Plaintiffs' Response to Defendant's Statement of Undisputed Material Facts — Marshall v. Prestamos CDFI, LLC (Dkt. 163-1, E.D. Pa. No. 5:21-cv-04337)

Record facts

U.S. District Court for the Eastern District of Pennsylvania · No. 5:21-cv-04337-JMG · Doc. 163-1 · 2025-05-21 · 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. 
 
 
 
Civil Action No. 5:21-cv-04337-JMG 
 
 
 
 
 
 
PLAINTIFFS’ RESPONSE TO DEFENDANT’S  
STATEMENT OF UNDISPUTED MATERIAL FACTS  
 
Plaintiffs1 by and through their attorneys, Bailey & Glasser, LLP and Whiteman 
Osterman & Hanna LLP, respectfully submit this in response to Defendant Prestamos’ Statement 
of Undisputed Material Facts (ECF No. 157-2). 
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). 
Plaintiffs’ Response:  Undisputed. 
2. 
Borrowers were required to certify in their applications “that the information 
 
1  
Unless otherwise noted, all capitalized terms have the meaning set forth in the Table of 
Abbreviations in Plaintiffs’ accompanying brief in opposition to Defendant’s motion for 
summary judgment; all emphasis is added; all references to Ex. __ are to Plas Appx; and all 
internal quotations and citations are omitted. 
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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. 
Plaintiffs’ Response: Undisputed. 
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. 
Plaintiffs’ Response: Undisputed 
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. 
Plaintiffs’ Response: Undisputed. 
5. 
Prestamos utilized credit advances from this facility. Id., Def_Appx_0031, ¶ 28. 
Plaintiffs’ Response: Undisputed. 
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. 
Plaintiffs’ Response: Admitted in part, disputed in part. It is admitted that the regulations 
did not require the lender to be a guarantor that the borrower received and was able to draw on 
the PPP loan funds. But those regulations and Prestamos’ own obligations under the parties’ 
Loan Documents required Prestamos to take commercially reasonable steps to send the loan 
funds to the borrower. In addition, according to the Information and Bank Account Certification 
and Authorization form included as part of the parties’ Loan Documents here (see, e.g., ECF No. 
108 at 117), Prestamos was also required to “confirm[]the ownership and active status of the 
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depository account at the Financial Institution listed as required in the documents submitted to 
the SBA for PPP loan approval.”   
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”). 
Plaintiffs’ Response: Immaterial. Also disputed in part and to the extent that this 
paragraph contains legal arguments and conclusions relating to Nacha Rules and does not 
constitute a fact. 
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, 
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”). 
Plaintiffs’ Response: Admitted in part, disputed in part. It is admitted that Plaintiffs’ 
experts in part so testified. But PPP regulations and Prestamos’ own obligations under the 
parties’ Loan Documents required Prestamos to take commercially reasonable steps to send the 
loan funds to the borrower. In addition, according to the Information and Bank Account 
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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. 
Plaintiffs’ Response:  Admitted in part, disputed in part. It is admitted that Prestamos 
made a single attempt to disburse via ACH the PPP loans to plaintiffs Jones, Marshall, Marvel 
and Townsend. It is disputed that Prestamos disbursed via ACH or otherwise the PPP loans to 
plaintiffs Smith, Henderson and Horne because according to Prestamos’ own cited evidence the 
accounts were unable to be located; to plaintiff Johnson because her account was frozen; to 
plaintiffs Jones, Marshall, Marvel and Townsend because the credit entry was refused; and to 
plaintiff Martin because the funds also were returned (in plaintiff Martin’s case, because this was 
a personal account as discussed more fully in ¶ 40 below).  
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 
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. 
Plaintiffs’ Response:  Admitted in part, disputed in part. Admitted only that plaintiff 
Lloyd’s designated financial institution, Capital One, accepted the PPP loan ACH from 
Prestamos. The rest of this paragraph is disputed. Plaintiff Lloyd was told by Capital One that it 
“froze” many other PPP loans designated to a personal bank account. Pla Appx 3405 (“The 
