): Loan Forgiveness Pre-Work Examples,” Chase Bank,
available at https://recovery.chase.com/content/dam/chase/recover/sba/documents/ppp-
loan-forgiveness-pre-work-examples.pdf.
“Paycheck Protection Program: Frequently Asked Questions (FAQs) on PPP Loan Forgiveness,”
August 4, 2020, available at https://www.sba.gov/sites/default/files/2020-
08/PPP%20Loan%20Forgiveness%20FAQs%208-4-20-508.pdf.
“Paycheck Protection Program: Program Changes Increased Lending to the Smallest Businesses
and in Underserved Locations,” U.S. Government Accountability Office (GAO),
September 2021, available at https://www.gao.gov/assets/gao-21-601.pdf.
“Paycheck Protection Program: SBA Added Program Safeguards, but Additional Actions Are
Needed,” U.S. Government Accountability Office (GAO), July 2021, available at
https://www.gao.gov/assets/gao-21-577.pdf.
“PPP Loan Forgiveness Application Form 3508,” U.S. Small Business Administration, available
at https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--
%203508%20%287.30.2021%29-508.pdf.
“PPP Loan Forgiveness Application Form 3508EZ,” U.S. Small Business Administration,
available at https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Applications%20and%20Instructions%20--
%203508EZ%20%287.30.2021%29-508.pdf.
“PPP Loan Forgiveness Application Form 3508S,” U.S. Small Business Administration,
available at https://www.sba.gov/sites/default/files/2021-07/PPP%20--
%20Forgiveness%20Application%20and%20Instructions%20--
%203508S%20%287.30.2021%29-508.pdf.
“Prestamos CDFI: Phoenix, Arizona,” CDFI Coalition, available at https://cdfi.org/wp-
content/uploads/2019/02/Prestamos-CDFI.pdf.
“Return Code (R23) Explanation,” Buildium, August 15, 2022, available at
https://help.buildium.com/hc/s/article/Return-Code-R23-Account-holder-refuses-
transaction-because-amount-is-inaccurate-or-other-legal.
“Return for Questionable Transaction,” Nacha, available at https://www.nacha.org/rules/return-
questionable-transaction.
“SBA as a Vehicle for Crisis Relief: Lessons from the COVID-19 Pandemic,” Levin, Adam G.,
Anthony A. Cilluffo, and Bruce R. Lindsay, Congressional Research Service, September
14, 2023, available at https://crsreports.congress.gov/product/pdf/R/R47694.
“SBA Procedural Notice,” U.S. Small Business Administration, July 23, 2020, available at
https://www.sba.gov/sites/default/files/2020-07/5000-20038-508.pdf.
Confidential and Privileged
B-1
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“SBA Procedural Notice,” U.S. Small Business Administration, December 18, 2023, available at
https://www.sba.gov/sites/default/files/2024-01/5000-851892%20-
%20Remediated%20%281%29.pdf.
“SBA Re-Opening Paycheck Protection Program to Small Lenders on Friday, January 15 and All
Lenders on Tuesday, January 19,” U.S. Small Business Administration, January 13,
2021, available at https://www.sba.gov/article/2021/jan/13/sba-re-opening-paycheck-
protection-program-small-lenders-friday-january-15-all-lenders-tuesday.
“SBA’s Handling of Potentially Fraudulent Paycheck Protection Program Loans,” Ware,
Hannibal “Mike”, U.S. Small Business Administration (SBA), May 26, 2022, available at
https://www.sba.gov/sites/default/files/2022-05/SBA%20OIG%20Report%2022-13.pdf.
“SBA’s Paycheck Protection Program Loan Review Process,” U.S. Small Business
Administration, February 28, 2022, available at
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“Serious Concerns Regarding the Return of Paycheck Protection Program Funds,” U.S. Small
Business Administration, May 31, 2023, available at
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08_0.pdf.
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https://dave.com/spending-account.
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https://www.ir.com/guides/ach-payments.
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Stripe, February 16, 2024, available at https://stripe.com/resources/more/the-complete-
list-of-ach-rejection-codes-why-they-happen-and-how-to-handle-them#ach-rejection-
codes-list.
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https://staxpayments.com/blog/what-is-an-ach-return/.
“What is an ACH transaction?,” Consumer Financial Protection Bureau, May 14, 2024,
available at https://www.consumerfinance.gov/ask-cfpb/what-is-an-ach-transaction-en-
1065/.
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Economics, May 27, 2021, available at
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by-fintech-lenders.
“Who Received PPP Loans by Fintech Lenders?,” Battisto, Jessica, et al., Liberty Street
Economics, May 27, 2021, available at
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fintech-lenders.
Bates-Stamped Documents
AHMADOU00001.
AHMADOU00008.
AHMADOU00010.
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AHMADOU000161.
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DAVE-00000100.
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DAVE-00000176.
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DAVE-00000246.
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DAVE-00000312.
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DERVIN00051.
DERVIN00053.
DERVIN00055.
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DERVIN00057.
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DERVIN00126.
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EVOLVE-00000006.
EVOLVE-00000007.
EVOLVE-00000009.
EVOLVE-00000010.
EVOLVE-00000011.
EVOLVE-00000011_Highly Confidential.
EVOLVE-00000012.
EVOLVE-00000012_Highly Confidential.
EVOLVE-00000013.
EVOLVE-00000013_Highly Confidential.
EVOLVE-00000014.
EVOLVE-00000017.
EVOLVE-00000018.
EVOLVE-00000019.
EVOLVE-00000020.
EVOLVE-00000020_Highly Confidential.
EVOLVE-00000021.
EVOLVE-00000022.
EVOLVE-00000025.
EVOLVE-00000027.
EVOLVE-00000027_Highly Confidential.
EVOLVE-00000028.
EVOLVE-00000029.
EVOLVE-00000032.
EVOLVE-00000036.
EVOLVE-00000036_Highly Confidential.
EVOLVE-00000037.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 74 of 94

