Separate Statement of Uncontroverted Facts -- Quesenberry v. JMG Investments

Record facts

U.S. District Court for the Central District of California · No. 2:20-cv-08497-MWF-AS · Doc. 75-1 · 2025-11-17 · Docket on CourtListener

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BRETT A. SHUMATE 
Assistant Attorney General, Civil Division 
BILAL A. ESSAYLI  
First Assistant United States Attorney 
DAVID M. HARRIS, AUSA 
Chief, Civil Division 
HUNTER B. THOMSON 
Acting Chief, Civil Fraud Section 
PAUL B. LA SCALA (Cal. Bar No. 186939) 
Assistant United States Attorney 
Federal Building, Suite 7516 
300 North Los Angeles Street 
Los Angeles, California 90012 
Telephone: (213) 894-2467 
Facsimile: (213) 894-7819 
E-mail: Paul.LaScala@usdoj.gov  
JAMIE ANN YAVELBERG 
COLIN M. HUNTLEY 
JARED S. WIESNER 
PADEN GALLAGHER 
Attorneys, Civil Division 
United States Department of Justice 
 
P.O. Box 261, Ben Franklin Station 
 
Washington, D.C. 20044 
 
Tel: (202) 353-1274 
 
Fax: (202) 616-3085 
 
Email: Jared.S.Wiesner@usdoj.gov 
Attorneys for the United States of America 
 
UNITED STATES DISTRICT COURT 
 
FOR THE CENTRAL DISTRICT OF CALIFORNIA 
 
 
UNITED STATES, ex rel. BRYAN 
QUESENBERRY, 
Plaintiff, 
v. 
JMG INVESTMENTS, INC., and 
JEFFREY SCHWARTZ, 
 
Defendants. 
 
 
 No. 2:20−cv−08497−MWF−AS 
 
SEPARATE STATEMENT OF 
UNCONTROVERTED FACTS IN 
SUPPORT OF MOTION FOR 
SUMMARY JUDGMENT 
[Notice of Motion and Motion for Summary 
Judgment, Memorandum of Points and 
Authorities in Support Thereof, 
Declarations, and (Proposed) Judgment 
filed concurrently herewith] 
Hearing Date: 
December 15, 2025 
Hearing Time: 
10:00 AM 
Courtroom:          5A 
 
 
 
