Settlement Agreement — United States, Priority Acquisitions, Inc. and Relator Quesenberry

Summary

A Settlement Agreement among the United States, Priority Acquisitions, Inc., and relator Bryan Quesenberry. It recites that Quesenberry filed a qui tam action on September 7, 2020 in the Northern District of California, No. 20-cv-6451, alleging that Priority unlawfully applied for and received two Paycheck Protection Program loans. The Covered Conduct section says the United States contends that two May 2020 applications led to promissory notes for $200,625 and $200,624. Under the terms, Priority pays $50,000 (the Settlement Amount) according to a payment schedule in Exhibit 1, which begins with $12,500 due February 15, 2023. A form of consent judgment for default is attached.

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“Settlement Agreement — United States, Priority Acquisitions, Inc. and Relator Quesenberry.” Original at www.justice.gov. Archived at Pandemic Darlings on 2026-09-25, https://pandemicdarlings.com/source-documents/dl-9683db4759f64473-2af6503df9/, SHA-256 0210f875bed0b8da1afbc3356f90ccc4e1dcfde71beb2846cfb28233e9805c89.

Full text

SETTLEMENT AGREEMENT

This Settlement Agreement (“Agreement”) is entered into among the United States of

America, acting through the United States Department of Justice and on behalf of the

United States Small Business Administration (collectively, the “United States”), Priority

Acquisitions, Inc. (“Priority”), and Bryan Quesenberry (“Quesenberry” or “Relator”)

(collectively referred to as “the Parties”) through their authorized representatives.

RECITALS

A. Priority is a corporation organized under the laws of California and located at

16996 Grovenor Dr., Castro Valley, CA 94546. Priority is a licensed general contractor

specializing in residential and commercial construction, planning, building, and development.

B. On September 7, 2020, Bryan Quesenberry filed a qui tam action in the United

States District Court for the Northern District of California captioned U.S. ex rel. Quesenberry v.

Bay Wire, Inc., et al., No. 20-cv-6451, pursuant to the qui tam provisions of the False Claims

Act, 31 U.S.C. § 3730(b) (the “Civil Action”). Relator alleges that Priority unlawfully applied

for and received two loans under the Paycheck Protection Program (“PPP”) prior to December

31, 2020 and falsely certified, in the submitted applications for the PPP loans, that it would

receive only one PPP loan prior to December 31, 2020.

C. The PPP was established pursuant to the Coronavirus Aid, Relief, and Economic

Security (“CARES”) Act. The CARES Act, which was enacted in March 2020, was designed to

provide emergency financial assistance to millions of Americans suffering economic effects

caused by the COVID-19 pandemic. One source of relief provided by the CARES Act was the

authorization of forgivable loans to small businesses for employee payroll and certain other

expenses, through the PPP. To obtain a PPP loan, a qualifying business was required to submit a

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PPP loan application, which is signed by an authorized representative of the business. The loan

application requires the business—through its authorized representative—to acknowledge the

program rules and make certain affirmative certifications regarding its eligibility to obtain the

PPP loan. PPP loan applications were processed by participating lenders, which received

processing fees from SBA. Following the approvals of loan applications, the participating

lenders funded the loan, which were 100% guaranteed by the SBA.

D. The United States contends that it has certain civil claims against Priority

for engaging in the following conduct, hereinafter referred to as the “Covered Conduct”:

The United States contends that, in May 2020, Priority submitted an application
for a PPP loan to “Lender 1.” In that application, Priority falsely certified 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 [PPP].”
Subsequently, Priority entered into a promissory note by which Lender 1 agreed
to lend $200,625 to Priority pursuant to the PPP (the “Lender 1 PPP Loan”), and
Priority received the Lender 1 PPP Loan proceeds by electronic transfer.

The United States further contends that, in May 2020, Priority submitted an
application for a PPP loan to “Lender 2.” In that application, Priority falsely
stated 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 [PPP].” Subsequently, Priority entered into a promissory note by which
Lender 2 agreed to lend $200,624 to Priority pursuant to the PPP (the “Lender 2
PPP Loan”), and Priority received the Lender 2 PPP Loan funds by electronic
transfer.