words from the Capital One agent at the time were anybody that had a PPP loan that had a 
personal bank account that wasn’t from Capital One were frozen.”).    
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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. 
Plaintiffs’ Response: Immaterial and disputed. Disputed that Prestamos’ Exhibit 7 
establishes that the U.S. Secret Service “authoriz[ed]” RDFIs to return to the lender any PPP 
disbursements.  The guidance only suggests that an RDFI “select the Return Reason Code that 
most closely approximates the reason for the return.”  Ex. 7, Def_Appx_0042–43.  The guidance 
contained within Exhibit 7 does not authorize an RDFI to return to the lender any PPP 
disbursements due to fraud or otherwise or otherwise address the PPP.  Id.  
14. 
The guidance directed RDFIs to use certain ACH return codes for suspicious PPP 
activity. Id. 
Plaintiffs’ Response:  Immaterial and disputed. Disputed that the guidance in Prestamos’ 
Exhibit 7 “directed” the use of certain ACH codes since the guidance only states that an RDFI 
“should select the Return Reason Code that most closely approximates the reason for the return” 
and contains some examples that “may be acceptable options”.  Def_Appx_0042 (emphasis 
supplied).  The guidance further does not state that an RDFI can only use those codes if fraud is 
suspected. 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. 
Plaintiffs’ Response: Undisputed. 
16. 
In such instances, the SBA required that Prestamos take prompt action to 
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“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.”). 
Plaintiffs’ Response: Immaterial and disputed. Disputed that the email communication 
from the SBA Def_Appx_0048 applies to any “instances” beyond the loans specifically 
referenced in that email as that email makes clear it refers only to “these loans” in particular.   
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. 
Plaintiffs’ Response: Immaterial and disputed. Disputed that this communication applies 
to any loans beyond the particular loan at issue in the email.  Ex. 11, Def_Appx_0179.  Further, 
this communication has no application to Plaintiffs’ loans, which were falsely reported by 
Prestamos as disbursed in contrast to the status of the subject loan in Prestamos’ Ex. 11, which 
was reported as “Active-un-disbursed”.  Id.  The subject loan is also distinguishable from 
Plaintiffs’ loans as it was also reported to the SBA as a potentially fraudulent loan, and not 
merely “flagged” by Prestamos or its LSP Blueacorn.  Id.  
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. 
Plaintiffs’ Response: Immaterial and disputed. Prestamos’ Exhibit 16 confirms that 
Blueacorn’s enhanced due diligence process referred to above was not even in place until June 
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11, 2021.  Ex. 16, Def_Appx_0429. Moreover, neither Prestamos’ Exhibit 5 nor Exhibit 16 
support the statement that “Prestamos worked with its loan service provider to conduct enhanced 
due diligence.”  Ex. 16, Def_Appx_0429; Ex. 5, Def_Appx_0033–34, ¶¶ 39–45.  In fact, the 
Castillo Declaration (Ex. 5) states that Blueacorn performed the due diligence process referred to 
above. Ex. 5, Def_Appx_0033–34, ¶ 40 (“Blueacorn committed to perform this enhanced due 
diligence, which included the close examination of the borrower’s file . . .”); ¶ 42 (“Blueacorn 
committed to manually review the entire loan file and looked for any evidence of fraud or other 
suspicious activity. During the manual review, Blueacorn could potentially identify a separate 
reason, aside from that identified by the ACH return code, that the loan should not be funded. 
Blueacorn could follow up with the borrower about these later-identified issues.”). Prestamos 
provides no evidence regarding how it allegedly worked with Blueacorn to conduct any such 
alleged enhanced due diligence or even knew what or how Blueacorn actually performed any 
such alleged due diligence. Ex. 5, Def_Appx_0033–34, ¶¶ 39–45. Additionally, the Castillo 
Declaration concedes that the due diligence process was, contrary to Exhibit 16 and Prestamos’ 
assertions, not uniform. Ex. 5, Def_Appx_0033–34, ¶ 40 (“Prestamos understands that the 
precise steps taken during the enhanced due diligence process were not uniform, but varied 
depending on the ACH return code or any other specific issue identified as causing the failed 
deposit.”).  
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. 
Plaintiffs’ Response: Immaterial and disputed. Disputed that any portion of Exhibit 12 