Case 2:20-cv-08497-MWF-AS     Document 75-1     Filed 11/17/25     Page 1 of 15   Page ID
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Pursuant to Federal Rule of Civil Procedure 56 and Local Rule 56-1, plaintiff 
United States of America (“United States”) submits this Separate Statement of 
Uncontroverted Facts In Support of Its Motion for Summary Judgment.  
SEPARATE STATEMENT OF UNCONTROVERTED FACTS (“SUF”) 
NO. UNDISPUTED FACT 
EVIDENCE 
1 
The PPP was launched by the 
United States Small Business 
Administration (“SBA”) on 
April 3, 2020.   
Paycheck Protection Program, 85 Fed. Reg. 
20811, 20812 (Apr. 15, 2020); SBA Press 
Release No. 20-30, SMALL BUS. ADMIN. 
(Apr. 3, 2020), 
https://www.sba.gov/article/2020/apr/03/sbas-
paycheck-protection-program-small-
businesses-affected-coronavirus-pandemic-
launches (last visited August 7, 2025). 
2 
In order to obtain a PPP loan, a 
qualifying business, through its 
authorized representative, 
signed and submitted a PPP 
loan application to the lender 
with delegated authority from 
SBA, using SBA Form 2483 
(hereafter “Application Form 
2483”) or a lender’s equivalent.  
Declaration of Martin Andrews (“Andrews 
Decl.”) ¶¶ 9-10. 
3 
Application Form 2483 or the 
lender’s equivalent required the 
applicant to acknowledge the 
PPP program rules and make 
certain affirmative 
certifications regarding 
program eligibility. 
Andrews Decl. ¶¶ 10-13. 
4 
Application Form 2483 or the 
lender’s equivalent required 
applicants to certify that 
“[d]uring the period beginning 
on February 15, 2020 and 
ending on December 31, 2020, 
the Applicant has not and will 
not receive another loan under 
the Paycheck Protection 
Andrews Decl. ¶¶ 11-12. 
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NO. UNDISPUTED FACT 
EVIDENCE 
Program.” 
5 
If a borrower did not agree to 
the certification regarding not 
receiving multiple PPP loans in 
2020 on the application, the 
borrower would not receive a 
PPP loan. 
Andrews Decl. ¶¶ 11-13; Declaration of 
Paden Gallagher (“Gallagher Decl.”) ¶ 2, Ex. 
A (“May 7, 2020, JMG Fountainhead Loan 
Application”) at 2 (noting that the applicant 
“must certify in good faith” to the multiple 
loan certification). 
6 
Defendant Jeffrey Schwartz is 
the sole owner of Defendant 
JMG Investments, Inc. 
(hereinafter “JMG”) 
Gallagher Decl. ¶ 3, Ex. B (“Schwartz Dep.”) 
16:12-14. 
7 
Defendant JMG received two 
PPP loans during the period 
beginning on February 15, 
2020, and ending on December 
31, 2020. 
Gallagher Decl. ¶ 4, Ex. C (“JMG RFA”) 
Response to Admission No. 12. 
8 
On or about April 8, 2020, 
Defendant JMG submitted a 
PPP Application to lender Bank 
of America seeking a PPP loan. 
Gallagher Decl. ¶ 4, Ex. C (JMG RFA) 
Response to Admission Nos. 1 and 4. 
9 
The PPP loan from Bank of 
America was assigned loan 
number 4670757309 
(hereinafter “Bank of America 
Loan”). 
Andrews Decl. ¶ 18; Gallagher Decl. ¶ 4, Ex. 
C (JMG RFA) Response to Admission No. 4. 
10 
Defendant Schwartz digitally 
signed the PPP Application that 
was submitted to Bank of 
America on behalf of 
Defendant JMG. 
Gallagher Decl. ¶ 5, Ex. D (“JMG Bank of 
America Paycheck Protection Program (PPP) 
Loan Application”) at 4. 
11 
In submitting its PPP 
application to Bank of America 
on behalf of Defendant JMG, 
Defendant Schwartz certified 
the following: “During the 
period beginning on February 
15, 2020 and ending on 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
34:17-36:6; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 2; 
Gallagher Decl. ¶ 5, Ex. D (JMG Bank of 
America Paycheck Protection Program (PPP) 
Loan Application) at 3. 
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NO. UNDISPUTED FACT 
EVIDENCE 
December 31, 2020, the 
Applicant has not and will not 
receive another loan under the 
Paycheck Protection Program.” 
12 
Defendant Schwartz read the 
certification before making it. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
36:3-38:4. 
13 
On May 7, 2020, Defendant 
JMG submitted Application 
Form 2483 to lender 
Fountainhead SBF LLC 
(“Fountainhead”) seeking a 
PPP loan of $501,588. 
Gallagher Decl. ¶ 4, Ex. C (JMG RFA) 
Response to Admission No. 5; Gallagher 
Decl., ¶ 2, Ex. A (May 7, 2020, JMG 
Fountainhead Loan Application). 
14 
The PPP loan from 
Fountainhead was assigned 
loan number 3948257400 
(hereinafter “Fountainhead 
Loan”). 
Andrews Decl. ¶ 8; Gallagher Decl. ¶ 4, Ex. C 
(JMG RFA) Response to Admission No. 10. 
15 
Defendant Schwartz signed the 
Application Form 2483 that 
was submitted to Fountainhead 
on behalf of Defendant JMG. 
Gallagher Decl., ¶ 2, Ex. A (May 7, 2020, 
JMG Fountainhead Loan Application) at 2; 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
34:17-35:21. 
16 
In submitting Application Form 
2483 to Fountainhead on behalf 
of Defendant JMG, Defendant 
Schwartz placed his initials 
next to the following 
certification: “During the 
period beginning on February 
15, 2020 and ending on 
December 31, 2020, the 
Applicant has not and will not 
receive another loan under the 
Paycheck Protection Program.” 