The United States contends that, after receiving both the Lender 1 PPP Loan
funds and the Lender 2 PPP Loan funds, Priority knowingly and improperly
retained the funds obtained from both loans, contrary to the express certifications
that Priority made that Priority would not receive more than one PPP loan prior to
December 31, 2020. The United States further contends that, despite knowing
that it should not have received more than one PPP loan prior to December 31,
2020, Priority applied for and received forgiveness for the Lender 1 PPP Loan.
After being served with a Civil Investigative Demand from the United States
Department of Justice, Priority repaid the Lender 2 PPP Loan.

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E. The United States contends that it has certain civil claims against Priority for

violation the False Claims Act, 31 U.S.C. § 3729-3733 (“FCA”), and under the Financial

Institutions Reform, Recovery and Enforcement Act of 1989, 12 U.S.C. § 1833a (“FIRREA”).

F. Relator claims entitlement to a share of the proceeds of this Settlement Agreement

under 31 U.S.C. § 3730(d).

To avoid the delay, uncertainty, inconvenience, and expense of protracted litigation of the

above claims, and in consideration of the mutual promises and obligations of this Settlement

Agreement, the Parties agree and covenant as follows:

TERMS AND CONDITIONS

1. Priority shall pay to the United States $50,000 (“Settlement Amount”) by

electronic funds transfer pursuant to written instructions to be provided by the United States

Attorney’s Office for the Northern District of California according to the payment schedule

detailed in Exhibit 1.

2. In the event that Priority fails to complete the payment set forth in Paragraph 1 by

the date upon which it is due, Priority shall be in Default of its payment obligations (“Default”).

Upon Default, the United States will provide Priority, through its legal counsel or other

representative previously designated by Priority, by electronic mail a written Notice of Default,

and Priority shall have an opportunity to cure such Default within three business days from the

date the Notice of Default is sent by counsel for the United States. If Priority fails to cure the

Default within three business days from the date the Notice of Default is sent by the United

States, the difference between the amount paid by Priority under Paragraph 1 and $50,000 shall

become immediately due and payable, and interest on such amount shall accrue at the rate of 10

percent per annum, compounded daily from the date of Default.

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3. Upon execution of this Settlement Agreement, Priority shall enter into a

Consent Judgment with the United States in the form attached as Attachment A. The

United States shall not file the Consent Judgment unless Priority is in uncured Default as defined

above. Priority agrees not to contest any Consent Judgment and/or collection action undertaken

by the United States pursuant to this Paragraph, either administratively or in any state or federal

court, except on the grounds of actual payment to the United States. At its sole option, in the

event of uncured Default as defined above, the United States alternatively may rescind this

Agreement as to Priority and bring any civil and/or administrative claim, action, or proceeding

against Priority for the claims that would otherwise be covered by the releases provided herein.

If the United States opts to rescind this Agreement in the event of uncured Default as defined

above, Priority agrees not to plead, argue, or otherwise raise any defenses of statute of

limitations, laches, estoppel or similar theories, to any civil or administrative claims that are (a)

filed by the United States against Priority, within 180 days of written notification to Priority that

this Agreement has been rescinded, and (b) relate to the Covered Conduct, except to the extent

these defenses were available on the particular date when the Civil Action referenced in Recital

Paragraph D was filed.

4. Conditioned upon the United States receiving the payment set forth in

Paragraph 1, the United States shall pay to Relator a 15% share of each payment described in

Exhibit 1 by electronic funds transfer (“Relator’s Share”). The total amount of the share will be

$6,770.78. No other relator share payments shall be made under this Agreement.

5. Subject to the exceptions in Paragraph 7 (concerning reserved claims) below, and

upon the United States’ receipt of the Settlement Amount, the United States releases Priority

from any civil or administrative monetary claim the United States has for the Covered Conduct

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under the False Claims Act, 31 U.S.C. §§ 3729-3733; the Program Fraud Civil Remedies Act,

31 U.S.C. §§ 3801-3812; FIRREA, 12 U.S.C. § 1833a; or the common law theories of payment

by mistake, unjust enrichment, and fraud.

