JOINT RULE 26(f) CONFERENCE REPORT
- Date
- 2025-05-02
Summary
A Joint Rule 26(f) Conference Report filed May 2, 2025 as Document 87 in United States of America ex rel. Paul Pietschner v. Kathryn Petralia, Robert Frohwein and Spencer Robinson, Civil Action No. 4:21-cv-110-SDJ, in the U.S. District Court for the Eastern District of Texas, Sherman Division. The report sets out the Government's synopsis, which alleges the defendants, executives of Kabbage, Inc., caused false claims to the Small Business Administration over Paycheck Protection Program loans under 31 U.S.C. §§ 3729–3733, and the defendants' synopsis disputing those claims. It notes pending motions to dismiss (ECF Nos. 65, 66, 67, and 68), a related bankruptcy case, No. 22-10951, and initial disclosures served April 28, 2025. The parties propose schedules with a trial date in November 2026 (defendants) or April 2027 (Government). The report closes with counsel signature blocks.
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Case 4:21-cv-00110-SDJ Document 87 Filed 05/02/25 Page 1 of 15 PageID #: 892
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
UNITED STATES OF AMERICA
ex rel. PAUL PIETSCHNER,
Plaintiff,
Civil Action No.: 4:21-cv-110-SDJ
v.
KATHRYN PETRALIA;
ROBERT FROHWEIN; and
SPENCER ROBINSON,
Defendants.
JOINT RULE 26(f) CONFERENCE REPORT
TO THE HONORABLE UNITED STATES DISTRICT JUDGE:
COME NOW, Plaintiff United States of America (“United States” or the “Government”),
Relator Paul Pietschner (“Relator”), and Defendants Kathryn Petralia, Robert Frohwein, and
Spencer Robinson (collectively referred to as the “Parties”), and file this Joint Report pursuant to
this Court’s Order Governing Proceedings, ECF No. 69:
1. A brief factual and legal synopsis of the case.
This is an action against three executives of a former financial technology company,
Kabbage, Inc., that participated in the Paycheck Protection Program (“PPP”) as a direct lender and
processor of PPP loans beginning in April 2020. The United States seeks to recover treble damages
and civil penalties under the False Claims Act, 31 U.S.C. §§ 3729–3733 (“FCA”), and to recover
on federal common law or equitable causes of action for payment by mistake and unjust
enrichment. Specifically, the Government’s Complaint in Intervention (“Government’s
Complaint”) alleges that Frohwein, Petralia, and Robinson (collectively “Defendants”), violated
the FCA by submitting, causing the submission of, and conspiring to submit false claims and
statements to the United States Small Business Administration (“SBA”) for payment of processing
fees and forgiveness and guaranty payments of certain PPP loans.
The United States has intervened in this qui tam action, originally filed by Relator in 2021
under 31 U.S.C. § 3730(b), against Kabbage, Inc. (“Kabbage”) and Defendants. See ECF Nos. 1,
28, 34. Kabbage is no longer a part of this action, as it settled its liability with the United States
in 2024 and was dismissed by stipulation. See ECF Nos. 30. 31. Because the Government has
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intervened as to all claims against Defendants, “it shall have the primary responsibility for
prosecuting the action.” 31 U.S.C. § 3730(c)(1). The Relator is not independently pursuing any
non-intervened claims in this litigation.
Pending before the Court are the Defendants’ joint and individual motions to dismiss. ECF
Nos. 65, 66, 67, and 68 (the “Dismissal Motions”). Defendants argue that the Government has not
pleaded any claim with the requisite specificity of Fed. R. Civ. P 9(b), and also seek dismissal of
this action under Fed. R. Civ. P. 12(b)(2) and (3), contending that this Court is not a proper venue
for this action and that this Court lacks personal jurisdiction over Defendants. The Government
has filed its Omnibus Response in Opposition to Defendants’ motions to dismiss. ECF No. 72 (the
“Opposition”). Briefing on these motions is due to complete by May 30, 2025. ECF No. 64.
Government’s Factual Synopsis
The United States alleges that Defendants knowingly directed and controlled Kabbage to
inflate PPP loan amounts by systematically double-counting employees’ state and local taxes and
by including annual per employee compensation in excess of $100,000 in calculating borrowers’
average monthly payroll; to approve loans without confirming receipt of information
demonstrating that borrowers had employees for whom the borrowers paid salaries and payroll
taxes; and to participate in the PPP without sufficient fraud controls as required to comply with
PPP requirements.