Gallagher Decl., ¶ 2, Ex. A (May 7, 2020, 
JMG Fountainhead Loan Application) at 2; 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
34:17-35:21; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 6. 
17 
Defendant Schwartz read the 
certification before placing his 
initials next to it and signing 
the form. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
36:22-38:4. 
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NO. UNDISPUTED FACT 
EVIDENCE 
18 
The Application Form 2483 
which Defendant Schwartz 
signed and submitted to 
Fountainhead on behalf of 
Defendant JMG contained the 
following statement: “I certify 
that: I have read the statements 
included in this form, including 
the Statements Required by 
Law and Executive Orders, and 
I understand them.” 
Gallagher Decl., ¶ 2, Ex. A (May 7, 2020, 
JMG Fountainhead Loan Application) at 2. 
19 
The Application Form 2483 
which Defendant Schwartz 
submitted to Fountainhead on 
May 7, 2020, listed borrower 
JMG’s Business Tax 
Identification Number 
inaccurately, with one number 
changed. 
Andrews Decl. ¶ 21; Gallagher Decl. ¶ 6, Ex. 
E (“Grieder Dep.”) 68:18-69:13, 79:17-81:14. 
20 
The application for Defendant 
JMG’s Bank of America Loan 
listed borrower JMG’s 
Business Tax Identification 
Number accurately. 
Andrews Decl. ¶ 19. 
21 
Defendant Schwartz knows 
JMG’s Employer Identification 
Number “off the top of [his] 
head.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
16:4-11. 
22 
Defendant Schwartz also 
prepared and signed an 
additional Application Form 
2483 on May 6, 2020, 
containing the same 
certifications as the other PPP 
loan applications. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
36:7-38:4. 
23 
In calculating the requested 
loan amounts for both the Bank 
of America Loan and 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
23:16-24:10; 28:22-29:1; 32:18-34:9. 
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NO. UNDISPUTED FACT 
EVIDENCE 
Fountainhead Loan, Defendants 
utilized the same payroll for the 
same employees for both loans. 
24 
On May 8, 2020, an agent at 
Commercial Finance Partners, 
who acted as the broker for 
Fountainhead, emailed 
Defendant Schwartz: “You 
have a loan number with us and 
Fountainhead- congrats! You 
will receive a request for follow 
up documents within a few 
days, but you have reserved 
your ‘slice of the pie.’” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
47:3-48:6; Gallagher Decl. ¶ 6, Ex. E (Grieder 
Dep.) 65:4-11 (noting that Darren Palestine at 
Commercial Finance Partners “acted as the 
broker” for Fountainhead); Gallagher Decl. ¶ 
7, Ex. F (“May 8, 2020 Email Thread”) at 1. 
25 
Defendant Schwartz explained 
that he understood the May 8, 
2020, email to mean that “[his] 
loan had gone through.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
47:16-25. 
26 
Defendant Schwartz did not 
withdraw Defendant JMG’s 
application for the Bank of 
America Loan despite believing 
that the Fountainhead Loan 
“had gone through” after seeing 
the May 8, 2020, email. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
47:16-48:10. 
27 
On May 12, 2020, Defendant 
Schwartz received an email 
from a representative of 
Fountainhead informing him: 
“Congratulations! Your PPP 
loan has been approved with 
the SBA.”  The email further 
requested information to 
“prepare everything for 
closing” on the loan.  
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
48:11-49:21; Gallagher Decl. ¶ 8, Ex. G 
(“May 14, 2020 Email Thread”) at 2. 
28 
Defendants did not withdraw 
their application for the Bank 
of America Loan despite 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
49:3-6. 
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NO. UNDISPUTED FACT 
EVIDENCE 
receiving an email stating that 
the Fountainhead Loan “ha[d] 
been approved with the SBA” 
on May 12, 2020. 
29 
Defendant Schwartz provided 
the requested information for 
closing on the Fountainhead 
Loan on May 14, 2020. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
49:7-51:11; Gallagher Decl. ¶ 8, Ex. G (May 
14, 2020 Email Thread) at 1. 
30 
If Defendant Schwartz “never 
would have sent those wiring 
instructions, [Fountainhead] 
wouldn’t have been able to 
fund” the Fountainhead Loan. 
Gallagher Decl. ¶ 6, Ex. E (Grieder Dep.) 
42:13-43:3. 
31 
Defendants did not withdraw 
their application for the Bank 
of America Loan despite 
sending the closing information 
for the Fountainhead Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
51:7-11. 
32 
On May 15, 2020, Defendant 
Schwartz signed a promissory 
note to receive the Bank of 
America Loan, without which 
Defendant Schwartz admitted 
he did not believe Bank of 
America would have “given 
[him] a PPP loan.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
45:9-47:2; Gallagher Decl. ¶ 9, Ex. H (“Bank 
of America PPP Loan Promissory Note”) at 6. 
33 
On May 15, 2020, Defendant 
JMG received the proceeds of 
the $505,987 PPP loan from 
Bank of America. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
45:6-8; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 4. 
