Qui Tam Complaint — United States of America ex rel. Bryan Quesenberry v. Bay Wire, Inc. et al. (Dkt. 1, N.D. Cal.)

Summary

A qui tam complaint filed September 10, 2020 under seal in Case 4:20-cv-06451-YGR in the U.S. District Court for the Northern District of California by Bryan Quesenberry, acting pro se as relator for the United States. The defendants include Bay Wire, Inc., Roots Community Health Center and The Roman Catholic Welfare Corporation of Oakland, among other businesses. Under the False Claims Act, 31 U.S.C. §§ 3729, et seq., the complaint alleges that certain defendants applied multiple times for PPP funds and received PPP funds multiple times despite rules prohibiting applicants from receiving PPP funds more than once. It asks for three times the damages sustained by the United States, a civil penalty of not less than $5,500 and not more than $11,000 for each violation, and a relator's award under 31 U.S.C. § 3730(d). The 25-page complaint demands a jury trial.
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Case 4:20-cv-06451-YGR Document 1

Bryan Quesenberry

197 East 100 North, Suite A
Payson, UT 84651
801-473-9951

ibg.esq@gmail.com

Plaintiff/Relator
Pro Se

Filed 09/10/20 Page 1 of 25

UNDER ¢ SEAL BEAN

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

UNITED STATES OF AMERICA, ex
rel. BRYAN QUESENBERRY,

Plaintiff,

VS.

BAY WIRE, INC.; BIG DOG
CONSTRUCTION; DYNAMIC
INTEGRATED SOLUTIONS, LLC;
FILLMORE STREET RESTAURANT
PARTNERS, LP; G FAMILY, INC.;
GIO CHA DUC HUONG
CORPORATION; INFOWORKS.IO,
INC.; IWAMOTOSCOTT
ARCHITECTURE, LLP; KARP
CAPITAL MANAGEMENT
CORPORATION; LA BAGUETTE,
LLC; LABORATORY FAMILY
SERVICES, INC.; LARK AVENUE
CAR WASH; LIGHTNING MOTORS
CORPORATION; M5 PARTNERS,
INC.; MALEKO BUSINESS
SERVICES; MAS MAC, INC.; MG-

HILA, LLC; MY CHEVROLET, INC.;

ONEPACS, LLC; ORTON
ENTERTAINMENT, LLC; POKE

COMPLAINT FOR VIOLATION
OF FEDERAL FALSE CLAIMS
ACT

(Filed in camera and under seal)
(DO NOT PLACE ON PACER)

JURY TRIAL DEMANDED
Cv 20 6451
Case No. JSC @

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Case 4:20-cv-06451-YGR Document1 Filed 09/10/20 Page 2 of 25

HOUSE, INC.; PRIORITY
ACQUISITIONS, INC.; QOTIENT,
INC.; RADEFF DESIGN STUDIOS;
REDWOOD SERVICES, INC.;
ROOTS COMMUNITY HEALTH
CENTER; SCC AT HOME, LLC;
SWEET THINGS; THE
INDEPENDENT, LLC; THE ROMAN
CATHOLIC WELFARE
CORPORATION OF OAKLAND;
TKK, LLC; and TREELINE
SECURITY,

Defendants.

Plaintiff-Relator Bryan Quesenberry, acting pro se, on behalf of the United
States of America (the “Government” or the “Federal Government”) and against
the above-named Defendants, alleges based upon personal knowledge, relevant
documents, information, and belief, as follows.

INTRODUCTION

1. This is an action to recover damages and civil penalties on behalf of
the United States of America arising from false and/or fraudulent records,
statements, and claims made and caused to be made by Defendants and/or their
agents and employees, in violation of the federal False Claims Act, 31 U.S.C. §§
3729, et seq. (“the FCA”).

2. This action seeks to recover millions of federal dollars wrongfully

loaned to Defendants through the Federal Government’s Payroll Protection

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Case 4:20-cv-06451-YGR Document1 Filed 09/10/20 Page 3 of 25

Program (“PPP”). The PPP provides a pathway to borrowers for forgiveness of
these loans.

a. Pursuant to the PPP, the Federal Government has spent billions of
dollars in stimulus funding, as well as other federal funding, to support and aid
legitimate businesses through the coronavirus pandemic.