EVOLVE-00000039.
EVOLVE-00000042.
EVOLVE-00000042_Highly Confidential.
EVOLVE-00000043.
EVOLVE-00000044.
EVOLVE-00000044_Highly Confidential.
EVOLVE-00000045.
EVOLVE-00000048.
EVOLVE-00000049.
EVOLVE-00000050.
EVOLVE-00000050_Highly Confidential.
EVOLVE-00000051.
EVOLVE-00000052.
EVOLVE-00000055.
EVOLVE-00000056.
EVOLVE-00000057.
EVOLVE-00000058.
EVOLVE-00000059.
EVOLVE-00000060.
EVOLVE-00000061.
EVOLVE-00000069.
EVOLVE-00000070.
EVOLVE-00000071.
EVOLVE-00000072.
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GRICHAR000001.
HENDERSON00001.
HENDERSON00022.
HENDERSON00042.
HENDERSON00044.
HENDERSON00045.
HENDERSON00046.
HENDERSON00047.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 75 of 94

HENDERSON00048.
HENDERSON00049.
HENDERSON00050.
HENDERSON00051.
HENDERSON00052.
HOLLAND00001.
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HOLLAND00051.
HOLLAND00053.
HOLLAND00055.
HUNTING-00000013.
INNIS00001.
INNIS00038.
INNIS00040.
INNIS00042.
INNIS00066.
INNIS00067.
INNIS00069.
INNIS00074.
INNIS00098.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 76 of 94

