Court filing
Deposition of Jeffrey Schwartz — Quesenberry v. JMG Investments, Inc. (C.D. Cal.)
Filed November 17, 2025 in Quesenberry Qui Tam Jmg; one of 7 filings from this case.
Record facts
| Court | U.S. District Court for the Central District of California |
|---|---|
| Filed | 2025-11-17 |
U.S. District Court for the Central District of California · No. 2:20-cv-08497-MWF-AS · Doc. 75-4 · 2025-11-17 · Docket on CourtListener
Full text
EXHIBIT B
Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 1 of 61 Page ID
#:512
Jeffrey Schwartz
August 6, 2025
1
UNITED STATES DISTRICT COURT
2
FOR THE CENTRAL DISTRICT OF CALIFORNIA
3
________________________________
4
UNITED STATES OF AMERICA, ex
5
rel. BRYAN QUESENBERRY,
6
Plaintiff,
7
v. No.
8
JMG INVESTMENTS, INC. and 2:20-cv-08497-MWF-AS
9
JEFFREY SCHWARTZ,
10
Defendants.
11
________________________________
12
VIDEOTAPED DEPOSITION OF
13
JEFFREY SCHWARTZ
14
DATE: Wednesday, August 6, 2025
15
TIME: 10:37 a.m.
16
LOCATION: United States Attorney's Office
17
300 North Los Angeles, Room 7516
18
Los Angeles, CA 90012
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OFFICIATED BY: Angelina King
20
21
22
23
24
Job No. CS7449664
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 2 of 61 Page ID
#:513
Jeffrey Schwartz
August 6, 2025
1
A P P E A R A N C E S
2
ON BEHALF OF PLAINTIFF UNITED STATES OF AMERICA, EX REL.
3
BRYAN QUESENBERRY:
4
PADEN GALLAGHER, ESQUIRE
5
JARED WIESNER, ESQUIRE
6
Department of Justice, Civil Division, Fraud
7
Section
8
175 North Street Northeast, 9th Floor, Room 10.1332
9
Washington, DC 20002
10
paden.gallagher@usdoj.gov
11
jared.s.wiesner2@usdoj.gov
12
(202) 305-1789
13
(202) 353-1274
14
15
ON BEHALF OF DEFENDANTS JMG INVESTMENTS, INC. AND
16
JEFFREY SCHWARTZ:
17
RICHARD RODGERS, ESQUIRE
18
Shane DiGiuseppe & Rodgers LLP
19
3125 Old Conejo Road
20
Thousand Oaks, CA 91320
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rar@lawsdr.com
22
(805) 230-2525
23
24
ALSO PRESENT:
25
Julio Pena, Videographer
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 3 of 61 Page ID
#:514
Jeffrey Schwartz
August 6, 2025
1
I N D E X
2
EXAMINATION: PAGE
3
By Mr. Gallagher 6
4
5
E X H I B I T S
6
NO. DESCRIPTION PAGE
7
Exhibit 16 United States' Amended Notice of
8
Deposition of Defendant Jeffrey
9
Schwartz 9
10
Exhibit 17 Paychex Year to Date Report 20
11
Exhibit 18 4-page Document, Bank of America 25
12
Exhibit 19 Paycheck Protection Program
13
Borrower Application Form 29
14
Exhibit 20 Defendant JMG Investments, Inc.'s
15
Responses to United States'
16
Revised First Set of Requests for
17
Admission 29
18
Exhibit 21 Paycheck Protection Program
19
Borrower Application Form 36
20
Exhibit 22 U.S. Small Business Administration
21
Note 45
22
Exhibit 23 Closing Information Sheet 50
23
Exhibit 24 Bank of America Statement 51
24
Exhibit 25 Chase Bank Statement 55
25
Exhibit 26 Fountainhead Forgiveness 58
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 4 of 61 Page ID
#:515
Jeffrey Schwartz
August 6, 2025
1
E X H I B I T S (Cont'd)
2
NO. DESCRIPTION PAGE
3
Exhibit 27 DocuSign document 64
4
Exhibit 28 Bank of America Paycheck
5
Protection Program Loan
6
Forgiveness Application 66
7
Exhibit 29 Paycheck Protection Program PPP
8
Loan Forgiveness Application Form
9
3508EZ 68
10
Exhibit 30 Letter from Richard A. Rodgers to
11
Jared S. Wiesner 75
12
Exhibit 31 Email from Jeffrey Schwartz to
13
Sarah Schwinden dated 7/26/21 84
14
Exhibit 32 Email from Lori Grieder to Jeff
15
Schwartz, dated 5/6/21 86
16
Exhibit 33 Email from Jeff Schwartz to Lori
17
Grieder, dated 6/25/21 87
18
19
20
21
22
23
24
25
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 5 of 61 Page ID
#:516
Jeffrey Schwartz
August 6, 2025
1
P R O C E E D I N G S
2
THE OFFICER: Good morning. My name is
3
Angelina King. I am the deposition officer assigned by
4
Veritext to take the record of this proceeding. We are
5
now on the record at 10:37 a.m.
6
This is a deposition of Jeffrey Schwartz
7
taken in the matter of United States of America vs. JMG
8
Investments, Inc., et al., on Wednesday, August 6, 2025,
9
at 300 North Los Angeles Street, Room 7516, Los Angeles,
10
California 90012.
11
I am a notary authorized to take
12
acknowledgements and administer oaths in California.
13
Additionally, absent an objection on the
14
record before the witness is sworn, all parties and the
15
witness understand and agree that any certified
16
transcript produced from the recordings of this
17
proceeding:
18
- is intended for all uses permitted
19
under applicable procedural and
20
evidentiary rules and laws in the same
21
manner as a deposition recorded by
22
stenographic means; and
23
- shall constitute written stipulation
24
of such.
25
This proceeding will be recorded via
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 6 of 61 Page ID
#:517
Jeffrey Schwartz
August 6, 2025
1
video technology by Julio Pena.
2
And at this time will everyone in
3
attendance please identify yourself for the record,
4
starting to my right.
5
MR. GALLAGHER: Good morning. Paden
6
Gallagher on behalf of the United States.
7
MR. WIESNER: Jared Wiesner on behalf of
8
the United States.
9
MR. RODGERS: Richard A. Rodgers on
10
behalf of the deponent witness, Jeffrey Schwartz.
11
THE OFFICER: Thank you. Hearing no
12
objection, no one else swear in the witness.
13
Mr. Schwartz, can you raise your right hand?
14
WHEREUPON,
15
JEFFREY SCHWARTZ,
16
called as a witness and having been first duly sworn to
17
tell the truth, the whole truth, and nothing but the
18
truth, was examined and testified as follows:
19
THE OFFICER: Thank you. You may
20
proceed.
21
EXAMINATION
22
BY MR. GALLAGHER:
23
Q All right. Good morning, Mr. Schwartz. Could
24
you please state your full name for the record?
25
A Jeffrey H. Schwartz.
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 7 of 61 Page ID
#:518
Jeffrey Schwartz
August 6, 2025
1
Q Okay. They're one and the same. So Harmony
2
Place is just a doing business --
3
A DBA.
4
Q A DBA. Okay. Do you know off the top of your
5
head what the EIN number for JMG is?
