Errata to Defendants' Reply — Passive Income Advisors (D. Nev.)

Summary

An errata to the defendants' reply in support of their second motion for summary judgment in United States of America ex rel. Bryan Quesenberry v. Passive Income Advisors, LLC, and Gena Lofton, Case No. 2:20-cv-01537-RFB-MDC, in the U.S. District Court for the District of Nevada, filed September 15, 2025 as Document 68. It corrects a paragraph of the reply (ECF No. 66, filed September 11, 2025) that said the Department of Justice blocked the deposition of an SBA official by invoking agency privilege. The defendants acknowledge that no formal deposition notice was issued and no written invocation of privilege was received. They describe the official's cancelled meeting and a telephone call in April 2025, and ask the court to consider the corrected version. The errata is signed /s/ Leo Flangas for the defendants.

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“Errata to Defendants' Reply — Passive Income Advisors (D. Nev.).” Original at archive.org. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/court-filing-no-2-20-cv-01537-dkt-68-4623a15465/, SHA-256 380335dfdc54fbbc19fa41193503270d4d7fc35c9ecb039e5687e2ab4aca8533.

Full text

Case 2:20-cv-01537-RFB-MDC Document 68 Filed 09/15/25 Page 1 of 4

Leo P. Flangas, Esq.
1 Nevada Bar No.: 5637
Thomas M. Fronczek, Esq.
2
Nevada Bar No.: 11380
3 FLANGAS LAW FIRM, LTD.
600 S. Third Street
4 Las Vegas, NV 89101
Telephone: (702) 384-1990
5 Facsimile: (702) 384-1009
Attorney for Defendants
6

7 UNITED STATES DISTRICT COURT

8 DISTRICT OF NEVADA

9 United States of America ex rel. Bryan
Quesenberry, CASE NO. 2:20-cv-01537-RFB-MDC
10

11 Plaintiffs, ERRATA TO DEFENDANTS’ REPLY IN
SUPPORT OF SECOND MOTION FOR
12 v. SUMMARY JUDGMENT

13 Passive Income Advisors, LLC, and Gena
Lofton,
14
Defendants.
15

16 COMES NOW Defendants, Passive Income Advisors, LLC and Gena Lofton,

17 individually, by and through their counsel of record, Leo P. Flangas, Esq., and Thomas M.
18 Fronczek, Esq., of FLANGAS CIVIL LAW FIRM, and hereby respectfully submit this Errata to
19
correct a factual misstatement contained in the Reply in Support of Second Motion for Summary
20
Judgment [ECF No. 66], filed on September 11, 2025.
21
Corrected Statement Regarding SBA Official Tom Martin
22
INTRODUCTION
23
On page 7-8 of the Reply, Defendants included the following paragraph concerning
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Small Business Administration (SBA) official Tom Martin:
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Case 2:20-cv-01537-RFB-MDC Document 68 Filed 09/15/25 Page 2 of 4

Compounding these evidentiary deficiencies, Defendants were denied access to
1 critical testimonial evidence that would have further undermined the
Government's theories. Specifically, Defendants sought to depose Mr. Tom
2
Martin, a senior SBA official who had direct communication with Ms. Lofton
3 between 2020 and 2024 and had firsthand knowledge of her cooperation,
disclosure history, and the SBA's response. The DOJ blocked this deposition,
4 invoking agency privilege and internal protocols, effectively shielding the
Government's own key witness from cross-examination. This deliberate
5 obstruction deprived Defendants of a material source of evidence that would have
illuminated the SBA's internal view of materiality and Ms. Lofton's conduct, and
6 it further reinforces why summary judgment is inappropriate.
7 Upon further review, Defendants acknowledge that this language overstated the nature of
8
the communications regarding Mr. Martin. No formal deposition notice was issued for Mr.
9
Martin, and the Department of Justice did not transmit a written invocation of agency privilege
10
or official instruction blocking a deposition. The paragraph was based on a good-faith belief at
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the time by the drafting attorney, but requires clarification.
12
In fact, the events surrounding Mr. Martin occurred as follows:
13

14 Ms. Lofton maintained contact with Mr. Martin, who was her primary point of contact at

15 the SBA from approximately 2020 through early 2024. Shortly before her April 2025 deposition,

16 Ms. Lofton had arranged to meet Mr. Martin for lunch to discuss the possibility of him providing

17 a declaration or testimony concerning her good-faith efforts to comply with the PPP rules and

18 guidance. Mr. Martin canceled the meeting at the last minute and ceased responding to
19 communications.
20
In April 2025, undersigned counsel reached Mr. Martin by telephone. Mr. Martin stated
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that he was then on administrative leave and that he had been contacted by "some lawyers for the
22
government" who had instructed him not to speak to anyone about the case, including defense
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counsel. When asked for the names or agencies of those individuals, Mr. Martin indicated he was
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Case 2:20-cv-01537-RFB-MDC Document 68 Filed 09/15/25 Page 3 of 4

away from his home but would send the information later. He did not follow up and has not
1
responded to further inquiries.
2

3 Based on that conversation and Mr. Martin's subsequent silence, Defendants concluded

4 that Mr. Martin had been informally instructed not to testify or engage with the defense. While

5 no formal notice of deposition was issued (though the government has acknowledged that

6 mention was made of a potential deposition of Mr. Martin by undersigned counsel) and no
7 explicit written agency invocation of privilege was received, these circumstances made clear that
8
Defendants were functionally unable to obtain testimony from a fact witness with potentially
9
relevant insight into Ms. Lofton’s interactions with the SBA and her compliance efforts.
10
Relief Requested
11
Defendants respectfully request that the Court disregard the originally quoted paragraph
12
and instead consider the corrected version set forth in this Errata. Defendants regret any
13

14 confusion or mischaracterization and submit this Errata to ensure the record is accurate and

15 complete.

16 DATED this 15th day of September, 2025.

18 /s/ Leo Flangas
Leo P. Flangas, Esq.
19 FLANGAS CIVIL LAW FIRM, LTD.
20 Nevada Bar No. 5637
Attorney for Defendants
21

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Case 2:20-cv-01537-RFB-MDC Document 68 Filed 09/15/25 Page 4 of 4

1 CERTIFICATE OF SERVICE
2
I hereby certify that on this 15th day of September, 2025, service of the foregoing
3
document was made by submission via the Court’s electronic service system to the following
4
counsel of record:
5

6
/s/ Ami Rebecca Meyers
7 An employee of Flangas Civil Law Firm
8

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Our copy: 68-errata-to-66-reply-by-defendants-gena-lofton-passive-income.pdf
Original: archive.org