supports the conclusion that Plaintiffs were ineligible for their PPP loans.  Ex. 12, 
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Def_Appx_0181–85. All Plaintiffs were approved for their PPP loans by the SBA and received 
SBA loan numbers. Prestamos’ own position is that it funded or attempted to fund each 
Plaintiff’s PPP loan. In addition, pursuant to 85 F.R. 20813, qualified “payroll costs” for sole 
proprietors and independent contractors included “wages, commissions, income, or net earnings 
from self-employment, or similar compensation.” In other words, PPP loans for sole proprietors 
and independent contractors, unlike other traditional businesses, were designed to replace those 
individuals’ own income.  See id.  Here, Prestamos “targeted sole proprietors and independent 
contractors who qualify for PPP loans and that for the most part do not have separate bank 
account.”  28 at Pla Appx 3430 (PRESTAMOS-00304371).  Further, Prestamos was well aware 
of the practical difference between sole proprietors and independent contractors and other more 
traditional PPP loan borrowers.  Id. (“Oftentimes these individuals get paid by one business like 
an employee but are independent contractors that receive a 1099 at year end. Additionally, many 
independent contractors have a full time job and freelance on the side, a part time uber driver for 
example.”).  Notwithstanding their unique nature, Prestamos understood that sole proprietor and 
independent contractors were eligible for PPP loans.  Exs. 31 and 20 at Pla Appx 3389 Martinez 
Depo. 37:6-8. Also, Prestamos is incorrect that Plaintiffs failed to provide complete and accurate 
information. For example, Prestamos contends that plaintiff Martin’s documents were 
incomplete because “Borrower submitted federal tax return for 2019 ‘PREVIEW COPY DO 
NOT FILE.’ Borrower also submitted a state tax return for 2020.” Def__Appx__ 0182. The 
evidence is that plaintiff Martin submitted his full tax documents, including a complete Schedule 
C and tax return, with his PPP loan application.  Pla Appx 3409 at¶ 8. Prestamos’ own evidence 
also shows that plaintiff Martin also produced to Prestamos his full tax returns for 2018, 2019 
and 2020 and his tax transcript for 2021. Def__Appx__ 0387. 
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20. 
Prestamos subsequently canceled Plaintiffs’ loans. Ex. 5, Def_Appx_0034, ¶ 47. 
Plaintiffs’ Response: Disputed. Prestamos does not submit any evidence beyond the 
Castillo Declaration which does not say that it cancelled all Plaintiffs’ loans. Further, Plaintiffs 
dispute it cancelled Plaintiffs’ loans because Prestamos has attempted to collect loan balances 
from plaintiffs Lloyd, Johnson and Townsend. See ECF No. 139-20 at 3 (testimony on 
Prestamos’ cross-examination of plaintiff Lloyd that he filed and is maintaining this lawsuit “[t]o 
make sure that it is settled to the way that it should be so that I am not reported as defaulted with 
the SBA, to stop Prestamos coming after me to collect money on funds that I never received. 
Which is what you guys are doing.”); ECF No. 139-20 at 6 (accord; testimony of plaintiff 
Johnson that “I want to say I believe they did send something stating that they wanted to be 
repaid for the loan with interest.”); ECF No. 139-20 at 7 (accord; testimony of plaintiff 
Townsend that “Oh, because basically [Prestamos] sent me an E-mail asking me to repay money 
that I’ve never gotten back.”); see also ECF No. 108 ¶¶ 296-298 (quoting directly from 
Prestamos’ invoices to plaintiff Lloyd seeking repayment of $20,832.00 in principal plus 1% 
interest); ECF No. 155-1 Exhibit A attached thereto (containing Prestamos’ invoices and 
correspondence to plaintiff Lloyd). 
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. 
Plaintiffs’ Response:  Disputed. Paragraph 51 of Mr. Castillo’s declaration on which 
Prestamos exclusively relies and which is the only evidence it cites for this alleged fact does not 
say anything about the status of any of the credit advances Prestamos obtained to fund Plaintiffs’ 
loans. Ex. 5, Def_Appx_0034, ¶ 51. Instead, it ambiguously states in full only as follows: “In 
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September 2021, Prestamos returned the credit advances from the Federal Reserve for loans that 
were ultimately not funded.” When asked in deposition whether those credit advances that were 
returned to the Federal Reserve in September 2021 included the credit advances for Plaintiffs’ 
loans, Mr. Castillo testified at 81:24 “Probably, but I don’t recall.” Ex. 21 at Pla Appx 3393.  
 