6
A Yes.
7
Q Okay. And when I say JMG, you know I'm
8
talking about JMG Investments. Right?
9
A Yes.
10
Q What is the EIN number?
11
A
12
Q Okay. And you were the whole owner of JMG,
13
but in turn JMG owns other entities. Correct?
14
A Correct.
15
Q And what entities are those?
16
A Dela Rosa Operations, Inc., and Valley
17
Restoration Center. Valley Restoration Center, Inc.,
18
is -- is really a separate corporation. I mean, they
19
all, all three of them have separate EIN numbers.
20
Q Okay. But they're all wholly owned by JMG.
21
Correct?
22
A Dela Rosa is wholly owned. Valley Restoration
23
Center is -- is a separate corporation. It's not wholly
24
owned by -- by JMG, but I own all of the stock in it.
25
Q Okay. But so I guess if we go up the pyramid,
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 8 of 61 Page ID
#:519
Jeffrey Schwartz
August 6, 2025
1
says "Wages/Salary"?
2
A Yes.
3
Q And you see the number there is $2,492,460.51?
4
A Yes.
5
Q And so that would cover all of the payroll
6
that you had for the dates at the bottom, March 1, 2019,
7
to December 14, 2019, for both VRC and Harmony Place.
8
Correct?
9
A Correct.
10
MR. RODGERS: Objection. Does
11
misstate -- it's -- the beginning date is March 10, not
12
March 1.
13
MR. GALLAGHER: I apologize. That's
14
correct. Let me ask that again.
15
BY MR. GALLAGHER:
16
Q So Mr. Schwartz, that $2,492,460.51 represents
17
all of the payroll that you paid to both VRC and Harmony
18
Place employees from March 10, 2019, to December 14,
19
2019. Correct?
20
A Correct.
21
Q Okay. There's not another $2,000,000.00 in
22
payroll that you paid during that time period not listed
23
here. Right?
24
A Correct.
25
Q Yeah, let me ask it differently. You don't
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 9 of 61 Page ID
#:520
Jeffrey Schwartz
August 6, 2025
1
have any reason to believe that you spent almost $4.5
2
million on payroll in 2019. Right?
3
A Looks like that's what I paid -- my payroll
4
was, in those particular months, from March 10th to
5
December 14th of 2019, it looks like I -- I spent
6
$2,492,460.51 in my payroll.
7
Q Okay. I know it looks like that, but you
8
don't have any reason to believe that you spent
9
$4,000,000.00 on payroll in 2019. Right?
10
A Right.
11
Q Okay. Okay. So Mr. Schwartz, I want to talk
12
to you now about your PPP loan applications. Now in
13
2020, JMG received two PPP loans. Correct?
14
A Correct.
15
Q Okay. So I want to be clear, it was JMG was
16
the entity that received the PPP loans. Right?
17
A Correct.
18
Q Harmony Place and VRC did not receive two
19
separate PPP loans. Right?
20
A Harmony Place is JMG.
21
Q Right, but VRC and JMG did not receive two
22
separate PPP loans?
23
A That's correct.
24
Q Okay. All right. I'd like to mark this as
25
Exhibit 18. Thank you.
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 10 of 61 Page
ID #:521
Jeffrey Schwartz
August 6, 2025
1
page of this document -- sorry to make you flip back and
2
forth -- you'll see in the box there it says "Average
3
Monthly Payroll, $202,394.02"?
4
A Yes.
5
Q So the same as that number that we just looked
6
at, I guess 2 cents off?
7
A Yes.
8
Q Okay. And then you see at the very bottom box
9
in that table, it says $505,985.00?
10
A Yes.
11
Q And then if we look back on the second page
12
there, it says 2.5 plus EIDL net of advance if
13
applicable equals loan request. And just below that is
14
the same $505,985.00. Right?
15
A Where is that again?
16
Q Sorry. On the second page.
17
A And what am I looking for again?
18
Q The second box there, which says it ends with
19
"equals loan request" and then underneath it is a box
20
that says $505,985.05.
21
A Right.
22
Q Okay. So in calculating the PPP loan that you
23
received from Bank of America, you used the same 2.492
24
million dollar number from the payroll document we
25
looked at. Correct?
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 11 of 61 Page
ID #:522
Jeffrey Schwartz
August 6, 2025
1
A Correct.
2
Q All right. I'd like to mark this as Exhibit
3
19. I will give you a chance to look at it, Mr.
4
Schwartz. Do you recognize this document, Mr. Schwartz?
5
(Exhibit 19 was marked for
6
identification.)
7
A Yes.
8
Q And what is it?
9
A It's an application for a PPP loan.
10
Q Okay. And do you know if this is the
11
application that you submitted to Fountainhead?
12
A I assume. I don't know for sure, but I assume
13
it is.
14
Q Okay. Well let's look at the second page.
15
You see at the bottom there it says, "Digitally signed
16
by Jeffrey H. Schwartz"?
17
A Yes.
18
Q And next to that is a date of May 7, 2020?
19
A May 7th, 2020. I do.
20
Q Okay. Keep that document in front of you, Mr.
21
Schwartz, but I'm going to mark this next document as
22
Exhibit 20. Thank you.
23
(Exhibit 20 was marked for
24
identification.)
25
Okay. Do you recognize that document, Mr.
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ID #:523
Jeffrey Schwartz
August 6, 2025
1
Q Okay. And so that loan application we were
2
just looking at the top says it is application form
3
2483. Correct? I apologize. It's at the bottom left.
4
I apologize.
5
A Yes.
6
Q And again that date that it's submitted says
7
May 7, 2020. Correct?
8
A I don't see the date on here.
9
Q On the second page, there's, next to your
10
signature, the date May 7, 2020. Right?
11
A Yes, correct.
12
Q Okay. And if you look at the loan amount on
13
the first page, it's $501,588.00?
14
A Yes.
15
Q That's the amount you were given for the
16
Fountainhead loan. Correct?
17
A Correct.
18
Q Okay. So do you have any reason to believe
19
that this is not the application form 2483 that you
20
submitted on May 7, 2022, to Fountainhead for a
21
$501,588.00 PPP loan?
22
A I do not.
23
Q Okay. All right. Now if we go back to the
24
first page there, you see that you have average monthly
25
payroll listed as $200,635.00. Correct?
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ID #:524
Jeffrey Schwartz
August 6, 2025
1
A Where is that again?
2
Q The front of Exhibit 19. At the top left,
3
there's a box that says, "Average monthly payroll,
4
$200,635.00."
5
A Okay.
6
Q Yes.
7
A Yes.
8
Q So that'd be about 2.4 million yearly, if
9
that's the monthly salary?
10
A Okay, if you say so.
11
Q Well, 200,000 times 12 is about 2.4 million.
12
Right?
13
A Okay.
14
Q Is that a "yes," Mr. Schwartz?
15
A I don't have a calculator on me, but I can add
16
it up.
17
Q Okay.
18
A Can I write on here?
19
MR. RODGERS: Don't write on the exhibit.
20
MR. GALLAGHER: Yeah.
21
MR. RODGERS: You can write on this.