34 
Despite receiving the proceeds 
from the Bank of America 
Loan on May 15, 2020, 
Defendants did not withdraw 
their application for the 
Fountainhead Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
51:12-18. 
35 
Despite receiving the proceeds 
Gallagher Decl. ¶ 4, Ex. C (JMG RFA) 
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NO. UNDISPUTED FACT 
EVIDENCE 
from the Bank of America 
Loan on May 15, 2020, 
Defendant JMG did not inform 
SBA that they received a 
second PPP loan prior to 
December 31, 2020. 
Response to Admission No. 13. 
36 
On May 19, 2020, Defendant 
Schwartz moved the Bank of 
America Loan funds from one 
account to another with the 
help of an agent of Bank of 
America. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
53:9-54:10. 
37 
On May 21, 2020, Defendants 
used funds from the Bank of 
America Loan to pay payroll 
for Defendant JMG’s 
employees. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
54:15-55:2. 
38 
Defendants did not withdraw 
their application for the 
Fountainhead Loan despite 
moving the Bank of America 
Loan funds from one account to 
another and then spending 
them. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
54:11-55:6. 
39 
On May 22, 2020, Defendant 
Schwartz signed and submitted 
several documents to 
Fountainhead SBF to secure the 
Fountainhead Loan despite 
having already received the 
proceeds of the Bank of 
America Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
58:1-63:22; Gallagher Decl. ¶ 9, Ex. I (“JMG 
Fountainhead Loan Closing Documents”). 
40 
Defendant Schwartz admitted 
that among the documents 
Defendant Schwartz signed and 
submitted on May 22, 2020, 
was a “Borrower Certification 
and Agreement,” which he 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
61:13-62:8; Gallagher Decl. ¶ 9, Ex. I (JMG 
Fountainhead Loan Closing Documents) at 
13. 
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NO. UNDISPUTED FACT 
EVIDENCE 
signed “to induce Fountainhead 
to provide [him] with a PPP 
loan.” 
41 
Defendant Schwartz certified in 
the “Borrower Certification and 
Agreement” the following: 
“Borrower acknowledges that if 
the Borrower defaults on the 
loan, SBA may be required to 
pay Lender under the SBA 
guarantee, and SBA may then 
seek recovery on the loan (to 
the extent any balance remains 
after loan forgiveness).” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
77:9-20; Gallagher Decl. ¶ 9, Ex. I (JMG 
Fountainhead Loan Closing Documents) at 
13. 
42 
Defendant Schwartz admitted 
that among the documents 
Defendant Schwartz signed and 
submitted on May 22, 2020, 
was a promissory note. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
62:9-63:1; Gallagher Decl. ¶ 9, Ex. I (JMG 
Fountainhead Loan Closing Documents) at 
14-19. 
43 
Defendant Schwartz admitted 
that among the documents 
Defendant Schwartz signed and 
submitted on May 22, 2020, 
was a “U.S. Small Business 
Settlement Sheet.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
63:16-22; Gallagher Decl. ¶ 9, Ex. I (JMG 
Fountainhead Loan Closing Documents) at 
22-23. 
44 
As explained in the instructions 
of the “U.S. Small Business 
Settlement Sheet,” a lender, 
like Fountainhead, “must 
submit the completed form and 
all supporting documentation to 
SBA upon request, or, in the 
event of a loan default, with the 
Lender’s request for guaranty 
purchase.” 
Gallagher Decl. ¶ 9, Ex. I (JMG Fountainhead 
Loan Closing Documents) at 22. 
45 
In the “U.S. Small Business 
Settlement Sheet,” Defendant 
Schwartz certified at the “time 
Gallagher Decl. ¶ 9, Ex. I (JMG Fountainhead 
Loan Closing Documents) at 23. 
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NO. UNDISPUTED FACT 
EVIDENCE 
of completion of this form”: 
“There has been no unremedied 
adverse change in the 
Borrower’s or Operating 
Company’s financial condition, 
organization, management, 
operations or assets since the 
date of the application that 
would warrant withholding or 
not making this disbursement 
or any further disbursement.” 
46 
On May 22, 2020, Defendant 
JMG received the proceeds of 
the $501,588 PPP loan from 
Fountainhead SBF. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
56:5-57:25; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 10. 
47 
After the JMG Fountainhead 
PPP Loan was disbursed, SBA 
paid lender Fountainhead a 
processing fee of 3% of the 
loan amount, or $15,047.46 
Andrews Declaration ¶ 22. 
48 
If SBA had known that 
Defendant JMG had already 
received the Bank of America 
Loan, Defendant JMG would 
not have been approved for a 
second PPP loan in 2020.  
Andrews Decl. ¶ 16. 
49 
Defendants did not pay back 
the Fountainhead Loan after 
receiving it on May 22, 2020, 
despite having already received 
and begun spending the Bank 
of America Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
45:2-5; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 14. 
50 
Lori Grieder was someone 
hired by Defendants to 
“introduce[e] Mr. Schwartz to . 
. . . Commercial Finance who 
acted as the broker . . . for the 
Fountainhead PPP borrower 