At all relevant times, Frohwein, Petralia, and Robinson were, respectively, CEO, President,
and Head of Strategy at Kabbage. Defendants caused Kabbage to participate in PPP to save the
company from financial distress and used PPP to increase Kabbage’s value in preparation of an
asset sale, from which Defendants earned lucrative payouts. As described in detail in the
Government’s Complaint, each Defendant was repeatedly warned by third parties and its own
employees that its PPP loan calculation methodology was systematically miscalculating PPP loan
amounts, yet they chose to do nothing to investigate or fix the calculation. Additionally, each
Defendant knew prior to PPP that its fraud controls and identity verification were insufficient, and
each was warned by Kabbage employees that Kabbage’s review processes for PPP resulted in the
approval of obviously fraudulent and ineligible borrowers, yet, they again chose to do nothing.
Rather they expressly declined to pause processing of PPP loan applications. As a result of their
conduct, Defendants knowingly submitted, caused the submission of, and conspired to submit
thousands of false or fraudulent claims and statements to the United States, which resulted in the
SBA’s payment of millions of dollars for processing fees and loan forgiveness and guaranty
purchase payments on PPP loans that were ineligible for payment. The United States also alleges
that Defendants were unjustly enriched as a result of their conduct, and the United States made
payments by mistake for which Defendants are individually liable.
As stated more fully in the Opposition, this Court has personal jurisdiction over defendants
and venue lies in this district. This Court has venue and personal jurisdiction over all defendants
in this action under Fed. R. Civ. Pro. 4(k)(1)(C) and 31 U.S.C. § 3732(a), which extends
nationwide service of process to a federal court in “any judicial district in which . . . any one
defendant can be found, resides, transacts business, or in which any act proscribed by section 3729
occurred.” When Relator filed his Complaint in 2021, Kabbage, then a defendant, was transacting
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business in this district at the time; in addition, the Complaint alleges FCA violations that occurred
in this judicial district. See 31 U.S.C. § 3732(a). Constitutional due process is satisfied under the
applicable national contacts analysis because all Defendants are U.S. residents.
Contrary to the arguments in Defendants’ Synopsis, below, the Government has
sufficiently alleged all the elements of its FCA and common law claims, for the reasons stated in
the Opposition. Defendants’ Synopsis generally ignores allegations about the systematic loan
calculation errors that occurred with Defendants’ knowledge and under Defendants’ direction and
control. As to particular elements, first, the Government has sufficiently alleged materiality under
the False Claims Act and the Supreme Court’s opinion in Universal Health Servs., Inc. v. United
States ex rel. Escobar, 579 U.S. 176, 193 (2016), which requires a holistic analysis. Not only did
the false statements and certifications that Defendants submitted and caused have a tendency to
influence SBA’s payment decision, as required under the FCA, but they also satisfy Escobar’s
materiality standard, where they are violations of a condition of payment, implicate millions of
dollars in processing fees and inflated loan amounts, and ran contrary to the essence of the
arrangement between SBA and PPP lenders. Second, the Government has sufficiently alleged a
conspiracy, by alleging facts supporting a reasonable inference that Defendants agreed to commit
FCA violations by submitting false claims to the SBA and alleging at least one act in support of
that conspiracy. Dismissal of the FCA conspiracy claim is not appropriate because specific intent
to defraud is not an element under the FCA, and the intra-corporate conspiracy doctrine does not
and should not apply to FCA cases. Moreover, each Defendant had his or her own personal stake
in Kabbage’s PPP participation and received lucrative payouts as a result of their conduct. Lastly,
the Government has sufficiently alleged its common law claims, unjust enrichment and payment
by mistake, as a direct benefit by the Government to Defendants is not required pursuant to those
doctrines, and the Government has adequately alleged that the Government conferred a benefit on
Defendants in its Complaint.
Defendants’ Synopsis
Defendants dispute the allegations and claims raised in the Complaint, which wrongfully
seek to use the FCA to shift blame for the consequences of the SBA’s design and administration
of the PPP to Defendants, each former executives of the fintech company, Kabbage, which was
founded in 2009 to provide capital to underserved small businesses. In short, Defendants did not
participate in any scheme or conspiracy to defraud the government, nor can they be individually
liable for either Kabbage’s or borrowers’ purported false claims for payment. To establish liability
under the FCA (see Counts I-III), the Government must prove by a preponderance of the evidence:
(i) that Defendants submitted or caused to be submitted a false claim or statement to the
government, (ii) that Defendants’ knew of its falsity, and (ii) that the claim was material to the
Government’s payment decision. The Government cannot satisfy its burden on any element.