6. Subject to the exceptions in Paragraph 7 below, and upon the United States’

receipt of the Settlement Amount, Relator, for himself and for his heirs, successors, attorneys,

agents, and assigns, releases Priority from any civil monetary claim the Relator has on behalf of

the United States for the Covered Conduct under the False Claims Act, 31 U.S.C. §§ 3729–3733.

7. Notwithstanding the releases given in Paragraph 5 of this Agreement, or any other

term of this Agreement, the following claims and rights of the United States are specifically

reserved and are not released:

a. Any liability arising under Title 26, U.S. Code (Internal Revenue Code);

b. Any criminal liability;

c. Except as explicitly stated in this Agreement, any administrative liability

or enforcement right, including the suspension and debarment rights of

any federal agency;

d. Any liability to the United States (or its agencies) for any conduct other

than the Covered Conduct;

e. Any liability based upon obligations created by this Agreement; and

f. Any liability of individuals.

8. Relator and his heirs, successors, attorneys, agents, and assigns shall not object to

this Agreement but agree and confirm that this Agreement is fair, adequate, and reasonable under

all the circumstances, pursuant to 31 U.S.C. § 3730(c)(2)(B). Conditioned upon Relator’s receipt

of the Relator’s Share, Relator and his heirs, successors, attorneys, agents, and assigns fully and

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finally release, waive, and forever discharge the United States, its agencies, officers, agents,

employees, and servants, from any claims arising from the filing of the Civil Action or under

31 U.S.C. § 3730, and from any claims to a share of the proceeds of this Agreement and/or the

Civil Action.

9. Relator, for himself, and for his heirs, successors, attorneys, agents, and assigns,

releases Priority, and its officers, agents, and employees, from any liability to Relator arising

from the filing of the Civil Action, or under 31 U.S.C. § 3730(d) for expenses or attorneys’ fees

and costs.

10. Priority waives and shall not assert any defenses Priority may have to any

criminal prosecution or administrative action relating to the Covered Conduct that may be based

in whole or in part on a contention that, under the Double Jeopardy Clause in the Fifth

Amendment of the Constitution, or under the Excessive Fines Clause in the Eighth Amendment

of the Constitution, this Agreement bars a remedy sought in such criminal prosecution or

administrative action.

11. Priority fully and finally releases the United States, its agencies, officers, agents,

employees, and servants, from any claims (including attorneys’ fees, costs, and expenses of

every kind and however denominated) that Priority has asserted, could have asserted, or may

assert in the future against the United States, its agencies, officers, agents, employees, and

servants, related to the Covered Conduct or the United States’ investigation or prosecution

thereof.

12. Priority fully and finally releases the Relator from any claims (including

attorneys’ fees, costs, and expenses of every kind and however denominated) that Priority has

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asserted, could have asserted, or may assert in the future against the Relator, related to the

Covered Conduct and the Relator’s investigation and prosecution thereof.

13. a. Unallowable Costs Defined: All costs (as defined in the Federal

Acquisition Regulation, 48 C.F.R. § 31.205-47) incurred by or on behalf of Priority, and

Priority’s present or former officers, directors, employees, shareholders, and agents in

connection with:

(1) the matters covered by this Agreement;

(2) the United States’ audit(s) and civil investigation(s) of the matters

covered by this Agreement;

(3) Priority’s investigation, defense, and corrective actions undertaken

in response to the United States’ audit(s) and civil investigation(s)

in connection with the matters covered by this Agreement

(including attorneys’ fees);

(4) the negotiation and performance of this Agreement; and

(5) the payment Priority makes to the United States pursuant to this

Agreement and any payments that Priority may make to Relator,

including costs and attorney’s fees,

are unallowable costs for government contracting purposes (hereinafter referred to as

“Unallowable Costs”).

b. Future Treatment of Unallowable Costs: Unallowable Costs will be

separately determined and accounted for by Priority, and Priority shall not charge such

Unallowable Costs directly or indirectly to any contract with the United States.