4. This action alleges that certain Defendants applied multiple times for
PPP funds and received PPP funds multiple times despite the PPP application and
rules prohibiting applicants from receiving PPP funds more than once.

5. The FCA was enacted during the Civil War, and was substantially
amended in 1986, and again in 2009 and 2010. Congress amended the FCA in
1986 to enhance the Federal Government’s ability to recover losses sustained as a
result of fraud against the United States after finding that fraud in federal programs
was pervasive and that the FCA, which Congress characterized as a primary tool
for combating government fraud, was in need of modernization. The amendments
create incentives for individuals to come forward with information about fraud
against the Federal Government without fear of reprisals or inaction, and enable
the use of private legal resources to prosecute fraud claims on the Federal
Government’s behalf.

6. The FCA prohibits, inter alia: (1) knowingly presenting, or causing to

be presented, a false or fraudulent claim for payment or approval; and (2)

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Case 4:20-cv-06451-YGR Document1 Filed 09/10/20 Page 4 of 25

knowingly making or using, or causing to be made or used, a false or fraudulent
record or statement material to a false or fraudulent claim. 31 U.S.C. §§
3729(a)(1)(A), (B). Any person who violates the FCA is liable for a civil penalty

of up to $11,000 for each such claim, plus three times the amount of the

damages sustained by the Government. 31 U.S.C. § 3729(a)(1)(A) (as adjusted by
the Federal Civil Penalties Inflation Adjustment Act of 1990 [28 U.S.C. § 2461
note; Public Law 104-410]).

7. In 2009, Congress amended the FCA to clarify that a “claim” includes
“any request or demand, whether under a contract or otherwise, for money or
property and whether or not the United States has title to the money or property
that (i) is presented to an officer, employee, or agent of the United States; or (11) is
made to a contractor, grantee, or other recipient, if the money or property is to be
spent or used on the Government’s behalf or to advance a Government program or
interest...” 31 U.S.C. § 3729(b)(2).

8. The FCA allows any person having information about an FCA
violation to bring an action for himself and the Federal Government, and to share
in any recovery. The FCA requires that the complaint be filed under seal for a
minimum of 60 days (without service on Defendants during that time) to allow the
Federal Government time to conduct its own investigation and to determine

whether to join the suit.

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Case 4:20-cv-06451-YGR_ Document1 Filed 09/10/20 Page 5 of 25

9. Based on the foregoing laws, qui tam Plaintiff/Relator seeks through
this action to recover all available damages, civil penalties, and other relief for the
violations alleged herein in every jurisdiction to which Defendants’ misconduct
has extended.

PARTIES

10. Plaintiff/Relator Bryan Quesenberry (“Relator”) is a resident of Utah.
He brings this action on behalf of the United States of America, the real party in
interest.

11. Defendant Bay Wire, Inc. (“Bay Wire”) is a California entity doing
business in Hayward, California. Bay Wire applied for PPP funds twice, and was
approved for $150,000 — $350,000 on 4/27/2020 and approved for another
$150,000 — $350,000 on 6/30/2020. Upon information and belief, this entity
received these funds.

12. Defendant Big Dog Construction (“Big Dog”) is a California entity
doing business in Berkeley, California. Big Dog applied for PPP funds twice, and
was approved for $150,000 — $350,000 on 4/30/2020 and approved for another
$150,000 — $350,000 on 6/29/2020. Upon information and belief, this entity
received these funds.

13. Defendant Dynamic Integrated Solutions, LLC (“Dynamic”) is a

California entity doing business in San Jose and/or Santa Clara, California.

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Dynamic applied for PPP funds twice, and was approved for $350,000 - $1 million
on 4/30/2020 and approved for another $350,000 - $1 million on 5/1/2020. Upon
information and belief, this entity received these funds.

14. Defendant Fillmore Street Restaurant Partners, LP (“Fillmore”) is a
California entity doing business in San Francisco, California. Fillmore applied for
PPP funds twice, and was approved for $150,000 — $350,000 on 5/3/2020 and
approved for another $150,000 — $350,000 on 5/6/2020. Upon information and
belief, this entity received these funds.

15. Defendant G Family, Inc. (“G Family”) is a California entity doing
business in San Rafael, California. G Family applied for PPP funds twice, and was
approved for $350,000 - $1 million on 5/3/2020 and approved for another
$350,000 - $1 million on 5/3/2020. Upon information and belief, this entity
received these funds.