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COUNTERSTATEMENT OF MATERIAL FACTS 
1. 
All Plaintiffs signed and returned their respective Loan Documents to Prestamos. 
Pla Appx Exs. 1 - 10.  
2. 
All of the Plaintiffs’ Loan Documents consist of the same form documents, 
including the Note, Additional and Correction Documents Agreement (Errors and Omissions 
Agreement), Business Purpose Statement, Notice - No Oral Agreements, Written Consent of 
Governing Body, IRS W-9 Request for Taxpayer Identification Number and Certification, and 
Information and Bank Account Certification and Authorization form. Id. 
3. 
The Notes identify each respective Plaintiff as the “Borrower” and Prestamos as 
the “Lender”. Id. See, e.g., Ex. 1 at Pla Appx 0002. 
4. 
The Notes specify the SBA-approved PPP loan number for, and amount of, each 
PPP loan. Id. 
5. 
The Notes provide that “[i]n return for the Loan, Borrower promises” to pay the 
principal plus “interest on the unpaid principal balance, and all other amounts required by this 
Note” back to Prestamos if not forgiven.  Id. 
6. 
The Additional Agreements state that, “[i]n consideration of Prestamos CDFI, 
LLC … making the above loan, each of the undersigned, jointly and severally, do hereby agree 
… ” and that Prestamos “is relying on this agreement in making the above loan ….”  Id. at Pl 
Appx 0008. 
7. 
The “Notice - No Oral Agreements” governs the “Loan by Lender, Prestamos 
CDFI, LLC to Borrower”; states that “THE WRITTEN LOAN AGREEMENT REPRESENTS 
THE FINAL AGREEMENT BETWEEN THE PARTIES …”; defines “Loan Agreement” to 
include the Notes and other Loan Documents; and was executed by both parties. Id. At Pla Appx 
0011 (original emphasis).  
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8. 
The Information and Bank Account Certification and Authorization form 
identifies where Prestamos should “deposit the loan proceeds[.]” Id. at Pla Appx 0014.  
9. 
The Information and Bank Account Certification and Authorization form also 
required Prestamos to “confirm[]the ownership and active status of the depository account at the 
Financial Institution listed as required in the documents submitted to the SBA for PPP loan 
approval.” Id. At Pla Appx 0014.  
10. 
Prestamos did not take commercially reasonable steps to fund Plaintiffs’ PPP 
loans, as the only evidence it provides is that it made an initial attempt to ACH the loans to 
Plaintiffs. 
11. 
Evidence shows that Prestamos was to fund other SBA approved PPP loans via 
prepaid cards who also could not get their loans funded by ACH. See  Pla Appx 3395.  
12. 
Prestamos provides no evidence regarding what steps it took, if any, to confirm 
the ownership and active account status of the accounts for plaintiffs Smith, Henderson and 
Horne who Prestamos claims had ACH return code of No Account/Unable to Locate Account; 
plaintiff Johnson who Prestamos claims had ACH return code Account Frozen; plaintiffs Jones, 
Marshall, Marvel and Townsend who Prestamos claims had ACH return code Credit Entry 
Refused by Receiver; and plaintiff Martin who Prestamos had ACH return code File Record Edit 
Criteria.     
13. 
Once Plaintiffs returned their signed Loan Documents, Prestamos was required to 
fund Plaintiffs’ Loans within ten days of the assignment of an SBA loan number.  85 Fed. Reg. 
26321 (May 4, 2020).  
14. 
Prestamos understood that the “loan closing date” for a PPP loan was “the date on 
which the borrower and lender sign the documents.”   Pla Appx 3386 (PRESTAMOS-00306968-
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PRESTAMOS-00306969); Pla Appx 3389 (Martinez Deposition 23:9-14) (“I will affirm that 