INNIS00099.
INNIS00100.
JONES00001.
JONES00006.
MARSHALL00001.
MARSHALL00002.
MARSHALL00003.
MARSHALL00004.
MARSHALL00017.
MARSHALL00020.
MARSHALL00021.
MARSHALL00022.
MARSHALL00023.
MARSHALL00024.
MARSHALL00025.
MARSHALL00026.
MARSHALL00027.
MARSHALL00028.
MARSHALL00029.
MARSHALL00033.
MARSHALL00034.
MARSHALL00035.
MARSHALL00037.
MARSHALL00041.
MARSHALL00045.
MARSHALL00046.
MARSHALL00050.
MARSHALL00052.
MARSHALL00063.
MARSHALL00065.
MARSHALL00068.
MARSHALL00071.
MARSHALL00074.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 77 of 94

MARSHALL00076.
MARSHALL00078.
MARSHALL00080.
MARSHALL00081.
MARSHALL00082.
MARSHALL00083.
MARSHALL00084.
MARSHALL00087.
MARSHALL00088.
MARSHALL00091.
MARSHALL00092.
MARSHALL00095.
MARSHALL00096.
MARSHALL00098.
MARSHALL00099.
MARSHALL00101.
MARSHALL00102.
MARSHALL00103.
MARSHALL00104.
MARSHALL00105.
MARSHALL00106.
MARSHALL00107.
MARSHALL00108.
MARSHALL00110.
MARSHALL00111.
MARSHALL00112.
MARSHALL00113.
MARSHALL00114.
MARSHALL00115.
MARSHALL00116.
MARSHALL00119.
MARSHALL00121.
MARSHALL00123.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 78 of 94

MARSHALL00125.
MARSHALL00127.
MARSHALL00129.
MARSHALL00131.
MARSHALL00133.
MARSHALL00134.
MARSHALL00135.
MARSHALL00137.
MARSHALL00138.
MARSHALL00139.
MARSHALL00140.
MARSHALL00141.
META-00000002.
OWSLEY00001.
OWSLEY00002.
OWSLEY00003.
OWSLEY00004.
OWSLEY00005.
OWSLEY00009.
OWSLEY00010.
OWSLEY00011.
OWSLEY00013.
OWSLEY00015.
OWSLEY00017.
OWSLEY00018.
OWSLEY00019.
OWSLEY00020.
OWSLEY00022.
OWSLEY00023.
OWSLEY00025.
OWSLEY00027.
OWSLEY00029.
OWSLEY00030.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 79 of 94

OWSLEY00031.
OWSLEY00032.
OWSLEY00033.
OWSLEY00034.
OWSLEY00035.
OWSLEY00037.
OWSLEY00050.
PRESTAMOS- 00225662.
PRESTAMOS-00022189.
PRESTAMOS-00022190.
PRESTAMOS-00022191.
PRESTAMOS-00022192.
PRESTAMOS-00022198.
PRESTAMOS-00022201.
PRESTAMOS-00022203.
PRESTAMOS-00022204.
PRESTAMOS-00022205.
PRESTAMOS-00022210.
PRESTAMOS-00022211.
PRESTAMOS-00022217.
PRESTAMOS-00022223.
PRESTAMOS-00041585.
PRESTAMOS-00041586.
PRESTAMOS-00041587.
PRESTAMOS-00041593.
PRESTAMOS-00041596.
PRESTAMOS-00041598.
PRESTAMOS-00041599.
PRESTAMOS-00041600.
PRESTAMOS-00041605.
PRESTAMOS-00041606.
PRESTAMOS-00041608.
PRESTAMOS-00041610.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 80 of 94

PRESTAMOS-00041611.
PRESTAMOS-00452370.
PRESTAMOS-00065068.
PRESTAMOS-00065069.
PRESTAMOS-00065070.
PRESTAMOS-00065076.
PRESTAMOS-00065079.
PRESTAMOS-00065081.
PRESTAMOS-00065082.
PRESTAMOS-00065083.
PRESTAMOS-00065088.
PRESTAMOS-00065089.
PRESTAMOS-00065119.
PRESTAMOS-00110078.
PRESTAMOS-00110079.
PRESTAMOS-00110080.
PRESTAMOS-00110081.
PRESTAMOS-00110082.
PRESTAMOS-00110083.
PRESTAMOS-00110084.
PRESTAMOS-00110085.
PRESTAMOS-00110086.
PRESTAMOS-00110087.
PRESTAMOS-00110088.
PRESTAMOS-00110089.
PRESTAMOS-00110090.
PRESTAMOS-00110091.
PRESTAMOS-00110092.
PRESTAMOS-00110093.
PRESTAMOS-00110094.
PRESTAMOS-00110095.
PRESTAMOS-00110096.
PRESTAMOS-00110097.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 81 of 94