22
THE WITNESS: Average monthly salary of
23
200,635 times 12. Okay. 2,400,000.
24
BY MR. GALLAGHER:
25
Q Okay. And if you look directly to the right
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 14 of 61 Page
ID #:525
Jeffrey Schwartz
August 6, 2025
1
of that box, two boxes over, it says, "Number of
2
Employees"?
3
A Yes.
4
Q And it says 64 employees. Right?
5
A It does.
6
Q So this loan application was based on the same
7
numbers from the payroll document that we just looked
8
at. Right?
9
A Yes.
10
Q Okay. Okay. All right. Now Mr. Schwartz, I
11
want to talk to you about your actual time applying for
12
these PPP loans that JMG received. So now you were
13
aware before you applied for a second PPP loan that you
14
were not allowed to obtain and retain two PPP loans in
15
2020. Correct?
16
A Not correct.
17
Q Let's look back at that Fountainhead
18
application again, Exhibit 19. If you go to the second
19
page there, do you see the section that says
20
certifications?
21
A I do.
22
Q All right. And if you look at the sixth one
23
down there, do you see where it says, "During the period
24
beginning on February 15, 2020 and ending on December
25
31, 2020, the Applicant has not and will not receive
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 15 of 61 Page
ID #:526
Jeffrey Schwartz
August 6, 2025
1
another loan under the Paycheck Protection Program."
2
Right?
3
A I see that.
4
Q And that's your initial next to the
5
certification?
6
A Yes, it is.
7
Q So you certified that on May 7, 2020, when you
8
signed this application. Right?
9
A Apparently I did.
10
Q Well you did. Right, Mr. Schwartz?
11
A Apparently I did. That's my signature.
12
Q And that's your --
13
A I don't remember it. I don't remember it, but
14
yeah, it's my signature.
15
Q And that's your initials next to it?
16
A That's my initials.
17
Q Okay. And you put your initials on this
18
document. Right?
19
A On this document?
20
Q Yes.
21
A I did, along with all the other ones.
22
Q Okay. And you can see at the bottom down
23
there it says SBA form 2483. Correct?
24
A Correct.
25
Q So that's the form that you submit as to apply
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 16 of 61 Page
ID #:527
Jeffrey Schwartz
August 6, 2025
1
for a PPP loan. Correct?
2
A That's correct.
3
Q So you made this same certification when
4
applying for your Bank of America loan, as well.
5
Correct?
6
A That's correct.
7
Q Okay. All right. I'd like to make this as
8
Exhibit 21.
9
(Exhibit 21 was marked for
10
identification.)
11
All right. And do you recognize that
12
document, Mr. Schwartz?
13
A Yes.
14
Q And what is it?
15
A Paycheck Protection Borrower Application Form.
16
Q Okay. And if you go to the second page there,
17
do you see that you signed this one, as well?
18
A I do see that.
19
Q And you see the date of that signature was May
20
6, 2020. Correct?
21
A May 6, 2020. Correct.
22
Q And if you look at that sixth certification
23
again, you'll see that it's the same one that, "During
24
the period beginning on February 15, 2020 and ending on
25
December 31, 2020, the Applicant has not and will not
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 17 of 61 Page
ID #:528
Jeffrey Schwartz
August 6, 2025
1
receive another loan under the Paycheck Protection
2
Program." Right?
3
A I see that.
4
Q Okay. And your initials appear next to that
5
one, as well?
6
A My initials appear next to it, but I do not
7
remember signing it.
8
Q Okay. Well there's a one that's typed in and
9
one that's handwritten. Correct?
10
A Correct.
11
Q And your signature's dated May 6, 2020.
12
Correct?
13
A That's correct.
14
Q And you have a handwritten signature there?
15
A That's correct, along with all the other ones.
16
I don't remember signing it.
17
Q You would have read these certifications
18
before signing these forms. Correct?
19
A Correct.
20
Q And at the top there, underneath
21
"Certifications," it says, "The authorized
22
representative of the Applicant must certify in good
23
faith to all of the below by initialing next to each
24
one"?
25
A That's correct.
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 18 of 61 Page
ID #:529
Jeffrey Schwartz
August 6, 2025
1
Q And so you wouldn't have initialed without
2
reading those certifications?
3
A I wouldn't have initialed without reading the
4
certification, but I don't remember signing it.
5
Q Okay. All right. Mr. Schwartz, I'm going to
6
show you a document that's already been marked in Ms.
7
Lori Grieder's deposition as Exhibit 4. Do you
8
recognize this document, Mr. Schwartz?
9
A Let me read it.
10
Q Okay.
11
THE OFFICER: Are you going to attach to
12
this exhibit, as well?
13
MR. GALLAGHER: No, we don't have to
14
because we already have it.
15
MR. RODGERS: This is not an exhibit for
16
this deposition?
17
MR. GALLAGHER: It's already been marked
18
as Ms. Grieder's deposition, so it's already Exhibit 4.
19
MR. RODGERS: It's exhibit 4?
20
MR. GALLAGHER: Yes. And Rick, you
21
should have -- I emailed all the exhibits to you guys
22
and the court reporter.
23
MR. RODGERS: Okay.
24
MR. GALLAGHER: So you should have them.
25
MR. RODGERS: Thank you.
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ID #:530
Jeffrey Schwartz
August 6, 2025
1
THE WITNESS: Yes, I remember.
2
BY MR. GALLAGHER:
3
Q Okay. And if you look at the second email
4
there, you see in the from line, that's your email.
5
Right? It says, "From Jeff Schwartz,
6
jeff@harmonyplace.com"?
7
A Yes.
8
Q Do you have any other email addresses?
9
A Yes.
10
Q What are they?
11
A schwartzjeff8@gmail.com.
12
Q Is that the only one?
13
A No.
14
Q Okay. So I'm going to read from that second
15
email there in blue out loud, and then I'll ask you a
16
question about it. Starting from the line, "You do
17
realize," it says, "You do realize that I applied for a
18
PPP loan through Chase that was submitted on April 5th,
19
way before I filed through you and your people. I'm not
20
worried about any confusion with where and how I got
21
this PPP loan, but what I am worried about is the fact
22
that two weeks after I applied for this loan, I did, in
23
fact, remind you via email that I received my loan
24
through Bank of America.
25
I was extremely surprised when the money was
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Case 2:20-cv-08497-MWF-AS Document 75-4 Filed 11/17/25 Page 20 of 61 Page
ID #:531
Jeffrey Schwartz
August 6, 2025
1
deposited into my Chase account. I have absolutely no
2
problem paying you the $10,032.00, but before I pay you,
3
I would like an email or letter from you stating that
4
if, in fact, I am forced to pay that loan back to the
5
SBA (Chase), you'll reimburse me for the $10,032.00 that
6
I am paying you in advance."
7
I'll stop there. So Mr. Schwartz, in that
8
paragraph, you're describing how you received two PPP
9
loans in 2020. Correct?
10
A That's correct.
11
Q And you sent this email on June 8, 2020.
12
Right?
13
A That's correct.
14
Q So again if we look at that sentence in the
15
middle there, you say that, "two weeks after" you
16
applied for this loan, you did in fact remind Ms.
17
Grieder via email that you received your loan through
18
Bank of America. That's what you say. Right?