Gallagher Decl. ¶ 6, Ex. E (Grieder Dep.) 
64:23-66:22. 
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NO. UNDISPUTED FACT 
EVIDENCE 
application and facilitate[e] 
communications regarding the 
status of Mr. Schwartz's 
Fountainhead loan.” 
51 
On June 8, 2020, Defendant 
Schwartz sent an email to Ms. 
Grieder stating: “I am not 
worried about any confusion 
with where and how I got this 
PPP loan.  But what I am 
worried about is the fact that 
two weeks after I applied for 
this loan, I did, in fact, remind 
you via email, that I received 
my loan through Bank of 
America. I was extremely 
surprised when the money was 
deposited into my Chase 
account. I have absolutely no 
problem paying you the 
$10,032, but before I pay you I 
would like an email or letter 
from you stating that if, in fact, 
I am forced to pay that loan 
back to the SBA (Chase), you 
will reimburse me for the 
$10,032 that I am paying you in 
advance.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
39:3-40:13; Gallagher Decl. ¶ 11, Ex. J (“June 
9, 2020 Email Thread”) at 1. 
52 
When asked what he “meant” 
when he wrote on June 8, 2020 
that he “was extremely 
surprised when the money was 
deposited into my Chase 
account, Defendant Schwartz 
testified under oath: “Well I 
knew – I knew that I was – I 
was only supposed to get one 
PPP loan, and then all of a 
sudden the loan from 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) at 
41:9-43:13. 
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NO. UNDISPUTED FACT 
EVIDENCE 
Fountainhead came through. I 
wasn't expecting it because I 
had already received the loan 
from Bank of America.” 
53 
Defendant Schwartz spoke on 
the phone with Lori Grieder 
after sending the June 8, 2020, 
email.  In that conversation, he 
stated: “If I happen to have to 
pay them back, I'm going to put 
the money aside.” 
Gallagher Decl. ¶ 6, Ex. E (Grieder Dep.) 
33:16-37:23, 43:8-18. 
54 
Defendants did not pay back 
either PPP loan that Defendant 
JMG received after that June 8, 
2020, correspondence. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
45:2-5; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 14. 
55 
Defendant Schwartz understood 
that if a PPP loan was forgiven, 
it would mean that Defendants 
would not need to repay the 
PPP loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
65:22-66:5. 
56 
Defendants applied for 
forgiveness on both the Bank of 
America Loan and the 
Fountainhead Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
66:6-8; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission Nos. 16 & 19. 
57 
Defendant JMG applied for 
forgiveness on the Bank of 
America Loan on November 
30, 2020. 
Gallagher Decl. ¶ K, (“JMG Bank of America 
Loan Forgiveness Application) at 12; 
Gallagher Decl. ¶ 4, Ex. C (JMG RFA) 
Response to Admission No. 16. 
58 
The Bank of America Loan was 
forgiven in February 2021. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
68:10-13. 
59 
Defendant Schwartz was aware 
that the Bank of America Loan 
was forgiven in February 2021. 
Andrews Decl. ¶ 24; Gallagher Decl. ¶ 3, Ex. 
B (Schwartz Dep.) 68:14-16. 
60 
Defendant JMG applied for 
forgiveness on the 
Fountainhead Loan on July 19, 
2021. 
Gallagher Decl. ¶ 13, Ex. L (“JMG 
Fountainhead PPP Loan Forgiveness 
Application”); Gallagher Decl. ¶ 4, Ex. C 
(JMG RFA) Response to Admission No. 19. 
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EVIDENCE 
61 
Defendant JMG also applied 
for forgiveness on the 
Fountainhead Loan at some 
point before July 19, 2021, 
which was denied. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
86:7-87:15, 89:2-90:7. 
62 
Defendant Schwartz wrote in 
an email on April 20, 2022, that 
“Fountainhead told [him] that 
they can only accept one PPP 
per year from any account so 
they are rejecting the 
forgiveness on that loan but 
will give [him] 5 years to pay it 
back.” 
Gallagher Decl. ¶ 14, Ex. M (“April 21, 2022 
Email Thread”) at 1.  
63 
Despite being told by 
Fountainhead by April 20, 
2022, that the Fountainhead 
Loan would not be forgiven 
and Defendants would need to 
pay it back, Defendants did not 
pay back the loan to 
Fountainhead. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
74:21-75:6; Gallagher Decl. ¶ 4, Ex. C (JMG 
RFA) Response to Admission No. 20. 
64 
After Fountainhead informed 
Defendant Schwartz that they 
were rejecting forgiveness on 
the Fountainhead Loan, 
Schwartz emailed Lori Grieder: 
“Why not try to get them to 
forgive it this year 2022.  We 
do not have one this year.” 
Gallagher Decl. ¶ 14, Ex. M (April 21, 2022 
Email Thread) at 1. 
65 
On July 12, 2022, Defendant 
Schwartz received an email 
sent by Fountainhead and 
forwarded to him by Lori 
Grieder explaining that his 
forgiveness application was 
“pending.”  The email further 
explained: “This would be the 
3rd loan.  SBA allows for 1-1st 
Gallagher Decl. ¶ 6, Ex. E (Grieder Dep.) 
53:14-54:23; Gallagher Decl. ¶ 15, Ex. N 
(“July 12, 2022 Email Thread”) at 1. 
Case 2:20-cv-08497-MWF-AS     Document 75-1     Filed 11/17/25     Page 13 of 15   Page
ID #:501