when we had a signed promissory note, we did move forward with sending information to The 
Fed.”).  
15. 
Plaintiffs reasonably believed that the bank account numbers they provided on 
their respective Information and Bank Account Certification and Authorization forms were 
accurate.  Pla Appx 3403 (Marshall Deposition 128:10-20);  Pla Appx 3403- Pla Appx 3404 
(Townsend Deposition 76:1-18);  Pla Appx 3404 (Henderson Deposition 80:11-12); Pla Appx 
3404 (Jones Deposition 51:4-12); Pla Appx 3404-3405 (Martin Deposition 84:15-21); Pla Appx 
3405-3406 (Lloyd Deposition 180:14-20); Pla Appx 3406 (Johnson Deposition 82:16-25, 83:1-
4); Pla Appx 3406-3407 (Marvel Deposition 58:8-21); Pla Appx 3407 (Horne Deposition 82:17-
23); Pla Appx 3407 (Smith Deposition 80:20-24, 81:1-11). 
16. 
Prestamos was required to file SBA Form 1502 reports that accurately represented 
the status of its PPP loans.  Ex. 11 at  Pla Appx 0134-3291 (SBA Form 1502s); Pla Appx 3392 
(Castillo Deposition at 38:23-25).  
17. 
The SBA instructions for filling out the SBA Form 1502 reports stated, “This 
form is to be completed monthly by lenders participating in the SBA’s 7(a) loan program in 
order to collect payment and loan information.” Ex. 11 at Pla Appx 0135 at 1.  
18. 
The information in the SBA Form 1502 had to be updated monthly throughout the 
life of a loan.  Id. See also Ex. 20 Pla Appx 3389 (Martinez Deposition 43:10-12); Ex. 21 Pla 
Appx 3392(Castillo Deposition 38:19-22). 
19. 
Prestamos falsely reported the status of Plaintiffs’ loans by filing SBA Form 1502 
reports that misrepresented that Plaintiffs’ Loans had been funded, even though they had not 
been funded. See  Pla Appx 0134-3291 (Prestamos’ Form 1502s on Plaintiffs’ loans); Pla Appx 
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3375 (Castillo Decl.) at ¶ 31 (“The ‘loan status’ section of SBA Form 1502 needed to be filled 
out as ‘Funded,’ ‘Undisbursed,’ or ‘Cancelled.’ Prestamos used ‘Funded’ in order to initiate the 
credit advance from the Federal Reserve.”). 
20. 
Based on these false certifications in its SBA Form 1502s, Prestamos collected 
loan processing fees for each of Plaintiffs’ loans despite the fact that the loans had not been 
funded. Pla Appx 0134-3291 (Prestamos’ Form 1502s on Plaintiffs’ loans); Pla Appx 3393 
(Castillo Deposition at 92:22-93:3). 
21. 
Prestamos was not entitled to keep loan processing fees for loans which it 
ultimately did not fund. Pla Appx 0134-3291 (Prestamos’ Form 1502s on Plaintiffs’ loans); Pla 
Appx 3393 (Castillo Deposition at 99:6-10). Accord Pla Appx 3298-3300 (Manger Decl) at ¶ 20;  
Pla Appx 3345 (Briggs Decl) at ¶ 48; Pla Appx 3348-3349 (Manger Rebuttal) at ¶ 3-4; Pla Appx 
3363-3364 (Briggs Rebuttal) at ¶ 14. 
22. 
Prestamos collected over $300 million net in PPP loan processing fees. Pla Appx 
3393 (Ex. 21). 
23. 
Prestamos referred in an internal document to the over $300 million in net fees it 
obtained from PPP loans as a “windfall”.  
24. 
Prestamos has not returned the PPP loan processing fees that it received on 
account of Plaintiffs’ Loans. Pla Appx 3393 (Castillo Deposition at 95:6-7); Pla Appx 3390 
(Martinez Deposition) at 94:18-22.  
25. 
Prestamos was required to file updated SBA Form 1502 reports to accurately 
update the status of each loan including but not limited to update it as Undisbursed or Cancelled. 
See supra ¶ 19; Ex. 21 at Pla Appx 3392 Castillo Deposition at 37:1-17, 71:22-72:2; Ex. 14 at 
Pla Appx 3345 Briggs Opening at ¶ 48; Ex. 17 at Pla Appx 3363-3364 Briggs Rebuttal at ¶ 14-
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15; Ex. 12 at Pla Appx 3297-3298 Manger Opening at ¶ 19; Ex. 15 at Pla Appx 3348-3349 
