Supplement — Marshall v. Prestamos CDFI, LLC (Dkt. 157-2, E.D. Pa. No. 5:21-cv-04337)

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U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 157-2 · 2025-05-07 · Docket on CourtListener

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IN THE UNITED STATES DISTRICT COURT 
FOR THE EASTERN DISTRICT OF PENNSYLVANIA 
 
ALICIA MARSHALL, et al.,  
 
Plaintiffs, 
 
v. 
 
PRESTAMOS CDFI, LLC, 
 
 
Defendant. 
 
 
 
 
 
Case No. 5:21-cv-04337-JMG 
 
DEFENDANT’S STATEMENT OF UNDISPUTED MATERIAL FACTS 
Defendant Prestamos CDFI, LLC (“Defendant” or “Prestamos”), by and through its 
attorneys, Ballard Spahr LLP, provides the following Statement of Undisputed Material Facts in 
Support of its Motion for Summary Judgment:   
A. 
The PPP Regulations 
1. 
Self-employed persons were eligible for a PPP loan under the Coronavirus Aid, 
Relief, and Economic Security Act (“CARES Act”) if, among other things, they were operating 
businesses on February 15, 2020, had self-employment income, filed an IRS Form 1040 
Schedule C (“Schedule C”), and submitted documentation demonstrating the same.  86 FR 3692, 
3695–96 (Jan. 14, 2021). 
2. 
Borrowers were required to certify in their applications “that the information 
provided in this application and the information provided in all supporting documents and forms 
is true and accurate in all material respects.”  Id. at 3706; see also Ex. 1, Def_Appx_003.1 
                                                 
1  
All references to “Ex.” are to the exhibits annexed to the Appendix, and include citations to 
Bates numbers (with prefix “Def_Appx”) pursuant to the Court’s Policies and Procedures.  
Exhibits 1–9 are in Volume 1 of the Appendix.  Exhibits 10–17 are in Volume 2.   
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3. 
After a lender and the SBA approved a borrower’s application, the SBA would 
issue an SBA Loan Number.  The regulations then required a lender to “disburse” the PPP loan 
funds to the borrower within a prescribed timeframe but provided that “lenders are not 
responsible for delays in disbursement attributable to a borrower’s failure to timely provide 
required Loan Documentation[.]”  86 FR at 3710.    
4. 
The Federal Reserve maintained a credit facility from which PPP lenders could 
borrow funds to issue PPP loans.  Ex. 5, Def_Appx_0030, ¶ 21.  
5. 
Prestamos utilized credit advances from this facility.  Id., Def_Appx_0031, ¶ 28. 
6. 
The regulations did not require a lender to ensure that a borrower received and 
was able to draw upon the PPP loan funds.  See 86 FR 3692.   
7. 
Rules that govern fund transfers, namely the National Automated Clearinghouse 
Association Operating Rules (the “Nacha Rules”), prevent a lender from accomplishing this 
result even if it wanted to because once the lender (known as the Originating Depository 
Financial Institution or “ODFI”) initiates an Automated Clearinghouse (“ACH”) transfer, the 
borrower’s bank (known as the Receiving Depository Financial Institution or “RDFI”) takes total 
control of the ultimate disposition of the transfer.  See Ex. 2, Def_Appx_007, ¶¶ 4–6 (identifying 
familiarity with and purpose of Nacha Rules); id., Def_Appx_0010 (“An RDFI may return 
Entries for any reason, except as otherwise provided in Article Three”).   
8. 
Plaintiffs’ own SBA “experts,” both of whom held top-level SBA positions that 
included management of the PPP, conceded that it was impossible for a lender to force a 
borrower’s bank to accept a disbursement of funds.  Ex. 3, Def_Appx_0017, 90:20–23 (“You, as 
Prestamos . . . cannot force a bank to take money.”); Ex. 4, Def_Appx_0022–23, 86:6–87:9, 
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Def_Appx_0025–26, 96:24–97:10 (agreeing that lender could not force bank to accept disbursed 
funds, and could only “try and rectify the situation”).   
B. 
The PPP Loans at Issue  
9. 
Each Plaintiff executed a promissory note (the “Note”) and provided the Note and 
related documents to Prestamos (collectively, the “Loan Documents”), including an account 
number at the borrower’s bank so Prestamos would know where to disburse the funds.  Pls.’ 
App. in Supp. of Pls.’ Mot. for Class Cert. (“Pls.’ App’x”), Exs. 1–10, ECF Nos. 139-2–139-11.   
10. 
In the account certification portion of the Loan Documents, the borrower 
“certif[ied] that the account information provided below is true and accurate in all material 
respects.”  ECF 108 at 117 (Third Amended Complaint, Ex. A). 
11. 
Prestamos disbursed the approved amount of PPP funds to each Plaintiff at his or 
her designated bank account, but as shown below each Plaintiff’s bank returned the funds.   
Plaintiff 
Date 
Returned 
ACH 
Return 
Code 
ACH Return Code Official Title 
Bradley Smith, Sharon 
6/11/2021 
R03 
No Account/Unable to Locate Account 
Henderson, Kristina 
5/13/2021 
R03 
No Account/Unable to Locate Account 
Horne, Jahbrael 
6/7/2021 
R03 
No Account/Unable to Locate Account 
Johnson, Alyshia 
6/2/2021 
R16 
Account Frozen 
Jones, Jamie 
6/20/2021 
R23 
Credit Entry Refused by Receiver 
Marshall, Alicia 
5/13/2021 
R23 
Credit Entry Refused by Receiver 
Martin, John 
5/26/2021 
R17 
File Record Edit Criteria 
Marvel, Lametria 
5/28/2021 
R23 
Credit Entry Refused by Receiver 
Townsend, Paris 
6/16/2021 
R23 
Credit Entry Refused by Receiver 
 