19
A Correct.
20
Q And then you go on to say you were extremely
21
surprised when the money was deposited in your Chase
22
account. Right?
23
A Correct.
24
Q And the reason you say you were surprised is
25
because you knew you were not supposed to receive a
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Jeffrey Schwartz
August 6, 2025
1
second PPP loan. Correct?
2
A Not correct.
3
Q Mr. Schwartz, I'm not going to mark this, but
4
please take a look at it and tell me if you recognize
5
it.
6
MR. GALLAGHER: And Rick, I'll have one
7
for you too.
8
BY MR. GALLAGHER:
9
Q Do you recognize this, Mr. Schwartz?
10
A No, but go ahead. I've never seen it before.
11
Q Okay. Well do you see at the first page there
12
it says Civil Investigative Demand Number 23-1044?
13
A Yes.
14
Q And then in the middle it says, "Testimony
15
Under Oath of Jeffrey Schwartz Taken Remotely via Zoom
16
at 10:09 a.m. Pacific Time, Tuesday, October 10, 2023,
17
before Theresa JoAnn Phillips-Blackwell, CSR 12700?
18
A Yes.
19
Q Mr. Schwartz, you gave testimony in response
20
to a civil investigative demand from our office.
21
Correct?
22
A Correct.
23
Q Okay. And if you go to, it's the second page
24
there, but it says "Page 5" in the top right corner. Do
25
you see where that is? The top right corner of
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Jeffrey Schwartz
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the -- on this page right here, Mr. Schwartz. You see
2
at the bottom right page, it says "Page 5"?
3
A Yes. It's 2/5.
4
Q Okay. And then if you go to line 4, you see
5
where it says, the reporter reads, "You do solemnly
6
state that the evidence you shall give in this matter
7
shall be the truth, the whole truth, and nothing but the
8
truth," and you answer, "Yes, I do"?
9
A Yes.
10
Q Okay. Now Mr. Schwartz, if you turn to page,
11
it's page 12 of all the big pages, but it's page 43 in
12
the top right.
13
A Page what?
14
Q So page 12 on the bottom there.
15
A Page 12 at the bottom. Okay. Up here.
16
Q Okay. And page 43 at the top right. Do you
17
see that?
18
A Yes.
19
Q All right. Now Mr. Schwartz, I want you to
20
look at line 19, and you can see that that's where you
21
were asked, "Then you say -- you write, 'I was extremely
22
surprised when the money was deposited into my Chase
23
account.' Can you tell me what that -- what you meant
24
by that?" You see that question?
25
A Yeah.
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1
Q And you responded, answer, "Well I knew -- I
2
knew that I was -- I was only supposed to get one PPP
3
loan, and then all of a sudden the loan from
4
Fountainhead came through. I wasn't expecting it
5
because I had already received the loan from Bank of
6
America." Correct?
7
A That's correct.
8
Q I read that right?
9
A You read that right.
10
Q And Mr. Schwartz, when you gave that answer,
11
you knew you were under an oath to tell the truth.
12
Correct?
13
A Yes.
14
Q Okay. So on June 8, 2020, that's why you sent
15
that email. Right? Because you knew you were only
16
supposed to get one PPP loan.
17
A Let's put it this way, I -- I didn't remember
18
signing that form, so I did not think that it was
19
illegal, if that's what you're saying. I didn't think
20
it was anything wrong with doing it. I figured I was
21
only supposed to getting one. But again, Lori Grieder,
22
what she indicated to me was that she was going to work
23
with Fountainhead and -- and to get this extra loan
24
either forgiven or -- or were paid for.
25
So I -- I answered that correctly. But those
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Jeffrey Schwartz
August 6, 2025
1
BY MR. GALLAGHER:
2
Q Okay. Welcome back, Mr. Schwartz. So to be
3
clear, you have not paid back either of your PPP loans.
4
Correct?
5
A That's correct.
6
Q All right. And the Bank of America loan was
7
funded on May 15, 2020. Right?
8
A Yes.
9
Q All right. I am going to mark this as Exhibit
10
22. That's where we are. All right. Do you recognize
11
that document, Mr. Schwartz?
12
(Exhibit 22 was marked for
13
identification.)
14
A Yes.
15
Q Okay. What is it?
16
A It's from the SBA and is the -- the date of
17
the loan for $505,987.00.
18
Q And you see at the top it says "note"?
19
A Yes.
20
Q Do you understand this to be the promissory
21
note that you signed to receive your Bank of America PPP
22
loan?
23
A Okay.
24
Q Do you know what a promissory note is, Mr.
25
Schwartz?
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A Yes.
2
Q Do you know if someone would disperse a loan
3
to you without you signing a promissory note?
4
A I don't think so.
5
MR. RODGERS: Objection, speculation,
6
vague, ambiguous, form of the question.
7
MR. GALLAGHER: You can answer again, Mr.
8
Schwarz, to make sure it's on the record.
9
THE WITNESS: What was the question
10
again?
11
MR. GALLAGHER: Do you think someone
12
would provide you with a loan without you signing a
13
promissory note?
14
MR. RODGERS: Same objection.
15
MR. GALLAGHER: You can answer.
16
THE WITNESS: I don't believe so.
17
BY MR. GALLAGHER:
18
Q Do you think Bank of America would've given
19
you a PPP loan without you signing a promissory note?
20
A I don't believe so.
21
Q Okay. And do you see the date of this
22
promissory note is May 15, 2020, on the first page, Mr.
23
Schwartz?
24
A I do.
25
Q Okay. And you see that you signed it there on
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1
the last page. Right?
2
A I do.
3
Q I am going to mark this as Exhibit 23 -- or
4
sorry -- I apologize, I'm not marking it. This was
5
already marked as Exhibit 11 in the deposition of Ms.
6
Lori Grieder. Okay. Do you recognize this email
7
thread, Mr. Schwartz?
8
A Yes.
9
Q Okay. And you see at the top there there's an
10
email from someone at Commercial Finance Partners?
11
A Yes.
12
Q Okay. And what did you understand was the
13
relationship between Commercial Finance Partners and
14
Fountainhead, if any?
15
A One and the same.
16
Q Okay. Do you see where that first email,
17
where it says, "I just found the issue and resolved it.
18
You have a loan number with us and Fountainhead.
19
Congrats. You'll receive a request for follow-up
20
documents within a few days, but you've reserved your
21
'slice of the pie.'" Do you see that?
22
A I do see that.
23
Q What did you understand that to mean when you
24
read it?
25
A I believed that my loan had gone through.
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Jeffrey Schwartz
August 6, 2025
1
Q Okay. And that email was sent on May 8, 2020.
2
Correct?
3
A Yes.
4
Q Okay. And so you had a loan number from
5
Fountainhead as of May 8, 2020. Right?
6
A Yes.
7
Q Okay. And you did not withdraw your
8
application from Bank of America when you saw this
9
email. Right?
10
A Correct.
11
Q Okay. I'm now showing you what was already
12
marked as Exhibit 12 during Ms. Grieder's deposition.
13
Let me know when you've had a chance to review it,
14
A Okay.
15
Q Okay. And do you recognize the email thread?