Manger Rebuttal at ¶ 3-4.  
26. 
Prestamos did not file accurate or complete updated SBA Form 1502 reports to 
reflect loans that it reported as disbursed but that it later had cancelled. Pla Appx 0134-3291 
(Prestamos’ Form 1502s on Plaintiffs’ loans); Pla Appx 3389 (Martinez Deposition at 71:5-13). 
27. 
According to Prestamos, a loan balance due on a “cancelled” loan would be 
$0.00.  Pla Appx 3393 (Castillo Deposition 105:12-13). 
28. 
Prestamos submitted PARs to the Federal Reserve Bank of Cleveland for the 
Plaintiffs’ Loans in order to obtain credit advances to fund Plaintiffs’ Loans. Pla Appx Pla Appx 
3449-6299 (Prestamos’ PARs on Plaintiffs’ loans); Pla Appx 3392 (Castillo Deposition at 34:8-
11). 
29. 
By submitting a PAR, Prestamos pledged those PPP loans, including Plaintiffs’ 
Loans, as collateral to secure the loans advances received from the Federal Reserve. Pla Appx 
Pla Appx 3449-6299(Prestamos’ PARs on Plaintiffs’ loans); Pla Appx 3389 (Martinez 
Deposition at 23:24-24:6). 
30. 
The PARs contain origination and maturity dates for Plaintiffs’ Loans that are 
based on the dates the Plaintiffs executed their respective Loan Documents. Pla Appx Pla Appx 
3449-6299 (Prestamos’ PARs on Plaintiffs’ loans); Pla Appx 3389 (Martinez Deposition) 20:7-
11, 80:1-5. 
31. 
The inference from the facts based on the evidence in the record is that Prestamos 
has not returned the advances it received from the Federal Reserve Bank to fund Plaintiffs’ loans, 
even though it never funded Plaintiffs’ loans. Pla Appx 3379 (Castillo Decl)  at ¶ 51 (“In 
September 2021, Prestamos returned the credit advances from the Federal Reserve for loans that 
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were ultimately not funded.”); Pla Appx 3393 (Castillo deposition) at 81:24 (asked whether those 
allegedly returned credit advances included the advances on Plaintiffs’ loans, Mr. Castillo 
testified “[p]robably, but I don’t recall”).  
32. 
Prestamos acknowledges that the origination date of a PPP loan is the date on 
which a borrower signs the Loan Documents and that a maturity date “is the day that the loan 
will come due at the end of the term.” Pla Appx 3389 (Martinez Deposition) at 20:7-11, 21:5-8, 
80:1-5. 
33. 
Contrary to its assertions that Plaintiffs did not enter into enforceable contracts for 
PPP loans, Prestamos has tried to collect repayment of certain Plaintiffs’ loans plus interest even 
though those loans were never funded.  See ECF No. 139-20 at 3; ECF No. 139-20 at 6; ECF No. 
139-20 at 7; ECF 155-1 Exhibit A (attaching Prestamos’ invoices to plaintiff Lloyd). See also 
ECF No. 108 ¶¶ 296-298 (quoting directly from Prestamos’ invoices to plaintiff Lloyd seeking 
repayment of $20,832.00 in principal plus 1% interest). 
34. 
PPP loans were subject to forgiveness provided the borrower demonstrates that 
the funds were used in compliance with PPP regulations.  See 85 F.R. 20811-20812. 
35. 
Plaintiffs were precluded from applying for forgiveness because they could not 
certify they used funds in compliance with PPP regulations since they failed to receive those 
funds. See Pla Appx 3437-3444 SBA PPP Loan Forgiveness Application Form 3508-S.  
36. 
Over 90% of PPP loans have been forgiven. See Pla Appx 3445-3448 Class Cert. 
Ex. 30 (SBA Forgiveness Platform Lender Submission Metrics). 
37. 
It was common for banks to reject Prestamos’s disbursements of PPP loan 
proceeds to sole proprietors. Pla Appx 3427-3429 (Ex. 29) PRESTAMOS-00304345-
PRESTAMOS-00304346 (“Banks don’t like these PPP loans to Independent Contractors and 
Case 5:21-cv-04337-JMG     Document 163-1     Filed 05/21/25     Page 17 of 20