PRESTAMOS-00110099.
PRESTAMOS-00110105.
PRESTAMOS-00110108.
PRESTAMOS-00110110.
PRESTAMOS-00110111.
PRESTAMOS-00110112.
PRESTAMOS-00110117.
PRESTAMOS-00110118.
PRESTAMOS-00110119.
PRESTAMOS-00110132.
PRESTAMOS-00110142.
PRESTAMOS-00110143.
PRESTAMOS-00110144.
PRESTAMOS-00117842.
PRESTAMOS-00117843.
PRESTAMOS-00117844.
PRESTAMOS-00117850.
PRESTAMOS-00117853.
PRESTAMOS-00117855.
PRESTAMOS-00117856.
PRESTAMOS-00117857.
PRESTAMOS-00117862.
PRESTAMOS-00117863.
PRESTAMOS-00117864.
PRESTAMOS-00117865.
PRESTAMOS-00117867.
PRESTAMOS-00117868.
PRESTAMOS-00117870.
PRESTAMOS-00117871.
PRESTAMOS-00120451.
PRESTAMOS-00120452.
PRESTAMOS-00120453.
PRESTAMOS-00120459.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 82 of 94

PRESTAMOS-00120462.
PRESTAMOS-00120464.
PRESTAMOS-00120465.
PRESTAMOS-00120466.
PRESTAMOS-00120471.
PRESTAMOS-00120472.
PRESTAMOS-00120473.
PRESTAMOS-00120480.
PRESTAMOS-00186480.
PRESTAMOS-00186481.
PRESTAMOS-00186482.
PRESTAMOS-00186483.
PRESTAMOS-00186484.
PRESTAMOS-00186486.
PRESTAMOS-00186489.
PRESTAMOS-00186495.
PRESTAMOS-00186500.
PRESTAMOS-00186501.
PRESTAMOS-00186507.
PRESTAMOS-00186510.
PRESTAMOS-00186512.
PRESTAMOS-00186513.
PRESTAMOS-00186514.
PRESTAMOS-00186519.
PRESTAMOS-00186520.
PRESTAMOS-00186521.
PRESTAMOS-00186525.
PRESTAMOS-00186529.
PRESTAMOS-00186530.
PRESTAMOS-00190085.
PRESTAMOS-00190086.
PRESTAMOS-00190087.
PRESTAMOS-00190093.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 83 of 94

PRESTAMOS-00190096.
PRESTAMOS-00190098.
PRESTAMOS-00190099.
PRESTAMOS-00190100.
PRESTAMOS-00190105.
PRESTAMOS-00190106.
PRESTAMOS-00190107.
PRESTAMOS-00196260.
PRESTAMOS-00196261.
PRESTAMOS-00196262.
PRESTAMOS-00196263.
PRESTAMOS-00196264.
PRESTAMOS-00196265.
PRESTAMOS-00196266.
PRESTAMOS-00196267.
PRESTAMOS-00196268.
PRESTAMOS-00196269.
PRESTAMOS-00196270.
PRESTAMOS-00196271.
PRESTAMOS-00196272.
PRESTAMOS-00196273.
PRESTAMOS-00196274.
PRESTAMOS-00196275.
PRESTAMOS-00196276.
PRESTAMOS-00196277.
PRESTAMOS-00196278.
PRESTAMOS-00196279.
PRESTAMOS-00196280.
PRESTAMOS-00196281.
PRESTAMOS-00196282.
PRESTAMOS-00196283.
PRESTAMOS-00196284.
PRESTAMOS-00196285.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 84 of 94