16
A Yeah. Yes.
17
Q So if you look at that last email there, you
18
see there's someone at Fountainhead named Alexa Scher
19
emailing you. Correct?
20
A Yes.
21
Q And do you see where she says,
22
"Congratulations. Your PPP loan has been approved with
23
the SBA"?
24
A Yes.
25
Q And she sent that email to you on May 12,
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2020. Correct?
2
A Correct.
3
Q You did not withdraw your application with
4
Bank of America after receiving that email on May 12th.
5
Correct?
6
A Correct.
7
Q All right. And if you go back to the first
8
page there, at the bottom, you see Ms. Scher emails you
9
again?
10
A Okay.
11
Q And she was asking you to provide certain
12
documents. Correct?
13
A Correct.
14
Q And those documents were a copy of the back of
15
your driver's license and a closing form with wiring
16
info and email info. Right?
17
A Right.
18
Q So at this point, when you were sending these
19
emails with Ms. Scher, you were in direct contact with
20
Fountainhead about your PPP loan. Correct?
21
A Correct.
22
Q Okay. And you responded to her with the
23
information she requested on May 14, 2020, in that top
24
email. Right?
25
A Correct.
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Jeffrey Schwartz
August 6, 2025
1
Q Okay. I'd like to mark this as Exhibit 23.
2
Thanks. Do you recognize this document, Mr. Schwartz?
3
(Exhibit 23 was marked for
4
identification.)
5
A No.
6
Q Okay. You see at the top it says "Closing
7
Information Sheet." Correct?
8
A Yes.
9
Q And you see on the second page it says, "Wire
10
Instructions"?
11
A Yes.
12
Q And at the top of that there's a logo that
13
says Fountainhead?
14
A Yes.
15
Q Do you have any reason to believe this is not
16
the closing information sheet that you sent to Ms.
17
Scher?
18
A I don't.
19
Q Okay. And if we look back at that email
20
thread again, you see there's an attachment that you
21
send at the top -- we're back at the email thread, Mr.
22
Schwartz.
23
A Exhibit 12 Grieder?
24
Q Yes, the Grieder Exhibit 12. There you go.
25
There's an attachment titled Fountainhead Closing Info
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ID #:541
Jeffrey Schwartz
August 6, 2025
1
PPP Loan.pdf. Right?
2
A Yes.
3
Q Okay. And then in that email you asked Ms.
4
Scher, what is the timeline you should expect on
5
securing the loan and receiving the funds. Correct?
6
A Correct.
7
Q Okay. And you did not withdraw your
8
application for the Bank of America PPP loan after
9
sending Fountainhead that closing information form with
10
wiring instructions. Did you?
11
A No.
12
Q And after you received the funds from the Bank
13
of America loan on May 15, 2020, you did not reach out
14
to Ms. Scher or anyone at Fountainhead to ask them to
15
withdraw your application. Correct?
16
A To withdraw my application from Fountainhead?
17
Q Correct.
18
A No.
19
Q Okay. I'd like to mark this as Exhibit 24.
20
Do you recognize this document, Mr. Schwartz?
21
(Exhibit 24 was marked for
22
identification.)
23
A No.
24
Q Okay. You see the top it says, "Bank of
25
America"?
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Jeffrey Schwartz
August 6, 2025
1
around or on May 19, 2020?
2
A I have no idea.
3
Q Okay. But regardless, it is one of JMG's bank
4
accounts. Correct?
5
A Yes.
6
Q And it looks like a statement from that
7
account?
8
A Looks like it.
9
Q All right. And if we look at the top there
10
under "Deposits and Other Credits," you see one dated
11
May 19, 2020. Correct?
12
A Yes.
13
Q And it says, "Agent Assisted transfer from CHK
14
5424 Confirmation Number 0492715391. Right?
15
A Right.
16
Q And checking account 5424, that's another one
17
of JMG's accounts. Correct?
18
A Correct.
19
Q And if you look to the right there, the amount
20
is $505,987.00. Right?
21
A Yes.
22
Q And that's the same amount of money that the
23
Bank of America PPP loan was for?
24
A That's correct.
25
Q So this is you moving the PPP loan money from
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Jeffrey Schwartz
August 6, 2025
1
one of your checking accounts to another one. Correct?
2
A That's the payroll account.
3
Q Okay. But it is you moving the PPP loan money
4
from one of your accounts to another. Right?
5
A To the payroll account, yes.
6
Q And it says "Agent Assisted Transfer"?
7
A Yes.
8
Q So you would've had an agent help you do that.
9
Correct?
10
A Yes.
11
Q Okay. Now after you moved this money on May
12
19, 2020, you did not withdraw your loan application
13
from Fountainhead. Correct?
14
A Correct.
15
Q Okay. And if we look a bit lower there,
16
"Withdrawals and Other Debits," you'll see there was a
17
transfer to Paychex with an X of $116,781.24. Correct?
18
A That's correct.
19
Q And that was on May 21, 2020?
20
A It was, yes.
21
Q And am I correct in that's you paying payroll
22
for your employees at JMG?
23
A Yes.
24
Q So on May 21, 2020, you were using the
25
proceeds from the PPP loan you received from Bank of
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Jeffrey Schwartz
August 6, 2025
1
America to pay your payroll. Correct?
2
A Correct.
3
Q And after you did that on May 21, 2020, you
4
did not withdraw your application from Fountainhead.
5
Correct?
6
A Correct.
7
Q Do you remember what day the Fountainhead loan
8
was dispersed to you, Mr. Schwarz?
9
A No.
10
Q Okay. I'd like to mark this as Exhibit 26.
11
THE OFFICER: Twenty-five.
12
MR. GALLAGHER: Twenty-five. I missed
13
it. Sorry, Rick.
14
MR. RODGERS: That's all right. Thank
15
you.
16
BY MR. GALLAGHER:
17
Q Okay. Do you recognize this document,
18
Mr. Schwartz?
19
(Exhibit 25 was marked for
20
identification.)
21
A No.
22
Q Can you see at the top there it says "Chase"?
23
A It is, yes.
24
Q And then a little bit further down again, "JMG
25
Investments, Inc. DBA Harmony Place"?
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Jeffrey Schwartz
August 6, 2025
1
A Yes.
2
Q And then on the top right there as an account
3
number?
4
A Yes.
5
Q And that's one of the account numbers for JMG
6
Investments. Correct? Sorry, I'll rephrase. That's an
7
account number for one of the bank accounts used by JMG
8
Investments. Correct?
9
A I assume. I don't really know that number,
10
but I -- I assume. It says, "JMG."
11
Q Okay. And it looks like another bank
12
statement. Right?
13
A Yep. Yes.
14
Q And do you see at the top it says May 1, 2020,
15
through May 29, 2020. Right?
16
A Yes, I see that.
17
Q All right. And if we go to the second page
18
and you look at the very bottom, there's a deposit on
19
May 22, 2020. Correct?
20
A Correct.
21
Q Okay. And the description there says,
22
"Fedwire Credit Via: Capital One," and then a little bit
23
further down the line, after some numbers, "Fountainhead
24
Sbf LLC Lake Mary, Florida." Correct?
25
A Yes.