 
18 
Sole Proprietors because it is not the traditional business customer and they are concerned about 
fraud.”); Pla Appx 3433-3436 (Ex. 31) PRESTAMOS-00302492-PRESTAMOS-00302494.  
38. 
After certain Plaintiffs’ banks rejected Prestamos’ initial attempt to send them an 
ACH deposit of their PPP loan, those Plaintiffs provided Prestamos and/or its LSP Blueacorn 
with additional account or other required information to enable Prestamos to re-deposit their loan 
proceeds.  See Pla Appx 3403 ((Marshall Deposition) at 14:24, 141:1-2; Pla Appx 3404 
(Henderson Deposition) at 83:6-15; Pla Appx 3404 (Martin Deposition) at 197:1-7, 199:16-25, 
200:1-5, 201:13-25; Pla Appx3406 (Johnson Deposition) at 89:12-24, 90:12-21; Pla Appx 3406-
3407 (Marvel Deposition) at 75:12-23, 85:2-1. 
39. 
Prestamos knew that Blueacorn’s alleged enhanced due diligence or reverification 
process was not accurate as to certain loans. Pla Appx 3433-3436 (Ex. 31) PRESTAMOS-
00302492-PRESTAMOS-00302494 (“I have overrided BA’s decline, but need them to set up 
your prepaid card.”); PRESTAMOS-00304735 (“We recognize that Blue Acorn made an error 
and we are working with them to correct this issue and move forward on funding your loan.”). 
40. 
Prestamos failed in its obligation under the Information and Bank Account 
Certification and Authorization form in the parties’ Loan Documents to take reasonable steps to 
confirm the ownership and active account status of the bank accounts Plaintiffs designated, 
including regarding any personal accounts which could not be used for PPP loan deposits,  
versus business accounts into which PPP loans could be deposited.  
41. 
Plaintiff Martin initially designated a personal account for his PPP loan which 
rejected the ACH deposit from Prestamos, and thereafter also offered an alternative business 
account to Prestamos and its LSP Blueacorn to deposit his SBA-approved $10,865.00 PPP loan, 
which Prestamos still refused to fund. Pla Appx 3409 (Ex. 26) ¶¶ 3-5. 
Case 5:21-cv-04337-JMG     Document 163-1     Filed 05/21/25     Page 18 of 20