PRESTAMOS-00196286.
PRESTAMOS-00196292.
PRESTAMOS-00196295.
PRESTAMOS-00196297.
PRESTAMOS-00196298.
PRESTAMOS-00196299.
PRESTAMOS-00196304.
PRESTAMOS-00196305.
PRESTAMOS-00196306.
PRESTAMOS-00196307.
PRESTAMOS-00196308.
PRESTAMOS-00196309.
PRESTAMOS-00196310.
PRESTAMOS-00196311.
PRESTAMOS-00196312.
PRESTAMOS-00196314.
PRESTAMOS-00196317.
PRESTAMOS-00196318.
PRESTAMOS-00225648.
PRESTAMOS-00225649.
PRESTAMOS-00225650.
PRESTAMOS-00225656.
PRESTAMOS-00225659.
PRESTAMOS-00225661-
PRESTAMOS-00225662.
PRESTAMOS-00225663.
PRESTAMOS-00225668.
PRESTAMOS-00225669.
PRESTAMOS-00225691.
PRESTAMOS-00225695.
PRESTAMOS-00225696.
PRESTAMOS-00225697.
PRESTAMOS-00225698.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 85 of 94

PRESTAMOS-00225699.
PRESTAMOS-00225700.
PRESTAMOS-00225701.
PRESTAMOS-00225702.
PRESTAMOS-00225703.
PRESTAMOS-00225704.
PRESTAMOS-00225705.
PRESTAMOS-00225706.
PRESTAMOS-00225707.
PRESTAMOS-00245179.
PRESTAMOS-00245180.
PRESTAMOS-00245181.
PRESTAMOS-00245194.
PRESTAMOS-00245200.
PRESTAMOS-00245203.
PRESTAMOS-00245205.
PRESTAMOS-00245206.
PRESTAMOS-00245207.
PRESTAMOS-00245212.
PRESTAMOS-00245213.
PRESTAMOS-00245221.
PRESTAMOS-00245234.
PRESTAMOS-00245236.
PRESTAMOS-00245243.
PRESTAMOS-00245248.
PRESTAMOS-00245256.
PRESTAMOS-00296818.
PRESTAMOS-00300502.
PRESTAMOS-00307027.
PRESTAMOS-00308593.
PRESTAMOS-00308594.
PRESTAMOS-00308595.
PRESTAMOS-00308596.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 86 of 94

PRESTAMOS-00308597.
PRESTAMOS-00308603.
PRESTAMOS-00308606.
PRESTAMOS-00308608.
PRESTAMOS-00308609.
PRESTAMOS-00308610.
PRESTAMOS-00308615.
PRESTAMOS-00308616.
PRESTAMOS-00308619.
PRESTAMOS-00316584.
PRESTAMOS-00316585.
PRESTAMOS-00316586.
PRESTAMOS-00316587.
PRESTAMOS-00316588.
PRESTAMOS-00316589.
PRESTAMOS-00316590.
PRESTAMOS-00316591.
PRESTAMOS-00316592.
PRESTAMOS-00316593.
PRESTAMOS-00316594.
PRESTAMOS-00316595.
PRESTAMOS-00316597.
PRESTAMOS-00316603.
PRESTAMOS-00316606.
PRESTAMOS-00316608.
PRESTAMOS-00316609.
PRESTAMOS-00316610.
PRESTAMOS-00316615.
PRESTAMOS-00316616.
PRESTAMOS-00316617.
PRESTAMOS-00316618.
PRESTAMOS-00316619.
PRESTAMOS-00316620.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 87 of 94