16. Defendant Gio Cha Duc Huong Corporation (“Gio Cha”) is a
California entity doing business in San Jose, California. Gio Cha applied for PPP
funds twice, and was approved for $150,000 — $350,000 on 5/3/2020 and approved
for another $150,000 — $350,000 on 6/30/2020. Upon information and belief, this
entity received these funds.

17. Defendant Infoworks.io, Inc. (“Infoworks”) is a California entity

doing business in Palo Alto, California. Infoworks applied for PPP funds twice,

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and was approved for $1 — 2 million on 6/29/2020 and approved for another $1 — 2
million on 6/30/2020. Upon information and belief, this entity received these
funds.

18. Defendant Iwamotoscott Architecture, LLP (“Iwamotoscott”) is a
California entity doing business in San Francisco, California. Iwamotoscott applied
for PPP funds twice, and was approved for $150,000 — $350,000 on 4/28/2020 and
approved for another $150,000 — $350,000 on 4/29/2020. Upon information and
belief, this entity received these funds.

19. Defendant Karp Capital Management Corporation (“Karp”) is a
California entity doing business in San Francisco, California. Karp applied for PPP
funds twice, and was approved for $150,000 — $350,000 on 5/18/2020 and
approved for another $150,000 — $350,000 on 5/19/2020. Upon information and
belief, this entity received these funds.

20. Defendant La Baguette, LLC (“La Baguette”) is a California entity
doing business in Palo Alto, California. La Baguette applied for PPP funds twice,
and was approved for $150,000 — $350,000 on 4/14/2020 and approved for another
$150,000 — $350,000 on 4/14/2020. Upon information and belief, this entity
received these funds.

21. Defendant Laboratory Family Services, Inc. (“Laboratory”) is a

California entity doing business in Livermore, California. Laboratory applied for

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PPP funds twice, and was approved for $350,000 - $1 million on 5/26/2020 and
approved for another $150,000 — $350,000 on 6/30/2020. Upon information and
belief, this entity received these funds.

22. Defendant Lark Avenue Car Wash (“Lark Avenue”) is a California
entity doing business in Campbell, California. Lark Avenue applied for PPP funds
three times. It was approved for $350,000 - $1 million on 5/3/2020, approved for
another $350,000 - $1 million on 5/3/2020, and approved for $2 —5 million on
5/3/20. Upon information and belief, this entity received these funds.

23. Defendant Lightening Motors Corporation (“Lightening Motors”) is
a California entity doing business in San Jose, California. Lightening Motors
applied for PPP funds twice, and was approved for $150,000 — $350,000 on
4/28/2020 and approved for another $150,000 — $350,000 on 5/3/2020. Upon
information and belief, this entity received these funds.

24. Defendant M5 Partners, Inc. (“M5 Partners”) is a California entity
doing business in Burlingame, California. MS Partners applied for PPP funds
twice, and was approved for $350,000 - $1 million on 5/3/2020 and approved for
another $350,000 - $1 million on 5/3/2020. Upon information and belief, this entity
received these funds.

25. Defendant Maleko Business Services (“Maleko”) is a California

entity doing business in Union City, California. Maleko applied for PPP funds

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twice, and was approved for $150,000 — $350,000 on 4/10/2020 and approved for
another $350,000 - $1 million on 6/11/2020. Upon information and belief, this
entity received these funds.

26. Defendant Mas Mac, Inc. (“Mas Mac”) is a California entity doing
business in Watsonville, California. Mas Mac applied for PPP funds twice, and
was approved for $350,000 - $1 million on 4/27/2020 and approved for another
$350,000 - $1 million on 4/30/2020. Upon information and belief, this entity
received these funds.

27. Defendant MG-Hila, LLC (“MG-Hila”) is a California entity doing
business in San Francisco, California. MG-Hila applied for PPP funds twice, and
was approved for $1 - 2 million on 4/11/2020 and approved for another $2 - 5
million on 4/15/2020. Upon information and belief, this entity received these
funds.

28. Defendant My Chevrolet, Inc. (“My Chevrolet”) is a California
entity doing business in Salinas, California. My Chevrolet applied for PPP funds
twice, and was approved for $1 - 2 million on 4/27/2020 and approved for another
$1 - 2 million on 5/3/2020. Upon information and belief, this entity received these
funds.