Defendants did not knowingly submit or cause to be submitted any false statements or
claims for payment. The SBA directed lenders like Kabbage to relax their underwriting standards,
conduct no more than a “good faith review” of borrower applications, and rely on borrower
attestations in order to get money into the hands of small business as quickly possible. Kabbage
did that and more, using robust controls to detect and report fraud. As far as Defendants knew,
Kabbage’s processes—which were developed by a team of highly-skilled Kabbage employees who
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had deep experience in SBA lending, were in regular contact with the SBA, and carefully reviewed
the SBA guidance—complied with applicable PPP regulations. At company-wide town hall
meetings that Defendants hosted, Defendants and other members of Kabbage’s leadership team
stressed that employees should reject and report suspected PPP fraud, and, to the extent issues or
concerns about Kabbage’s PPP processes were raised to Defendants at town hall meetings or
otherwise, they dealt with them appropriately.
Moreover, Kabbage’s statements or certifications were not material to the Government’s
payment decisions, especially considering the government’s knowledge of the widespread fraud
in the PPP and its continued payments in spite of it. The SBA was well-aware of risks of fraud in
the PPP and nonetheless specifically designed the program to have minimal lending requirements
and a streamlined application process to encourage participation and distribute capital to small
businesses as quickly as possible. By design, the SBA’s streamlined loan application and review
process rested largely on borrower attestations regarding the accuracy of their applications, not
lenders’ statements or certifications. As a result, the Government cannot meet the FCA’s
“rigorous” and “demanding” materiality standard. Universal Health Servs., Inc. v. U.S. ex rel.
Escobar, 579 U.S. 176, 192-94 (2016).
Like its other FCA claims, the Government’s conspiracy claim (Count III) also fails. To
state a conspiracy claim under the FCA, the Government must establish (1) the existence of an
unlawful agreement between defendants to get a false or fraudulent claim allowed or paid, (2) at
least one act performed in furtherance of that agreement, and (3) the Defendants shared specific
intent to defraud the Government. Critically, however, under the intra-corporate conspiracy
doctrine, employees who are acting within the scope of their employment cannot conspire among
themselves. U.S. ex rel. Head v. Kane Co., 798 F. Supp. 2d 186, 201 (D.D.C. 2011) (internal
citation omitted). Because the Defendants were all Kabbage employees and indisputably acting
within the scope of their employment at the time of the alleged conspiracy, the Government’s
conspiracy claim fails as a matter of law.
Equally flawed are the Government’s common law claims for unjust enrichment and
payment by mistake. It is beyond dispute that the SBA paid Kabbage—and not any of the
Defendants, individually—for services Kabbage provided under the PPP. Because the Defendants
did not, and could not have, received any direct benefit from the fees the SBA paid Kabbage, the
Government’s claims for unjust enrichment and payment by mistake also fall flat. See, e.g., U.S.
ex rel. Silva v. VICI Mktg., LLC, 361 F. Supp. 3d 1245, 1257-58 (M.D. Fla. 2019) (dismissing
where defendant did not directly benefit); Gearhart v. Express Scripts, Inc., 422 F. Supp. 3d 1217,
1226-27 (E.D. Ky. 2019) (rejecting unjust enrichment claim where “at least two steps” separated
any benefit from plaintiff to defendant).
2. The jurisdictional basis for this suit.
The Parties agree that this Court has federal question subject matter jurisdiction over this
action arising under the FCA and federal common law pursuant to 28 U.S.C. §§ 1331 and 1345.
Defendants Petralia, Frohwein, and Robinson have each disputed this Court’s personal
jurisdiction over him or her, as set forth in the Dismissal Motions. As stated in its Opposition and
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summarized above, the United States contends that this Court may exercise personal jurisdiction
over all defendants in this action under Fed. R. Civ. Pro. 4(k)(1)(C) and 31 U.S.C. § 3732(a).
While Defendants have separately moved to stay discovery pending the Court’s order on
their legal jurisdictional claims, by submitting this report and/or participating in this Court-
mandated discovery, Defendants do not waive and expressly preserve their objection to this
Court’s personal jurisdiction over them.
3. A list of the correct names of the parties to this action and any anticipated
additional or potential parties.