PRESTAMOS-00316621.
PRESTAMOS-00316629.
PRESTAMOS-00316637.
PRESTAMOS-00316648.
PRESTAMOS-00316659.
PRESTAMOS-00316662.
PRESTAMOS-00327372.
PRESTAMOS-00327373.
PRESTAMOS-00327385.
PRESTAMOS-00327391.
PRESTAMOS-00327394.
PRESTAMOS-00327396.
PRESTAMOS-00327397.
PRESTAMOS-00327398.
PRESTAMOS-00327403.
PRESTAMOS-00327404.
PRESTAMOS-00327416.
PRESTAMOS-00327417.
PRESTAMOS-00327419.
PRESTAMOS-00327423.
PRESTAMOS-00327428.
PRESTAMOS-00327434.
PRESTAMOS-00327439.
PRESTAMOS-00327444.
PRESTAMOS-00396800.
PRESTAMOS-00396801.
PRESTAMOS-00396802.
PRESTAMOS-00396803.
PRESTAMOS-00396809.
PRESTAMOS-00396812.
PRESTAMOS-00396814.
PRESTAMOS-00396815.
PRESTAMOS-00396816.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 88 of 94

PRESTAMOS-00396821.
PRESTAMOS-00396822.
PRESTAMOS-00396833.
PRESTAMOS-00396842.
PRESTAMOS-00396851.
PRESTAMOS-00422663.
PRESTAMOS-00422664.
PRESTAMOS-00422665.
PRESTAMOS-00422666.
PRESTAMOS-00422667.
PRESTAMOS-00422668.
PRESTAMOS-00422669.
PRESTAMOS-00422670.
PRESTAMOS-00422671.
PRESTAMOS-00422672.
PRESTAMOS-00422673.
PRESTAMOS-00422675.
PRESTAMOS-00422678.
PRESTAMOS-00422679.
PRESTAMOS-00422681.
PRESTAMOS-00422684.
PRESTAMOS-00422690.
PRESTAMOS-00422695.
PRESTAMOS-00422696.
PRESTAMOS-00422698.
PRESTAMOS-00422699.
PRESTAMOS-00422700.
PRESTAMOS-00422706.
PRESTAMOS-00422710.
PRESTAMOS-00422711.
PRESTAMOS-00422713.
PRESTAMOS-00422714.
PRESTAMOS-00422715.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 89 of 94

PRESTAMOS-00422716.
PRESTAMOS-00422718.
PRESTAMOS-00422719.
PRESTAMOS-00422720.
PRESTAMOS-00422721.
PRESTAMOS-00422722.
PRESTAMOS-00422724.
PRESTAMOS-00422727.
PRESTAMOS-00422733.
PRESTAMOS-00422738.
PRESTAMOS-00422739.
PRESTAMOS-00422740.
PRESTAMOS-00422751.
PRESTAMOS-00422760.
PRESTAMOS-00422769.
PRESTAMOS-00422772.
PRESTAMOS-00422773.
PRESTAMOS-00422774.
PRESTAMOS-00422775.
PRESTAMOS-00422776.
PRESTAMOS-00422777.
PRESTAMOS-00422778.
PRESTAMOS-00422779.
PRESTAMOS-00422781.
PRESTAMOS-00422784.
PRESTAMOS-00422790.
PRESTAMOS-00422795.
PRESTAMOS-00422796.
PRESTAMOS-00422797.
PRESTAMOS-00422799.
PRESTAMOS-00422801.
PRESTAMOS-00422811.
PRESTAMOS-00422821.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 90 of 94