 
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NO. UNDISPUTED FACT 
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draw and 1-2nd draw.  Your 
account shows 2-1st draw and 1 
-2nd draw.  You have a 1st 
draw and a 2nd draw that both 
show ‘Paid in Full.’” 
66 
Instead of forgiving the loan, 
Fountainhead SBF charged off 
the Fountainhead Loan to the 
SBA. 
Andrews Decl. ¶ 25 (“SBA purchased the 
JMG Fountainhead PPP Loan from the lender 
for $501,588, plus interest, pursuant to SBA’s 
guaranty on or around July 2022.”); Gallagher 
Decl. ¶ 3, Ex. B (Schwartz Dep.) 75:7-10. 
67 
In November 2022, 
Fountainhead submitted 
Defendants’ July 19, 2021 
forgiveness application to SBA 
despite SBA having purchased 
the guaranty.   
Andrews Decl. ¶ 26. 
68 
Because SBA utilizes a “two-
step process involving 
automated screening of all 
loans at the outset, followed by 
manual forgiveness review of a 
limited number of loans 
selected for further review” to 
determine if a loan is eligible 
for forgiveness, and because 
the Fountainhead Loan 
“underwent the automated 
review stage and was not 
chosen for manual forgiveness 
review,” SBA ultimately 
reclassified the Fountainhead 
Loan from guaranteed 
purchased to forgiven.   
Andrews Decl. ¶ 28. 
69 
If SBA had known that 
Defendant JMG had already 
received the Bank of America 
Loan, it would not have 
forgiven the Fountainhead 
Loan. 
Andrews Decl. ¶ 30. 
Case 2:20-cv-08497-MWF-AS     Document 75-1     Filed 11/17/25     Page 14 of 15   Page
ID #:502