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Jeffrey Schwartz
August 6, 2025
1
Q And then in the third line of that description
2
on the right, do you see where it says "Ppl Funding"?
3
A Where is that?
4
Q If you go down to the third line of that
5
entry, all the way to the right, just before the
6
numbers, it says, "Ppl Funding."
7
A Okay.
8
Q And then you'll see the number after it is
9
39482574-00. Right?
10
A Yes.
11
Q Okay. So this is the money from the
12
Fountainhead loan coming to you. Correct?
13
A Correct.
14
Q And the number after that, or the deposit is
15
for $501,588.00. Correct?
16
A Yes.
17
Q Okay. And that was one week after the BOA
18
loan came in. Correct?
19
A Correct.
20
Q It was three days after you made the agent
21
assisted transfer we just looked at?
22
A Yes.
23
Q And it was the day after you made a payment to
24
Paychex. Right?
25
A Yes.
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ID #:547
Jeffrey Schwartz
August 6, 2025
1
Q Okay. All right. I'd like to mark this as
2
Exhibit 26. Thank you. Okay. Let me know when you
3
have a chance to review that one, Mr. Schwartz.
4
(Exhibit 26 was marked for
5
identification.)
6
A Okay.
7
Q All right. Do you recognize these documents,
8
Mr. Schwartz?
9
A No.
10
Q Do you understand that they're closing
11
documents for your loan from the Fountainhead PPP loan?
12
A Looks like it, yes.
13
Q Okay. On the first page there it says
14
Fountainhead. Right?
15
A Yes.
16
Q If you look at the second page, it's titled
17
"Forgiveness Information." Correct?
18
A Yes.
19
Q And it's talking about PPP loans?
20
A Yes.
21
Q All right. And if we turn to the fifth page
22
there, it's a document titled "Consent to Corporate
23
Action." Let me know when you see that.
24
A Okay.
25
Q All right. It says, "Consent to Corporate
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August 6, 2025
1
Action by All of the Board of Directors and Shareholders
2
of JMG Investments, Inc., a California Corporation and
3
Waiver of Notice and Meeting Requirements." Right?
4
A Yes.
5
Q Do you know what that is, Mr. Schwartz?
6
A It's a meeting, a corporate meeting, talking
7
about Fountainhead and the loan. I imagine it's
8
to -- to -- to be forgiven.
9
Q Well let's look at the date on the bottom
10
there, Mr. Schwartz. You see where it says signed on
11
May 22, 2020?
12
A I do.
13
Q So this is to receive the loan. Correct?
14
A Okay.
15
Q Is that correct?
16
A Yes.
17
Q And do you see in the paragraph starting
18
"Whereas," the second paragraph there?
19
A "Whereas," yes.
20
Q You see where it says, "Whereas, Borrower is
21
receiving from Fountainhead SBF LLC ('Lender') a loan in
22
the principle sum of five hundred one thousand five
23
hundred eighty-eight and No/100 Dollars ($501,588.00)
24
'Loan' to be evidenced by and repayable in accordance
25
with the terms of a promissory note of even date
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August 6, 2025
1
herewith in the original principle amount of the loan
2
'Note.'" Do you see that?
3
A Yes.
4
Q And the date this was signed was May 22, 2020.
5
Right?
6
A Yes.
7
Q And that's your signature next to it?
8
A Yes.
9
Q All right. Then Mr. Schwartz, if you go
10
forward two more pages, do you see the one titled
11
"Certification of Beneficial Owners"?
12
A Yes.
13
Q Okay. And if you look at the bottom again,
14
you signed that document on May 22, 2020?
15
A Yes.
16
Q Do you know why you signed that document?
17
A No.
18
Q All right. So if we go back a page -- go back
19
one page, Mr. Schwartz. Do you see the third question
20
down there, "Who has to complete this form"?
21
A Yes.
22
Q And it says, "This form must be completed by
23
any person opening a new account on behalf of a legal
24
entity with any of the following US institutions," and
25
then it lists certain institutions?
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August 6, 2025
1
A Yes.
2
Q So that's what you were doing. Correct?
3
A Yes.
4
Q All right. And then if we go forward a few
5
pages to the document titled "Closing Information
6
Sheet."
7
A Yes.
8
Q Okay. If you go to the next page, you'll see
9
you DocuSigned that as well?
10
A Yes.
11
Q At the top again is the Fountainhead logo?
12
A Yes.
13
Q All right. And then if we go forward another
14
three pages, there's a page titled "Borrower
15
Certification and Agreement"?
16
A Yes.
17
Q At the top again is the Fountainhead logo?
18
A Yes.
19
Q And if you look at the first paragraph here,
20
it says, "In order to induce Fountainhead SBF LLC
21
('Lender') to make a U.S. Small Business Administration
22
('SBA') guaranteed loan, SBA loan number 39482574-00
23
('Loan') to JMG Investments, Inc., a California
24
corporation ('Borrower')," and I'll stop right there.
25
Do you see that?
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A Yes.
2
Q Okay. And you signed this document on May 22,
3
2020. Correct?
4
A Yes.
5
Q So on May 22, 2020, you signed this document
6
to induce Fountainhead to provide you with a PPP loan.
7
Correct?
8
A Correct.
9
Q All right. And if we go to the next page, you
10
see there is another promissory note like the Bank of
11
America one we looked at?
12
A Okay.
13
Q You see that Mr. Schwartz?
14
A I see it.
15
Q And then you see next to "Lender" it says,
16
"Fountainhead SBF LLC"? At the bottom box there where
17
it says "Lender"? On the first page. Yes. Or on
18
that -- in that page, Mr. Schwartz, which you're on, if
19
you go to the bottom box there in the middle of the
20
page, it says "Lender."
21
A Yeah. Lender, Fountainhead. Yes.
22
Q Okay.
23
A Okay.
24
Q And then if we go to the end of that note,
25
you'll see that you DocuSigned that, as well?
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A Yes.
2
Q All right. And then if we go to the next
3
page, it's a loan agreement? After that page, Mr.
4
Schwartz. You see the loan agreement?
5
A Yes.
6
Q And at the top there it says, "Between JMG
7
Investments and Fountainhead"?
8
A Yes.
9
Q All right. If you go to the next page, you
10
DocuSigned that one as well. Correct?
11
A Correct.
12
Q Okay. So you were signing these documents
13
about your Fountainhead PPP loan on May 22, 2020.
14
Correct?
15
A Correct.
16
Q All right. And if you go forward just a few
17
more pages, there's one titled "U.S. Small Business
18
Settlement Sheet"?
19
A Yes.
20
Q Okay. And at the bottom, you can see you
21
again DocuSigned that one on May 22, 2020. Correct?
22
A Correct.
23
Q And I'd like to mark this as Exhibit 27.
24
Thank you. Mr. Schwartz, have you ever seen this
25
before?
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Jeffrey Schwartz
August 6, 2025
1
//
2
(Exhibit 27 was marked for
3
identification.)
4
A Don't remember seeing this before.
5
Q Okay. So in the top right, you see where it
6
says "DocuSign Secured"?
7
A Yes.
8
Q And then the line below that says "Certificate
9
of Completion"?
10
A Yes.