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c. Treatment of Unallowable Costs Previously Submitted for Payment:

Within 90 days of the Effective Date of this Agreement, Priority shall identify and repay by

adjustment to future claims for payment or otherwise any Unallowable Costs included in

payments previously sought by Priority or any of its subsidiaries or affiliates from the United

States. Priority agrees that the United States, at a minimum, shall be entitled to recoup from

Priority any overpayment plus applicable interest and penalties as a result of the inclusion of

such Unallowable Costs on previously submitted requests for payment. The United States,

including the Department of Justice and/or the affected agencies, reserves its rights to audit,

examine, or re-examine Priority’s books and records and to disagree with any calculations

submitted by Priority or any of its subsidiaries or affiliates regarding any Unallowable Costs

included in payments previously sought by Priority, or the effect of any such Unallowable Costs

on the amount of such payments.

14. This Agreement is intended to be for the benefit of the Parties only.

15. Upon receipt of the payment described in Paragraph 1, above, Relator and the

United States shall promptly sign and file in the Civil Action a Joint Stipulation of Dismissal of

all claims against Priority in the Civil Action pursuant to Rule 41(a)(1)(A). Such dismissal shall

be: (a) with prejudice to the Relator as to all claims against all named defendants in the Civil

Action; (b) with prejudice to the United States as to the Covered Conduct; and (c) without

prejudice to the United States as to all other claims or allegations in the Civil Action.

16. Each Party shall bear its own legal and other costs incurred in connection with

this matter, including the preparation and performance of this Agreement.

17. Each Party and signatory to this Agreement represents that it freely and

voluntarily enters into this Agreement without any degree of duress or compulsion.

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18. This Agreement is governed by the laws of the United States. The exclusive

jurisdiction and venue for any dispute relating to this Agreement is the United States District

Court for the Northern District of California. For purposes of construing this Agreement, this

Agreement shall be deemed to have been drafted by all Parties to this Agreement and shall not,

therefore, be construed against any Party for that reason in any subsequent dispute.

19. This Agreement constitutes the complete agreement between the Parties. This

Agreement may not be amended except by written consent of the Parties.

20. The undersigned counsel represent and warrant that they are fully authorized to

execute this Agreement on behalf of the persons and entities indicated below.

21. This Agreement may be executed in counterparts, each of which constitutes an

original and all of which constitute one and the same Agreement.

22. This Agreement is binding on Priority’s successors, transferees, heirs, and

assigns.

23. This Agreement is binding on Relator’s successors, transferees, heirs, and assigns.

24. All parties consent to the United States’ disclosure of this Agreement, and

information about this Agreement, to the public.

25. This Agreement is effective on the date of signature of the last signatory to the

Agreement (Effective Date of this Agreement). Facsimiles of signatures shall constitute

acceptable, binding signatures for purposes of this Agreement.

[SIGNATURE PAGES FOLLOW]

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THE UNITED STATES OF AMERICA

Dated: the 27 day of January, 2023 By: ______________________________
Jared Wiesner
Trial Attorney
Commercial Litigation Branch
Civil Division
United States Department of Justice

Dated: the 27 day of January, 2023 By: ______________________________
Michael T. Pyle
Assistant United States Attorney
United States Attorney’s Office for the
Northern District of California

Attorneys for United States of America

PRIORITY ACQUISITIONS, INC.

Dated: the day of January, 2023 By: ______________________________
Jeremy Musson
President, Priority Acquisitions, Inc.

Dated: the 25th day of January, 2023 By: ______________________________
Paul Strickland, Esq.
Attorney for Priority Acquisitions, Inc.