 
19 
42. 
For certain PPP borrowers other than Plaintiffs, where their banks rejected a 
deposit of loan proceeds by ACH funds transfer, Prestamos remitted their loan proceeds by 
sending them a prepaid debit card. See Pla Appx Pla Appx 3376 (Ex. 18) (Castillo Decl.) at ¶ 37; 
Pla Appx 3392 (Ex. 21) (Castillo Deposition) at 12:2-5, 14:1-5; 49:10-18; 95:4-6; Pla Appx 3393 
(Ex. 21) (“all funding will be done via prepaid card.”); Pla Appx 3389 (Ex. 20)(Martinez 
Deposition) at 57:14-18 (“During the period of time of the PPPs, there were certain ones that 
were funded to a prepaid card, issued to a prepaid card.”); Pla Appx 3389 (Martinez Deposition) 
at 59:7-13 (“The prepaid bank card was an exception process. So we would only -- we would 
only ACH funds to a prepaid bank cards only after the bank had rejected the funds and we 
learned of it.”); Pla Appx 3427-3429 (Ex. 29) PRESTAMOS-00304345-PRESTAMOS-
00304346 (“We are working with Blue Acorn and a prepaid debit card company to send out 
Mastercards in the mail.”).  
43. 
Prestamos told certain Plaintiffs they would receive their loan proceeds by 
prepaid card. Pla Appx 3403 (Marshall Deposition) at 19:20-23 (“I had an e-mail that said 
everything looked fine, that I was going to be receiving my funds soon.  I opted in to a Dash 
card.  They said I would be receiving it soon.”); Pla App 3404 at 51:2-9, 52:12-18, 83:12-14 
(“Finally got an e-mail that I could update my banking or I could opt in to a Dash card.”); Pla 
Appx 3404 (Martin Deposition) at 202:16-22, 222:3-7; Pla Appx 3403 (Townsend Deposition) at 
232:20-25, 233:10; Pla Appx 3407 (Smith Deposition) at 86:1-8, 87:9-14, 88:3-8, 89:5-12; Pla 
Appx 3406 (Johnson Deposition) at 88:19-24, 91:4-7, 15-20. Accord Pla Appx 3409 at ¶ 6 
(plaintiff Martin’s decl.) (“I also asked them to use their prepaid Visa card option, which I 
understood was being used for other borrowers. This would have resolved the issue. But the 
request was refused.”).  
Case 5:21-cv-04337-JMG     Document 163-1     Filed 05/21/25     Page 19 of 20

 
20 
Dated: May 21, 2025 
 
Respectfully submitted, 
 
Bailey & Glasser LLP 
 
 
By: /s/ Lawrence J. Lederer 
 
Lawrence J. Lederer (Pa. ID 50445) 
Bart D. Cohen (Pa. ID 57606) 
1622 Locust Street 
Philadelphia, PA 19103 
T.: 202.463-2101 
F.: 202.463-2103 
llederer@baileyglasser.com  
bcohen@baileyglasser.com    
 
Bailey & Glasser LLP 
Michael L. Murphy (pro hac vice)  
1055 Thomas Jefferson Street NW, Suite 540 
Washington, DC 20007 
T.: 202.463-2101 
F.: 202.463-2103 
mmurphy@baileyglasser.com 
 
Whiteman Osterman & Hanna LLP 
Justin A. Heller (pro hac vice) 
80 State Street, 11th Floor 
Albany, NY 12207 
T: (518) 487-7600 
F: (518) 432-3123 
jheller@woh.com  
 
Attorneys for Plaintiffs 
  
 
Case 5:21-cv-04337-JMG     Document 163-1     Filed 05/21/25     Page 20 of 20

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