11
Q All right. And then you see there it says
12
"Envelope ID" at the top left?
13
A Yes.
14
Q And if you look at that Envelope ID, that's
15
the same Envelope ID that appears on top of the
16
Fountainhead closing documents we just looked, Exhibit
17
26. Right?
18
A Okay. I believe you.
19
Q Well at the top left, Mr. Schwartz, do you see
20
that?
21
A Here?
22
Q On the top left of Exhibit 26. Those.
23
A Yes.
24
Q Okay. And you see just below the Envelope ID
25
of Exhibit 27, it says, "Subject, Cares Act Closing
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1
Documents, JMG Investments." Right?
2
A Where is that?
3
Q Just below Envelope ID.
4
A Yes.
5
Q All right. And if you see the section there,
6
it says "Signer Events." Do you see that? It's
7
about -- it's the third section, it looks like.
8
A Yes, "Signer Events."
9
Q Okay. And do you see your DocuSign signature
10
there?
11
A I do.
12
Q And if you look at the timestamp on the right,
13
do you see it says, "Sent May 19, 2020"?
14
A Yes.
15
Q And then it says "Resent" a few times, and
16
then "Viewed," and it says, "Viewed on May 22, 2020"?
17
A Yes.
18
Q And it says "Signed May 22, 2020." Correct?
19
A Twenty -- 22 -- 2020.
20
Q It says, "Signed May 22, 2020." Correct?
21
A Yes, correct.
22
Q Okay. All right. So Mr. Schwartz, let's move
23
on from the application process and talk about what
24
happened after you received both PPP loans. Mr.
25
Schwartz, you know what it means to seek forgiveness on
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August 6, 2025
1
a PPP loan. Right?
2
A Yes.
3
Q Do you understand that means you would not
4
have to pay back a PPP loan?
5
A Yes.
6
Q And you applied for forgiveness on both the
7
Bank of America and Fountainhead loans. Correct?
8
A Yes.
9
Q And you know the BA Bank of America loan was
10
forgiven. Right?
11
A Yes.
12
Q Okay. I'll mark this as Exhibit 28. Thank
13
you. Okay. Let me know when you have a chance to look
14
at that, Mr. Schwartz.
15
(Exhibit 28 was marked for
16
identification.)
17
A Okay.
18
Q Do you recognize this document?
19
A No.
20
Q Okay. We see the top of the first page, it
21
says "Bank of America"?
22
A Yes.
23
Q And then below that it says "Paycheck
24
Protection Program Loan Forgiveness Application (SBA
25
Form 3508)"?
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Jeffrey Schwartz
August 6, 2025
1
working on behalf of JMG Investments, Inc. Correct?
2
A That's correct.
3
Q All right. If you go back to the second page,
4
do you see this section titled "Employees" at the
5
bottom?
6
A Yes.
7
Q And it says 60 employees at the time of the
8
borrower's PPP loan application. Correct?
9
A Yes.
10
Q And after submitting this application, you
11
ultimately received forgiveness on the Bank of America
12
loan on or around February of 2021. Right?
13
A Right, yes.
14
Q Okay. And so you knew this loan had been
15
forgiven in February of 2021?
16
A Yes.
17
Q All right. Okay. I'd like to mark this as
18
Exhibit 29. Thank you. All right. Let me know when
19
you have a chance to review that, Mr. Schwartz.
20
(Exhibit 29 was marked for
21
identification.)
22
A Okay.
23
Q Okay. Do you recognize this document?
24
A No.
25
Q You see at the top of the first page it says
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August 6, 2025
1
America loan on May 15, 2020. Correct?
2
A Yes.
3
Q And that's the covered period start date?
4
A Yes.
5
Q And you received your Fountainhead loan on May
6
22, 2020. Correct?
7
A Yes.
8
Q And that's the covered period start date?
9
A Yes.
10
Q And they both run 24 weeks?
11
A Okay.
12
Q So the covered periods are exactly one week
13
off. Correct?
14
A Yes.
15
Q So they're based on the start date -- the
16
start date is based on when you received the loan.
17
Correct?
18
A Yes.
19
Q And you still received both of these loans in
20
2020. Correct?
21
A Correct.
22
Q Okay. All right. I am showing you what's
23
already been marked as Exhibit 8 in the deposition of
24
Ms. Grieder. Do you recognize this email thread, Mr.
25
Schwartz?
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Jeffrey Schwartz
August 6, 2025
1
A Yeah. I don't recognize it, but it -- it
2
looks like an email.
3
Q That's your email account. Correct?
4
A Yes.
5
Q Okay. And if you look at that third email on
6
the first page, it starts with "Fountainhead told me."
7
Do you see that?
8
A Yes.
9
Q And you sent that email on April 20, 2022.
10
Correct?
11
A Yes.
12
Q And it says, "Fountainhead told me that they
13
can only accept one PPP per year from any account, so
14
they're rejecting the forgiveness on that loan, but will
15
give me five years to pay it back." Correct?
16
A Correct.
17
Q So you were told by Fountainhead by April 20,
18
2022, that they would not forgive the loan but you could
19
pay it back instead. Correct?
20
A That's what it says. Yes, correct.
21
Q And you did not attempt to pay back the loan
22
to Fountainhead after that point. Correct?
23
A I was never given a bill.
24
Q Okay. So you've never made a payment to
25
Fountainhead on that loan. Correct?
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Jeffrey Schwartz
August 6, 2025
1
A No. I would've been happy to pay them back if
2
they sent me a bill.
3
Q Okay. I guess to make that clear,
4
Mr. Schwartz, you have not paid back any of that PPP
5
loan to Fountainhead. Correct?
6
A That's correct.
7
Q Okay. Now you were also made aware that
8
Fountainhead charged off the duplicate PPP loan to the
9
Small Business Administration. Right?
10
A Correct.
11
Q All right. I'd like to mark this as Exhibit
12
30. Yeah.
13
(Exhibit 30 was marked for
14
identification.)
15
MR. RODGERS: What was the exhibit? The
16
one you just handed me with that email?
17
MR. GALLAGHER: That was Exhibit 8,
18
already from Grieder.
19
MR. RODGERS: Okay.
20
MR. GALLAGHER: Yeah.
21
BY MR. GALLAGHER:
22
Q All right. Mr. Schwartz, do you recognize
23
this document, Exhibit 30?
24
A Yes.
25
Q Okay. If we go to the very last page there,
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Jeffrey Schwartz
August 6, 2025
1
A Certification --
2
Q "Borrower Certification and Agreement." I
3
believe it's further than that.
4
A There it is.
5
Q There it is. All right. You see where it
6
says, "Borrower certifies that," and then there's three
7
certifications?
8
A Yes.
9
Q Okay. So that first certification, you see
10
where it reads, "Borrower acknowledges that if the
11
Borrower defaults on the loan, SBA may be required to
12
pay lender under the SBA guarantee and SBA may then seek
13
recovery on the loan (to the extent any balance remains
14
after loan forgiveness)." You see that?
15
A Okay.
16
Q Okay. So you knew that if you defaulted on
17
the loan payments to Fountainhead, then the Small
18
Business Administration may be required to pay
19
Fountainhead the loan funds. Right?
20
A Correct.