The Parties’ names are correctly listed in the caption. The Plaintiff is the United States of
America. Defendants are Kathryn Petralia, Robert Frohwein, and Spencer Robinson. The Relator
is Paul Pietschner.
At this time, the United States does not anticipate additional potential parties.
4. A list of any cases related to this case pending in any state or federal court,
identifying the case numbers and courts along with an explanation of the status
of those cases.
In re: K-Servicing Wind Down Corp. et al, No. 22-10951 (D. Del. Bankr.), which is
ongoing with an Omnibus Hearing scheduled for June 2, 2025.
5. Confirmation that the initial disclosures required by Rule 26(a)(1) and this
Order have been completed.
The parties served their initial disclosures on April 28, 2025. The United States will make
its initial disclosure document production on May 2, 2025.
6. Proposed scheduling order deadlines.
Filed as an attachment to this report is a scheduling order with each of the parties’ proposed
schedules. The parties have deviated from the standard schedule by extending certain deadlines
in view of the complexity of the case, the number of defendants and claims at issue in this case,
and the anticipated fact and expert discovery. On the whole, the parties’ proposals extend the case
schedule beyond the Court’s default schedule, with Defendants proposing a trial date in November
2026 and the Government proposing a trial date in April 2027. The parties anticipate that
discovery will be extensive, as reflected by the parties’ joint proposal to conduct more depositions
than provided for by Fed. R. Civ. P. 30(a)(2)(A). To promote efficiency and avoid unnecessary
costs in the event of an early resolution, the parties jointly propose to bifurcate fact and expert
discovery. The parties also seek to provide sufficient time to rule on dispositive motions before
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the parties begin final trial preparation. Finally, the parties seek to extend the Final Pretrial
Conference and anticipated trial date to November 2026 or April 2027. 1
7. Description, in accordance with Rule 26(f), of the following:
(i) The subjects on which discovery may be needed, when discovery should
be completed, and whether discovery should be conducted in phases or
be limited to or focused on particular issues.
The parties do not believe that fact discovery should be conducted in phases or be limited
to or focused on particular issues. The parties have proposed to bifurcate fact and expert discovery.
Defendants propose a January 31, 2026 deadline for the completion of fact discovery; the
Government proposes a deadline of June 4, 2026.
The United States’ Position
Discovery will be needed on all issues raised in the United States’ Complaint, any
amendments thereto, and any defenses raised in Defendants’ answers, including but not limited to
the following subjects:
a. All matters on which Defendants invoked their Fifth Amendment rights;
b. Funds received directly and indirectly by Kabbage and Defendants from the United
States;
c. Communications between Defendants, Kabbage, and any U.S. government official
relating to the PPP;
d. Materials in Defendants’ custody, possession, and control which they may use to
undercut the United States’s claims, to the extent they were not already provided to
the Government in response to Civil Investigative Demands;
e. The number of false or fraudulent claims, and the damages to the United States
from any false or fraudulent claim;
f. Each Defendant’s liability for the conduct alleged in the United States’ Complaint;
g. Whether any Defendant knowingly submitted or caused to be submitted to the SBA
any false or fraudulent claim;
h. Whether any Defendant knowingly made, used, or caused to be made or used, a false
record or statement material to a claim to the SBA relating to the PPP;
1 If the Court grants Defendants’ motion to stay discovery, the parties will submit a
new proposed scheduling order, if necessary, upon the Court’s ruling on Defendants’ jurisdictional
claims.
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i. Whether any Defendant conspired to submit or caused to be submitted any false or
fraudulent claim to the SBA relating to the PPP;
j. Whether any Defendant conspired to make, use, or cause to be made or used, a false
record or statement material to a claim to the SBA relating to the PPP;
k. Whether Kabbage and any Defendant submitted to the SBA claims for PPP loan
processing fees, PPP loan payment, forgiveness, and guaranty, for miscalculated,
inflated loan amounts, fraudulent PPP loans, or PPP loans Kabbage failed to perform
a good faith review of supporting documentation;
l. Communications between Defendants and Kabbage’s lender partners relating to
PPP;
m. Communications between Defendants and Kabbage’s consultants retained to
review Kabbage’s processes relating to PPP;
n. Communications between Defendants relating to American Express and American
Express’s potential acquisition of Kabbage;
o. Defendants’ affirmative defenses; and
p. Expert discovery for disclosed experts.
Discovery of these subjects may result in discovery of third parties, including KServicing Wind
Down Corp. (formerly known as Kabbage, Inc.) and American Express, which is custodian for
many records of Kabbage, Inc.