29. Defendant Onepacs, LLC (“Onepacs”) is a California entity doing

business in Palo Alto, California. Onepacs applied for PPP funds twice, and was

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approved for $150,000 — $350,000 on 4/28/2020 and approved for another
$150,000 — $350,000 on 5/3/2020. Upon information and belief, this entity
received these funds.

30. Defendant Orton Entertainment, LLC (“Orton”) is a California entity
doing business in Emeryville and/or Richmond, California. Orton applied for PPP
funds twice, and was approved for $350,000 - $1 million on 4/27/2020 and
approved for another $150,000 — $350,000 on 4/28/2020. Upon information and
belief, this entity received these funds.

31. Defendant Poke House, Inc. (“Poke House”) is a California entity
doing business in San Jose, California. Poke House applied for PPP funds twice,
and was approved for $150,000 — $350,000 on 4/27/2020 and approved for another
$150,000 — $350,000 on 5/1/2020. Upon information and belief, this entity
received these funds.

32. Defendant Priority Acquisitions, Inc. (“Priority Acquisitions”) is a
California entity doing business in Castro Valley, California. Priority Acquisitions
applied for PPP funds twice, and was approved for $150,000 — $350,000 on
5/15/2020 and approved for another $150,000 — $350,000 on 5/21/2020. Upon
information and belief, this entity received these funds.

33. Defendant Qotient, Inc. (“Qotient”) is a California entity doing

business in San Jose, California. Qotient applied for PPP funds twice, and was

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approved for $350,000 - $1 million on 6/22/2020 and approved for another
$350,000 - $1 million on 6/30/2020. Upon information and belief, this entity
received these funds.

34. Defendant Radeff Design Studios (“Radeff”) is a California entity
doing business in San Francisco, California. Radeff applied for PPP funds twice,
and was approved for $150,000 — $350,000 on 5/3/2020 and approved for another
$150,000 — $350,000 on 6/30/2020. Upon information and belief, this entity
received these funds.

35. Defendant Redwood Services, Inc. (“Redwood”) is a California entity
doing business in Burlingame, California. Redwood applied for PPP funds twice,
and was approved for $150,000 — $350,000 on 4/30/2020 and approved for another
$150,000 — $350,000 on 5/3/2020. Upon information and belief, this entity
received these funds.

36. Defendant Roots Community Health Center (“Health Center”) is a
California entity doing business in Oakland, California. Health Center applied for
PPP funds twice, and was approved for $1 - 2 million on 4/10/2020 and approved
for another $1 - 2 million on 4/27/2020. Upon information and belief, this entity
received these funds.

37. Defendant SCC at Home, LLC (“SCC”) is a California entity doing

business in Campbell, California. SCC applied for PPP funds twice, and was

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approved for $150,000 — $350,000 on 5/1/2020 and approved for another $150,000
— $350,000 on 6/30/2020. Upon information and belief, this entity received these
funds.

38. Defendant Sweet Things (“Sweet Things”) is a California entity
doing business in Tiburon, California. Sweet Things applied for PPP funds twice,
and was approved for $150,000 — $350,000 on 5/3/2020 and approved for another
$150,000 — $350,000 on 5/3/2020. Upon information and belief, this entity
received these funds.

39. Defendant The Independent, LLC (“Independent”) is a California
entity doing business in San Francisco, California. Independent applied for PPP
funds twice, and was approved for $150,000 — $350,000 on 5/3/2020 and approved
for another $150,000 — $350,000 on 5/3/2020. Upon information and belief, this
entity received these funds.

40. Defendant The Roman Catholic Welfare Corporation of Oakland
(“Roman Catholic Welfare Corp.”) is a California entity doing business in
Oakland, California. Roman Catholic Welfare Corp. applied for PPP funds
approximately 25 times on behalf of approximately 660 employees between
4/15/20 and 6/30/20. Upon information and belief, this entity received these funds.

41. Defendant TKK, LLC (“TKK”) is a California entity doing business

in Livermore, California. TKK applied for PPP funds twice, and was approved for

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Case 4:20-cv-06451-YGR Document1 Filed 09/10/20 Page 13 of 25

$150,000 — $350,000 on 6/30/2020 and approved for another $150,000 — $350,000

on 6/30/2020. Upon information and belief, this entity received these funds.

42.