PRESTAMOS-00446474.
PRESTAMOS-00446475.
PRESTAMOS-00446476.
PRESTAMOS-00446482.
PRESTAMOS-00446485.
PRESTAMOS-00446487.
PRESTAMOS-00446488.
PRESTAMOS-00446489.
PRESTAMOS-00446494.
PRESTAMOS-00446495.
PRESTAMOS-00446497.
PRESTAMOS-00446499.
PRESTAMOS-00446509.
PRESTAMOS-00446519.
PRESTAMOS-00451790.
PRESTAMOS-00451791.
PRESTAMOS-00451792.
PRESTAMOS-00451795.
PRESTAMOS-00451796.
PRESTAMOS-00451797.
PRESTAMOS-00451798.
PRESTAMOS-00451800.
PRESTAMOS-00451803.
PRESTAMOS-00451806.
PRESTAMOS-00451809.
PRESTAMOS-00451812.
PRESTAMOS-00451815.
PRESTAMOS-00451816.
PRESTAMOS-00451818.
PRESTAMOS-00451821.
PRESTAMOS-00451827.
PRESTAMOS-00451832.
PRESTAMOS-00451833.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 91 of 94

PRESTAMOS-00451839.
PRESTAMOS-00451840.
PRESTAMOS-00451842.
PRESTAMOS-00451843.
PRESTAMOS-00451849.
PRESTAMOS-00451850.
PRESTAMOS-00451851.
PRESTAMOS-00451852.
PRESTAMOS-00451858.
PRESTAMOS-00451861.
PRESTAMOS-00451864.
PRESTAMOS-00451867.
PRESTAMOS-00451870.
PRESTAMOS-00451873.
PRESTAMOS-00451883.
PRESTAMOS-00451895.
PRESTAMOS-00451911.
PRESTAMOS-00451912.
PRESTAMOS-00451913.
PRESTAMOS-00451957.
PRESTAMOS-00451960.
PRESTAMOS-00451961.
PRESTAMOS-00451963.
PRESTAMOS-00451966.
PRESTAMOS-00451972.
PRESTAMOS-00451977.
PRESTAMOS-00451978.
PRESTAMOS-00451984.
PRESTAMOS-00451986.
PRESTAMOS-00451987.
PRESTAMOS-00451988.
PRESTAMOS-00451994.
PRESTAMOS-00452001.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 92 of 94

PRESTAMOS-00452003.
PRESTAMOS-00452019.
PRESTAMOS-00452274.
PRESTAMOS-00452275.
PRESTAMOS-00452293.
PRESTAMOS-00452294.
PRESTAMOS-00452303.
PRESTAMOS-00452315.
PRESTAMOS-00452317.
PRESTAMOS-00452326.
PRESTAMOS-00452336.
PRESTAMOS-00452337.
PRESTAMOS-00452340.
PRESTAMOS-00452341.
PRESTAMOS-00452342.
PRESTAMOS-00452343.
PRESTAMOS-00452350.
PRESTAMOS-00452353.
PRESTAMOS-00452354.
PRESTAMOS-00452360.
PRESTAMOS-00452362.
PRESTAMOS-00452367.
PRESTAMOS-00452368.
PRESTAMOS-00452369.
PRONSKY00001.
PRONSKY00012.
PRONSKY00013.
PRONSKY00015.
PRONSKY00017.
PRONSKY00019.
PRONSKY00020.
PRONSKY00022.
PRONSKY00035.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 93 of 94

PRONSKY00036.
PRONSKY00037.
PRONSKY00038.
PRONSKY00039.
PRONSKY00040.
PRONSKY00041.
PRONSKY00042.
PRONSKY00044.
STALNAKER000001.
TOWNSEND00001.
TOWNSEND00002.
TOWNSEND00003.
TOWNSEND00004.
TOWNSEND00017.
TOWNSEND00018.
TOWNSEND00019.
TOWNSEND00020.
TOWNSEND00021.
TOWNSEND00024.
TOWNSEND00025.
TOWNSEND00026.
TOWNSEND00027.
TOWNSEND00028.
WELLSFAR-00000082.
Confidential and Privileged
B-1
Case 5:21-cv-04337-JMG Document 142-21 Filed 10/04/24 Page 94 of 94

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Exhibit 16 Swain Report — Marshall v. Prestamos CDFI, LLC (Dkt. 142-21, E.D. Pa. No. 5:21-cv-04337)

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