Defendants’ Position
Defendants require fact discovery on the following subjects: materials that the government
received during the course of its investigation and that form the basis of its complaint; the alleged
false or fraudulent claims submitted to the SBA; specific PPP applications that the government
alleges were falsely submitted; the government’s knowledge and evaluation of the existence of
fraud in the PPP; the SBA and other government officials’ guidance concerning PPP lender
requirements and PPP applicant eligibility; Kabbage’s participation in the PPP; Kabbage’s
BSA/AML program; the SBA’s use, approval, evaluation, or assessment of PPP loan applications;
Kabbage’s communications with the SBA and other government officials.
Defendant Robinson’s Position (in addition to Defendants’ Position)
Documents and communications with Kabbage and within SBA and/or Treasury related to
identifying Kabbage loan files to review or audit and the reasons for such potential reviews or
audits;
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Documents and communications with Kabbage and within SBA and/or Treasury related to
whether Government employees or contractors suspected fraud or calculation errors in Kabbage
loan files and any actions they took as a result;
Documents and communications with Kabbage and within SBA and/or Treasury related to
Kabbage disclosing its loan calculation and verification methodologies to the Government,
including but not limited to in response to SBA requests for Kabbage loan files;
Kabbage’s communications and cooperation with law enforcement related to
investigations of PPP loan applicants, including but not limited to the FBI, SBA OIG, Treasury
OIG, or IRS;
Documents and communications within SBA and/or Treasury related to whether
Government employees or contractors auditing or reviewing loan files from other lenders
suspected fraud or calculation errors in those loan files and any actions they took as a result;
Documents and communications within SBA and/or Treasury related to whether other
lenders made the “SALT Error” and any actions taken as a result;
Documents and communications within SBA and/or Treasury related to whether any other
lenders accepted borrower representations about the number of employees making more than
$100,000 annually without further payroll documentation review or mathematical checks or
verifications as a result;
Documents and communications within SBA and/or Treasury related to whether any other
lenders did not do a “good faith review” of PPP applications or failed to maintain an acceptable
BSA/AM system, and any actions taken as a result, including but not limited actual or threatened
litigation against those lenders;
All SARs or other communications from Kabbage’s partner banks reporting suspicions or
concerns about any Kabbage PPP applicants or Kabbage’s processes for reviewing and approving
PPP loans
All actions taken in response to any SARs filed by Kabbage with respect to any PPP loan
applications
Documents and communications within SBA and/or Treasury related to whether lenders
should approve or not approve PPP loan applications where the lenders could not confirm fraud or
inaccuracies.
Purpose, development, and implementation of the Paycheck Protection Program (“PPP”);
Purpose, development, and implementation of all guidance issued pursuant to the PPP;
Participation of non-bank lenders in the PPP, including financial technology companies;
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Kabbage,1 including its participation in the PPP as a direct lender and service provider;
PPP loan applications reviewed or submitted by Kabbage and/or KServicing2;
PPP loan forgiveness applications reviewed or submitted by Kabbage and/or KServicing;
PPP lender loan review requirements;
The likelihood and prevalence of fraud in the PPP;
PPP applications submitted by Celtic Bank;
PPP applications submitted by Cross River Bank;
The SBA’s Office of Inspector General Reports concerning the PPP;
(ii) Any issues relating to disclosure or discovery of electronically stored
information (“ESI”), including the form or forms in which it should be
produced (whether native or some other reasonably usable format) as
well as any methodologies for identifying or culling the relevant and
discoverable ESI. Any disputes regarding ESI that counsel for the
parties are unable to resolve during their conference must be identified
in the report.
At the Rule 26(f) conference, counsel for each party agreed that an ESI order governing
the production of ESI in this matter should be adopted and utilized in the litigation. On April 24,
2025, the parties jointly moved the Court to enter an agreed-upon ESI order.
(iii) Any agreements or disputes relating to asserting claims of privilege or
preserving discoverable information, including ESI and any
agreements reached under Federal Rule of Evidence 502 (such as the
potential need for a protective order and any procedures to which the
parties might agree for handling inadvertent production of privileged
information and other privilege waiver issues). A party asserting that
any information is confidential should immediately apply to the Court
for entry of a protective order.
At the Rule 26(f) conference, counsel for each party agreed that a protective order should
be adopted and utilized in the litigation. Counsel also agreed that the parties’ exchange of
discovery and other evidence would be subject to a claw-back agreement relating to the inadvertent
disclosure of privileged or potentially privileged information. The Court has entered agreed-upon
ESI, protective, and Rule 502(d) clawback orders.