Ex. 6, Def_Appx_0041. 
12. 
Gregory Lloyd’s designated financial institution accepted the disbursement of 
funds (via ACH transfer), but did not let Mr. Lloyd access the funds for over a year based on 
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suspected fraud.  Ex. 13, Def_Appx_0327.  After a year, the financial institution, Capital One, 
moved the funds into an escrow account and, ultimately, returned the funds to Prestamos.  Id.   
13. 
The SBA and the U.S. Secret Service issued guidance authorizing borrowers’ 
banks (i.e., the Receiving Depository Financial Institutions (“RDFIs”)) to return to the lender any 
PPP disbursements that the RDFI believed “w[ere] initiated due to fraud.”  Ex. 7, 
Def_Appx_0042–43. 
14. 
The guidance directed RDFIs to use certain ACH return codes for suspicious PPP 
activity.  Id.   
15. 
RDFIs that accepted disbursements of PPP funds for borrowers they suspected 
were ineligible sometimes contacted Prestamos and the SBA seeking to return these funds.  Ex. 
8, Def_Appx_0049–50; see also, e.g., Ex. 9, Def_Appx_0085–176.   
16. 
In such instances, the SBA required that Prestamos take prompt action to 
“investigat[e] the potential fraud on these loans,” and “take action immediately to recover on 
these loans.”  Ex. 7, Def_Appx_0048; see also Ex. 10, Def_Appx_0177  (email from SBA to 
Prestamos identifying fraudulent PPP loan disbursed from Prestamos to a Citizens’ Bank account 
and directing Prestamos to “work with Citizens to have those funds returned.”). 
17. 
If fraud was flagged, SBA directed Prestamos as follows:  “[p]lease DO NOT 
disburse these funds until the investigation has been completed.”  Ex. 11, Def_Appx_0179.   
18. 
When a borrower’s bank returned a disbursement of PPP funds, Prestamos 
worked with its loan service provider to conduct enhanced due diligence on the borrower’s loan 
file by requesting additional document(s) from the borrower to confirm eligibility, including a 
full federal tax return from 2019 or 2020.  Ex. 16, Def_Appx_0429; Ex. 5, Def_Appx_0033–34, 
¶¶ 39–45.   
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19. 
Each of the 10 named Plaintiffs submitted incomplete and/or inaccurate 
documents, or documents that confirmed Plaintiff’s ineligibility for a PPP loan.  Ex. 12, 
Def_Appx_0181–85.   
20. 
Prestamos subsequently canceled Plaintiffs’ loans.  Ex. 5, Def_Appx_0034, ¶ 47. 
21. 
In September 2021—before Plaintiffs filed this case—Prestamos returned the 
credit advances from the Federal Reserve for Plaintiffs’ loans to the federal government.  Id., 
Def_Appx_0035, ¶ 51. 
 
 
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Dated: May 7, 2025 
Respectfully submitted, 
BALLARD SPAHR LLP 
By: /s/ Marcel S. Pratt 
Marcel S. Pratt (Pa. ID 307483) 
Edward D. Rogers (Pa. ID 69337) 
Thomas J. Gallagher IV (Pa. ID 316269) 
J. Chesley Burruss (Pa. ID 331521) 
Travis W. Watson (Pa. ID 330753) 
1735 Market Street, 51st Floor 
Philadelphia, PA  19103 
T: 215-665-8500 
prattm@ballardspahr.com 
rogerse@ballardspahr.com 
gallaghert@ballardspahr.com  
burrussc@ballardspahr.com 
watsontw@ballardspahr.com 
 
 
 
 
 
 
Counsel for Defendants 
 
HERRERA ARELLANO LLP 
Roy Herrera (admitted pro hac vice) 
Daniel A. Arellano (admitted pro hac vice) 
Jillian Andrews (admitted pro hac vice) 
Austin T. Marshall (admitted pro hac vice) 
Jane Ahern (admitted pro hac vice) 
1001 North Central Avenue, Suite 404 
Phoenix, AZ  85004 
T: 602-567-4820 
Roy@ha-firm.com 
Daniel@ha-firm.com 
Jillian@ha-firm.com 
Austin@ha-firm.com 
Jane@ha-firm.com 
 
Beatriz Aguirre (admitted pro hac vice) 
600 Pennsylvania Avenue, Suite 300 
Washington, DC 20003 
T: 202-798-6488 
Beatriz@ha-firm.com 
 
 
 
 
 
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