21
Q And you knew that if Fountainhead charged off
22
that loan, you would then have an obligation to repay
23
those loan funds to the government. Correct?
24
A Correct.
25
Q So you would agree then that when you were
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Jeffrey Schwartz
August 6, 2025
1
you to confirm that JMG Investments obtained two PPP
2
loans in 2020. Correct? It says, "I see that JMG
3
Investments, Inc. obtained a PPP loan through," and then
4
lists the bank --
5
A Yeah. "Please confirm that you received two
6
loans for the business in 2020."
7
Q Okay. Now Mr. Schwartz, did you ever attempt
8
to apply for forgiveness on the Fountainhead PPP loan
9
before July 19, 2021?
10
A I don't remember.
11
Q Okay. I'd like to mark this as Exhibit 32.
12
Do you recognize this email thread, Mr. Schwartz?
13
(Exhibit 32 was marked for
14
identification.)
15
A No.
16
Q Okay. Well it's, you see, it's an email from
17
Ms. Grieder to you. Correct?
18
A Yes.
19
Q And she's passing on a message from
20
Fountainhead?
21
A Yes.
22
Q All right. And that message is "I sincerely
23
apologize for the delay. Our team of forgiveness
24
specialists is currently working on verifying your
25
application. Once verified, a loan officer will review
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Jeffrey Schwartz
August 6, 2025
1
for compliance. If everything is correct, the loan
2
officer will send you a digital copy of the application
3
that you will sign via DocuSign. Our team will reach
4
out if any additional information is necessary." You
5
see that?
6
A Yes.
7
Q And that email was sent on May 6, 2021.
8
Correct?
9
A Yes.
10
Q So that's before the date of the application
11
that we looked at, July 19, 2021. Correct?
12
A Yes.
13
Q So you applied for forgiveness on the
14
Fountainhead loan before July 19th., Correct?
15
A Yes.
16
Q Okay. I'd like to mark this as Exhibit 33.
17
There we go. All right. Do you recognize that email,
18
Mr. Schwartz?
19
(Exhibit 33 was marked for
20
identification.)
21
A No, no.
22
Q Okay. But that's your email at the top.
23
Right?
24
A Yes.
25
Q And that's you sending an email to Lori
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Jeffrey Schwartz
August 6, 2025
1
BY MR. GALLAGHER:
2
Q But Fountainhead did deny your initial
3
forgiveness application. Correct?
4
A I don't -- I don't -- I don't know that answer
5
to that question.
6
Q Well you had to apply in July. Correct?
7
A I don't remember.
8
Q We just looked at an application you submitted
9
to Fountainhead in July. Correct? Of 2021?
10
A "Would you be so kind as to checking the
11
Fountainhead on the PPP loan forgiveness for JMG
12
Investments? It'll be going on a year now." I don't
13
know. I -- I don't -- I don't know that.
14
Q Well we just looked at an application from
15
Fountainhead that you submitted for forgiveness on July
16
19, 2021. Correct? It was Exhibit 29, if you need to
17
look at it again.
18
A PPP loan forgiveness. Okay. Seven -- yeah,
19
that was July 19th. Okay.
20
Q Okay. And those two emails we just looked at
21
were from below before July 19, 2021. Correct?
22
A Correct.
23
Q So you had an outstanding application for
24
forgiveness before July 19, 2021, with Fountainhead.
25
Correct?
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Jeffrey Schwartz
August 6, 2025
1
A Correct.
2
Q And you had to reapply on July 19, 2021.
3
Correct?
4
A Correct.
5
Q So do you know why Fountainhead denied your
6
initial application for forgiveness?
7
A I'm not -- I haven't a clue. No.
8
MR. GALLAGHER: I think we're at a good
9
breaking point, and I don't think I have much left,
10
Rick. I might have a few more questions after, but --
11
MR. RODGERS: Okay.
12
MR. GALLAGHER: So we can go off the
13
record.
14
MR. RODGERS: I'm going to jump into --
15
THE VIDEOGRAPHER: The time is 12:41.
16
We're going off record.
17
(Off the record.)
18
THE VIDEOGRAPHER: The time is 12:47, and
19
we're back on the record.
20
MR. GALLAGHER: All right, Mr. Schwartz,
21
I don't have any more answers for you at this time,
22
though I may have some after your attorney's --
23
MR. RODGERS: Questions.
24
MR. GALLAGHER: -- done asking you some
25
questions.
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ID #:566
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ID #:567
Jeffrey Schwartz
August 6, 2025
1
Rick Rogers, Esq.
2
rar@lawsdr.com
3
August 21, 2025
4
RE: United States Of America, Ex Rel. Bryan Quesenberry v. JMG
5
8/6/2025, Jeffrey Schwartz (#7449664)
6
The above-referenced transcript is available for
7
review.
8
Within the applicable timeframe, the witness should
9
read the testimony to verify its accuracy. If there are
10
any changes, the witness should note those with the
11
reason, on the attached Errata Sheet.
12
The witness should sign the Acknowledgment of
13
Deponent and Errata and return to the deposing attorney.
14
Copies should be sent to all counsel, and to Veritext at
15
(Erratas-CS@veritext.com).
16
Return completed errata within 30 days from
17
receipt of testimony.
18
If the witness fails to do so within the time
19
allotted, the transcript may be used as if signed.
20
21
22
Yours,
23
Veritext Legal Solutions
24
25
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ID #:568
Jeffrey Schwartz
August 6, 2025
1
United States Of America, Ex Rel. Bryan Quesenberry v. JMG
2
Jeffrey Schwartz (#7449664)
3
E R R A T A S H E E T
4
PAGE_____ LINE_____ CHANGE________________________
5
__________________________________________________
6
REASON____________________________________________
7
PAGE_____ LINE_____ CHANGE________________________
8
__________________________________________________
9
REASON____________________________________________
10
PAGE_____ LINE_____ CHANGE________________________
11
__________________________________________________
12
REASON____________________________________________
13
PAGE_____ LINE_____ CHANGE________________________
14
__________________________________________________
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REASON____________________________________________
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PAGE_____ LINE_____ CHANGE________________________
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__________________________________________________
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REASON____________________________________________
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PAGE_____ LINE_____ CHANGE________________________
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__________________________________________________
21
REASON____________________________________________
22
23
________________________________ _______________
24
Jeffrey Schwartz Date
25
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ID #:569
Jeffrey Schwartz
August 6, 2025
1
United States Of America, Ex Rel. Bryan Quesenberry v. JMG
2
Jeffrey Schwartz (#7449664)
3
ACKNOWLEDGEMENT OF DEPONENT
4
I, Jeffrey Schwartz, do hereby declare that I
5
have read the foregoing transcript, I have made any
6
corrections, additions, or changes I deemed necessary as
7
noted above to be appended hereto, and that the same is
8
a true, correct and complete transcript of the testimony
9
given by me.
10
11
______________________________ ________________
12
Jeffrey Schwartz Date
13
*If notary is required
14
SUBSCRIBED AND SWORN TO BEFORE ME THIS
15
______ DAY OF ________________, 20___.
16
17
18
__________________________
19
NOTARY PUBLIC
20
21
22
23
24
25
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ID #:570
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