(iv) Any changes that should be made in the limitations on discovery
imposed by the Rules, whether federal or local, and any other
limitations that should be imposed.
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The Government proposes 20 fact depositions per side, excluding any depositions required
to take discovery on any advice of counsel defense that Defendants may assert. Defendants propose
30 fact depositions per side.
(v) Whether any other orders should be entered by the Court pursuant to
Federal Rule of Civil Procedure 26(c) or Rule 16(b), (c).
The parties are in discussions concerning a potential additional order to govern the
exchange of privilege logs.
8. Statement of the progress made toward settlement and the present status of
settlement negotiations, including whether a demand and/or an offer has been
made. If the parties have agreed upon a mediator, also state the name, address,
and phone number of that mediator and a proposed deadline for mediation.
An early date is encouraged to reduce expense. The Court will appoint a
mediator if none is agreed upon.
The United States received a settlement offer from Defendant Petralia on November 22,
2024, and made a counter-offer to Defendant Petralia on the same day, but has not received a
further response. The United States received a settlement offer from Defendant Robinson on
February 12, 2025, and made a counter-offer on February 24, 2025. Robinson rejected that
demand and has not made a counter. The United States has not made a settlement demand to, or
received a settlement offer from, Defendant Frohwein. At the Rule 26(f) conference, the United
States conveyed to counsel for Defendants that it is ready, willing, and able to discuss settlement
at any time. Counsel for Defendants conveyed that it is premature to discuss settlement at this
time. The parties anticipate that settlement discussions may be more productive after the Court
has ruled on the Defendants’ motions to dismiss. The parties will agree upon a mediator by the
deadline set forth in Appendix 1 (or advise the Court in the event they cannot reach an agreement).
9. The identity of persons expected to be deposed.
The United States expects to depose Defendants and various third parties, including at least
the former employees of Kabbage listed in the table below, and current or former employees of
Kabbage’s lender partners, including Customers Bank, and Cross River Bank, Wells Fargo Bank,
and Kabbage’s consultants, including Alvarez & Marsal. The Government anticipates the need
for additional persons to be deposed as discovery proceeds.
Name Title 2
Kate Prince Former Executive Assistant, Kabbage
Syed Ashekeen Former New Products Analyst, Kabbage
Nipun Goel Former Head of Lend Ops, Strategy, Kabbage
Hirsh Gaikwad Former Strategic Analyst, Kabbage
Rohit Bothra Former Data Science Analyst, Kabbage
2 Names and titles are based on documents and information currently available to the
United States. The United States reserves the right to amend this list as discovery proceeds.
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Anthony Sabelli Former Head of Data Science, Kabbage
James Hayes Former Director of FP&A, Kabbage
Sam Taussig Former Head of Global Policy, Kabbage
Kristel Adler Former Head of Deposits and Savings, Kabbage
David McGowan Former Head of Technology, Kabbage
Nan Siler Former Head of Payment Operations, Kabbage
Deepesh Jain Former Head of Capital Markets, Kabbage
Nicole Hill Former Head of Fraud, Kabbage
Krishnakumar Srinivasan Former Chief Analytics Officer, Kabbage
Former Vice President, Credit Risk & Analytics; Acting
Amit Kesarwani
Head of Fraud
Bryanna Simpson Former Fraud Analyst, Kabbage
Siddharth Shah Former Risk Analyst, Kabbage
Taylor Suiter Former SBA Loan Rep, Kabbage
Laura Goldberg Former Chief Revenue Officer, Kabbage
Paul Bernardini Former Head of Communications, Kabbage
Kara Baker Former Payment and Finops Lead, Kabbage
William Bowden Former Director of Collection & Risk Revenue, Kabbage
Former Head of Tax & Treasury, Kabbage; and Former
Daniel Eidson
CFO, KServicing
Defendants expect to depose various third parties, including at least current and former
employees of Kabbage and the SBA, as set forth in the table below, as well as current and former
employees of Kabbage’s bank partners, Cross River Bank and Customers Bank. Defendants
anticipate the need for additional persons to be deposed as discovery proceeds.