 
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NO. UNDISPUTED FACT 
EVIDENCE 
70 
When questioned about the 
certification in the “Borrower 
Certification and Agreement” 
that Defendant Schwartz made 
on May 22, 2020, Defendant 
Schwartz acknowledged that he 
“knew that if Fountainhead 
charged off that loan, [he] 
would then have an obligation 
to repay those loan funds to the 
government.” 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
77:5-23. 
71 
Defendants have not paid back 
the Fountainhead Loan. 
Gallagher Decl. ¶ 3, Ex. B (Schwartz Dep.) 
73:22-75:6. 
72 
Defendants have admitted that 
they “do not assert any right to 
retain the proceeds of the 
[Fountainhead Loan].” 
Dkt. 57 at 6. 
 
Dated: November 17, 2025 
 
Respectfully submitted, 
 
BRETT A. SHUMATE 
Assistant Attorney General, Civil Division 
BILAL A. ESSAYLI 
First Assistant United States Attorney 
DAVID M. HARRIS 
Assistant United States Attorney 
Chief, Civil Division 
HUNTER B. THOMSON 
Acting Chief, Civil Fraud Section 
PAUL B. LA SCALA 
Assistant United States Attorney 
JAMIE ANN YAVELBERG 
COLIN M. HUNTLEY 
JARED S. WIESNER 
PADEN GALLAGHER 
Attorneys, Civil Division 
 
 
 /s/ Paden Gallagher                                                   
PADEN GALLAGHER 
Trial Attorney 
 
Attorneys for the United States of America 
Case 2:20-cv-08497-MWF-AS     Document 75-1     Filed 11/17/25     Page 15 of 15   Page
ID #:503

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