Defendant Treeline Security (“Treeline”) is a California entity doing

business in San Francisco, California. Treeline applied for PPP funds twice, and

was approved for $150,000 — $350,000 on 4/30/2020 and approved for another

$350,000 - $1 million on 5/3/2020. Upon information and belief, this entity

received these funds.

43. The following is a chart summarizing Defendants:
APP.

AMOUNT | DEFENDANT CITY DATE
$150,000-
350,000 BAY WIRE, INC. HAYWARD 4/27/2020
$150,000-
350,000 BAY WIRE, INC. HAYWARD 6/30/2020
$150,000-
350,000 BIG DOG CONSTRUCTION BERKELEY 4/30/2020
$150,000-
350,000 BIG DOG CONSTRUCTION BERKELEY 6/29/2020
$350,000-1 | DYNAMIC INTEGRATED SOLUTIONS,
million LLC SAN JOSE 5/1/2020
$350,000-1 | DYNAMIC INTEGRATED SOLUTIONS,
million LLC SANTA CLARA | 4/30/2020
$150,000- FILLMORE STREET RESTAURANT SAN
350,000 PARTNERS LP FRANCISCO 5/6/2020
$150,000- FILLMORE STREET RESTAURANT SAN
350,000 PARTNERS LP FRANCISCO 5/3/2020
$350,000-1
million G FAMILY, INC. SAN RAFAEL 5/3/2020

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Case 4:20-cv-06451-YGR Document1 Filed 09/10/20 Page 14 of 25