Name Title 3
Former Kabbage Employees
Former Vice President, Credit Risk & Analytics; Acting Head of
Amit Kesarwani
Fraud
Azba Habib Former Assistant General Counsel
Bryanna Simpson Former Manager, Risk Management
Clint Hill Former Head of Architecture and Information Security
David McGowan Former Chief Technology Officer
Elizabeth Maiellaro Former Counsel
Emma Blackburn Former Customer Service Employee
Hirsh Gaikwad Former Product and Strategy
Jessica Robinson Former Risk Analyst
Kristel Adler Former Head of New Products
Latinga Maxfield Former Employee (Title Unknown)
Laura Goldberg Former Chief Revenue Officer
3 Names and titles are based on documents and information currently available to
Defendants. Defendants reserve the right to amend this list as discovery proceeds.
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Leslie Scott Askins Former General Counsel
Nan Siler Former Head of Payments Strategy and Operations
Nipun Goel Former Head of Lend Operations Strategy
Sam Taussig Former Head of Policy
Syed Ashekeen Former Product Lead
Tawana Tillard Former Risk Analyst
SBA Officials
Bill Briggs Nominee for Deputy Administrator
Bill Manger Former Chief of Staff
Brett Lehnert Special Agent
Christopher Gray Former Deputy Chief of Staff
Christopher Ray Former Special Agent, Office of Inspector General (“OIG”)
Edward Ledford Associate Director, Office of Credit Risk
Former Regional Director, Florida Small Business Development
Eileen Rodriguez
Center
Eric Benderson Associate General Counsel for Litigation and Small Claims
Hannibal (Mike) Ware Inspector General
Isabella Casillas Guzman Former Administrator
Janelle Jones Lender Relations Specialist
Jasmin Gonzalez Special Agent, OIG
John Blackstock District Director, New Jersey District
John Miller Deputy Associate Administrator, Office of Capital Access
Jon Block Former Loan Specialist
Jonathan Harkless Former Intern, Investigations Division, OIG
Jovita Carranza Former Administrator
Juan Fernandez Special Agent, OIG
Kenneth Welch Certified Digital Fraud Examiner, OIG
Michelle Blank National Disaster Program Director, Investigations Division, OIG
Minerva Perez Loan Specialist
Miriam Gurruchaga Special Agent
Former Associate Administrator for the Office of Capital Access,
Patrick Kelley
from 2021-2023
Paul Kirwin Supervisory Financial Analyst, Office of Credit Risk
Ryan Kucera Special Agent
Sara Oliver Special Agent, OIG
Sheryl McConville Deputy Director, Office of Performance Systems Management
Timalyn Franklin System Owner, Office of Performance Systems Management
Wilbur Barras Title Unknown
10. Estimated trial time and whether a jury demand has been timely made.
The parties jointly propose 3 weeks for a jury trial.
All parties request trial by jury.
12
Case 4:21-cv-00110-SDJ Document 87 Filed 05/02/25 Page 13 of 15 PageID #: 904
11. The names of the attorneys who will appear on behalf of the parties at the
management conference (the appearing attorney must be an attorney of
record and have full authority to bind the client).
For the United States: Assistant United States Attorney Betty Young of the Eastern District
of Texas and attorneys Sarah Loucks and Kelly Phipps from the Civil Fraud Section of the United
States Department of Justice’s Civil Division, Commercial Litigation Branch. The United States
will be represented by the above-listed attorneys at the management conference, and this team will
be able to negotiate any settlement that that they are willing to recommend for approval but will
not have the “full authority to bind” the United States. See 28 C.F.R. §§ 0.160 and 0.161; 28
U.S.C. §§ 472, 473(b)(5), (c); Fed. R. Civ. P. 16.
For Relator: Julie Bracker and Sarah Frazier will appear in person on behalf of Relator.
For Defendant Robert Frohwein: Miranda Hooker, Kate MacLeman, and Kara Czekai will
appear in person on behalf of Mr. Frohwein.
For Defendant Kathryn Petralia: George Varghese and Michaela Wilkes Klein will appear
in person on behalf of Ms. Petralia.
For Defendant Spencer Robinson: Henry Asbill and Chris Mead will appear in person on
behalf of Mr. Robinson.
12. Whether the parties jointly consent to trial before a magistrate judge.
The parties do not jointly consent to trial before a magistrate judge.
13. Any other matters that counsel deem appropriate for inclusion in the joint
conference report or that deserve the special attention of the Court at the
management conference.
None at this time.