RELATOR – BRYAN QUESENBERRY

Dated: the 27 day of January, 2023 By: ______________________________
Bryan Quesenberry, Esq.
Relator

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Attachment
A

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IN THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA )
ex rel. BRYAN QUESENBERRY )
)
Plaintiff/Relator, )
) No.: 20-cv-6451
v. )
)
PRIORITY ACQUISITIONS, INC., )
)
Defendant. )

CONSENT JUDGMENT

Plaintiff United States of America (the “United States”) and Defendant Priority

Acquisitions, Inc. (collectively referred as the “Parties”), hereby stipulate, agree and

consent to the entry of this judgment based upon the following uncontested allegations:

1. This Court has jurisdiction over this case under 28 U.S.C. §§ 1331, 1345,

1367(a). Priority Acquisitions, Inc., consents to the jurisdiction of the United States

District Court for the Northern District of California for the resolution of this dispute.

2. On the 27
___ day of January, 2023, Defendant Priority Acquisitions, Inc.,

entered into a Settlement Agreement with Plaintiff United States for the purpose of

resolving a dispute (the “Settlement Agreement”). A copy of the Settlement Agreement

is attached hereto as Exhibit 1 and incorporated by reference herein.

3. Under the terms of the Settlement Agreement, Priority Acquisitions, Inc.,

agreed to pay to the United States the sum of $50,000 (“Settlement Amount”).

4. Also under the terms of the Settlement Agreement, Priority Acquisitions,

Inc., agreed that in the event it defaulted and failed to pay the Settlement Amount, within

three (3) business days of the date the Notice of Default is sent by counsel for the United
States, the United States may file a Consent Judgment against Priority Acquisitions, Inc.,

in the amount of the unpaid balance of the Settlement Amount.

5. Priority Acquisitions, Inc., now failed to make payment in accordance

with the Settlement Agreement, and therefore is in default under the terms of the

Settlement Agreement.

6. Unless it has already done so, within a reasonable time after the filing of

this Consent Judgment, the United States will file a statement of debt showing the

amount due and owing under the Settlement Agreement as of the date of default.

7. The United States has given Priority Acquisitions, Inc., written notice of

default under the terms of the Settlement Agreement, and demanded that Priority

Acquisitions, Inc., cure that default by tendering payment in full on the cure amount

under the terms of the Settlement Agreement. The United States has given Priority

Acquisitions, Inc., three (3) business days to cure the default, as provided in the

Settlement Agreement, but Priority Acquisitions, Inc., failed to respond or to make

arrangements to comply with the terms of the Settlement Agreement.

ACCORDINGLY, THIS COURT enters judgment for the United States against

Defendant Priority Acquisitions, Inc., in the amount of $_____________________, plus

interest at the post-judgment interest at the rate of 10% per annum, compounded daily

from the date this Consent Judgment is entered until it is satisfied. This Court retains

jurisdiction over this action.

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DONE AND ORDERED in the Northern District of California this ___ day of

___________, 202_.

__________________________________
UNITED STATES DISTRICT JUDGE

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Consent to File

Paul Strickland, Esq., counsel for defendant Priority Acquisitions, Inc., has

consented to the undersigned Assistant United States Attorney’s electronic filing of this

Consent Judgment.

The parties hereby stipulate and agree to the entry of this Consent Judgment.

Dated: the 27 day of January, 2023 By: ______________________________
Michael T. Pyle
Assistant United States Attorney
United States Attorney’s Office for the
Northern District of California

Attorneys for United States of America

Dated: the 25th day of January, 2023 By: ______________________________
Paul Strickland, Esq.
Attorney for Priority Acquisitions, Inc.

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EXHIBIT 1 – PAYMENT SCHEDULE

Due Date Amount
February 15, 2023 $12,500
March 15, 2023 $3,125
April 15, 2023 $3,125
May 15, 2023 $3,125
June 15, 2023 $3,125
July 15, 2023 $3,125
August 15, 2023 $3,125
September 15, 2023 $3,125
October 15, 2023 $3,125
November 15, 2023 $3,125
December 15, 2023 $3,125
January 15, 2024 $3,125
February 15, 2024 $3,125
Total due to the United States: $50,0000

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