13
Case 4:21-cv-00110-SDJ Document 87 Filed 05/02/25 Page 14 of 15 PageID #: 905
Dated: May 2, 2025 Respectfully submitted,
/s/ Melissa R. Smith__________ /s/ Nicholas M. Mathews__________
Melissa R. Smith Nicholas M. Mathews
Gillam & Smith LLP Alexander J. Chern
303 South Washington Ave. McKool Smith, PC - Dallas
Marshall, TX 75670 300 Crescent Court, Suite 1500
Telephone: (903) 934-8450 Dallas, TX 75201
Fax: (903) 934-9257 Telephone: (214) 978-4258
melissa@gillamsmithlaw.com Fax: (214) 978-4044
Nmathews@mckoolsmith.com
Anjan Sahni (pro hac vice) Achern@mckoolsmith.com
Wilmer Cutler Pickering Hale and Dorr LLP
7 World Trade Center, 250 Greenwich Street Miranda Hooker (pro hac vice)
New York, NY 10007 Kate E. MacLeman (pro hac vice)
Tel: (212) 230-8800 Kara N. Czekai (pro hac vice)
Fax: (212) 230-8888 Goodwin Procter LLP
anjan.sahni@wilmerhale.com 100 Northern Avenue
Boston, Massachusetts 02210
Christopher E. Babbitt (pro hac vice) Telephone: (617) 570-1000
Michaela S. Wilkes Klein (pro hac vice) Fax: (617) 523-1231
Wilmer Cutler Pickering Hale and Dorr LLP MHooker@goodwinlaw.com
2100 Pennsylvania Avenue NW KMacLeman@goodwinlaw.com
Washington, DC 20037 KCzekai@goodwinlaw.com
Telephone: (202) 663-6000 Counsel for Robert Frohwein
Fax: (202) 663-6363
christopher.babbitt@wilmerhale.com /s/ Henry W. Asbill
michaela.wilkesklein@wilmerhale.com Henry W. Asbill (pro hac vice)
Christopher B. Mead (pro hac vice)
George P. Varghese (pro hac vice) Lisa H. Schertler (pro hac vice)
Wilmer Cutler Pickering Hale and Dorr LLP Paola Pinto (pro hac vice)
60 State Street Schertler Onorato Mead & Sears
Boston, MA 02109 555 13th Street NW Suite 500W
Telephone: (617) 526-6000 Washington DC 20004
Fax: (617) 526-5000 Telephone: 202-628-4199
george.varghese@wilmerhale.com Facsimile: 202-628-4177
Counsel for Kathryn Petralia hasbill@schertlerlaw.com
cmead@schertlerlaw.com
lschertler@schertlerlaw.com
ppinto@schertlerlaw.com
Counsel for Spencer Robinson
COUNSEL FOR DEFENDANTS
14
Case 4:21-cv-00110-SDJ Document 87 Filed 05/02/25 Page 15 of 15 PageID #: 906
MICHAEL D. GRANSTON /s/ Julie Bracker (with permission)
Deputy Assistant Attorney General JULIE BRACKER
Georgia Bar No. 073803
ABE MCGLOTHIN, JR. Bracker & Marcus LLC
Acting United States Attorney 3355 Lenox Road, Suite 660
Eastern District of Texas Atlanta, Georgia 30326
E-mail: Julie@FCACounsel.com
/s/ Betty S. Young__________ (770) 988-5035
JAMES G. GILLINGHAM, Texas Bar #24065295 (678) 648-5544 (fax)
BETTY S. YOUNG, Texas Bar #24102498
Assistant U.S. Attorneys SARAH M. FRAZIER
Eastern District of Texas Texas Bar # 24027320
110 N. College Street, Suite 700 Murphy Anderson PLLC
Tyler, Texas 75702 1919 Decatur Street
E-mail: James.Gillingham@usdoj.gov Houston, Texas 77007
E-mail: Betty.Young@usdoj.gov (202) 223-2620 ext. 116
(903) 590-1400 sfrazier@murphypllc.com
(903) 590-1436 (facsimile)
ATTORNEYS FOR RELATOR
JAMIE A. YAVELBERG PAUL PIETSCHNER
COLIN M. HUNTLEY
SARAH E. LOUCKS
KELLY E. PHIPPS
Attorneys, Civil Division
United States Department of Justice
P.O. Box 261
Ben Franklin Station
Washington, D.C. 20044
E-mail: Sarah.E.Loucks@usdoj.gov
E-mail: Kelly.E.Phipps@usdoj.gov
(202) 616-4203
(202) 514-0280 (facsimile)
ATTORNEYS FOR PLAINTIFF
THE UNITED STATES OF AMERICA
15
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