$350,000-1

million G FAMILY, INC. SAN RAFAEL 5/3/2020
$150,000-

350,000 GIO CHA DUC HUONG CORPORATION | SAN JOSE 5/3/2020
$150,000-

350,000 GIO CHA DUC HUONG CORPORATION | SAN JOSE 6/30/2020
$1-2

million INFOWORKS.IO, INC. PALO ALTO 6/29/2020
$1-2

million INFOWORKS.IO, INC. PALO ALTO 6/30/2020
$150,000- | IWAMOTOSCOTT ARCHITECTURE, SAN

350,000 LLP FRANCISCO 4/29/2020
$150,000- | IWAMOTOSCOTT ARCHITECTURE, SAN

350,000 LLP FRANCISCO 4/28/2020
$150,000- | KARP CAPITAL MANAGEMENT SAN

350,000 CORPORATION FRANCISCO 5/18/2020
$150,000- | KARP CAPITAL MANAGEMENT SAN

350,000 CORPORATION FRANCISCO 5/19/2020
$150,000-

350,000 LA BAGUETTE, LLC PALO ALTO 4/14/2020
$150,000-

350,000 LA BAGUETTE, LLC PALO ALTO 4/14/2020
$350,000-1 | LABORATORY FAMILY SERVICES,

million INC. LIVERMORE 5/26/2020
$150,000- | LABORATORY FAMILY SERVICES,

350,000 INC. LIVERMORE 6/30/2020
$2-5

million LARK AVENUE CAR WASH CAMPBELL 5/3/2020
$350,000-1

million LARK AVENUE CAR WASH CAMPBELL 5/3/2020
$350,000-1

million LARK AVENUE CAR WASH CAMPBELL 5/3/2020
$150,000-

350,000 LIGHTNING MOTORS CORPORATION _ | SAN JOSE 5/3/2020
$150,000-

350,000 LIGHTNING MOTORS CORPORATION _| SAN JOSE 4/28/2020

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$350,000-1

million MS PARTNERS, INC. BURLINGAME 5/3/2020
$350,000-1

million M5 PARTNERS, INC. BURLINGAME 5/3/2020
$350,000-1

million MALEKO BUSINESS SERVICES UNION CITY 6/11/2020
$150,000-

350,000 MALEKO BUSINESS SERVICES UNION CITY 4/10/2020
$350,000-1

million MAS MAC, INC. WATSONVILLE | 4/27/2020
$350,000-1

million MAS MAC, INC. WATSONVILLE | 4/30/2020
$2-5 SAN

million MG-HILA LLC FRANCISCO 4/15/2020
$1-2 SAN

million MG-HILA LLC FRANCISCO 4/11/2020
$1-2

million MY CHEVROLET, INC. SALINAS 4/27/2020
$1-2

million MY CHEVROLET, INC. SALINAS 5/3/2020
$150,000-

350,000 ONEPACS LLC PALO ALTO 5/3/2020
$150,000-

350,000 ONEPACS LLC PALO ALTO 4/28/2020
$350,000-1

million ORTON ENTERTAINMENT LLC EMERYVILLE _| 4/27/2020
$150,000-

350,000 ORTON ENTERTAINMENT LLC RICHMOND 4/28/2020
$150,000-

350,000 POKE HOUSE, INC. SAN JOSE 5/1/2020
$150,000-

350,000 POKE HOUSE, INC. SAN JOSE 4/27/2020
$150,000- CASTRO

350,000 PRIORITY ACQUISITIONS, INC. VALLEY 5/21/2020
$150,000- CASTRO

350,000 PRIORITY ACQUISITIONS, INC. VALLEY 5/15/2020

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$350,000-1

million QOTIENT, INC. SAN JOSE 6/22/2020
$350,000-1

million QOTIENT, INC. SAN JOSE 6/30/2020
$150,000- SAN

350,000 RADEFF DESIGN STUDIOS FRANCISCO 5/3/2020
$150,000- SAN

350,000 RADEFF DESIGN STUDIOS FRANCISCO 6/30/2020
$150,000-

350,000 REDWOOD SERVICES, INC. BURLINGAME 5/3/2020
$150,000-

350,000 REDWOOD SERVICES, INC. BURLINGAME _§| 4/30/2020
$150,000- | ROMAN CATHOLIC WELFARE

350,000 CORPORATION SAN LEANDRO | _ 5/3/2020
$150,000- | ROMAN CATHOLIC WELFARE .
350,000 CORPORATION SANTA ROSA _| 4/27/2020
$150,000- | ROMAN CATHOLIC WELFARE

350,000 CORPORATION ALAMEDA 5/1/2020
$1-2 ROOTS COMMUNITY HEALTH

million CENTER OAKLAND 4/10/2020
$1-2 ROOTS COMMUNITY HEALTH

million CENTER OAKLAND 4/27/2020
$150,000-

350,000 SCC AT HOME LLC CAMPBELL 6/30/2020
$150,000-

350,000 SCC AT HOME LLC SUNNYVALE 5/1/2020
$150,000-

350,000 SWEET THINGS TIBURON 5/3/2020
$150,000-

350,000 SWEET THINGS TIBURON 5/3/2020
$150,000- SAN

350,000 THE INDEPENDENT LLC FRANCISCO 5/3/2020
$150,000- SAN

350,000 THE INDEPENDENT LLC FRANCISCO 5/3/2020
$2-5 THE ROMAN CATHOLIC WELFARE

million CORPORATION OF OAKLAND OAKLAND 4/15/2020

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$350,000-1 | THE ROMAN CATHOLIC WELFARE

million CORPORATION OF OAKLAND FREMONT 4/28/2020
$350,000-1 | THE ROMAN CATHOLIC WELFARE WALNUT

million CORPORATION OF OAKLAND CREEK 4/28/2020
$350,000-1 | THE ROMAN CATHOLIC WELFARE

million CORPORATION OF OAKLAND DANVILLE 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND OAKLAND 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND HAYWARD 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND HAYWARD 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND LAFAYETTE 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND OAKLAND 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND HAYWARD 4/29/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND SAN LEANDRO | 4/29/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND PIEDMONT 4/29/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND ANTIOCH 4/27/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND FREMONT 4/27/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND SAN LORENZO | 4/30/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND FREMONT 4/27/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND RICHMOND 4/30/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND HAYWARD 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND NEWARK 4/28/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND OAKLAND 4/30/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND DUBLIN 4/30/2020
$150,000- | THE ROMAN CATHOLIC WELFARE

350,000 CORPORATION OF OAKLAND RODEO 4/28/2020
$150,000-

350,000 TKK LLC LIVERMORE 6/30/2020

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$150,000-

350,000 TKK LLC LIVERMORE 6/30/2020
$350,000-1 SAN

million TREELINE SECURITY FRANCISCO 5/3/2020
$150,000- SAN

350,000 TREELINE SECURITY FRANCISCO 4/30/2020

44. According to the PPP application discussed below, owners of
Defendants include partners or members owning 20% or more equity in the
company. Upon information and belief, and after further discovery in this matter,
Relator anticipates he will need to amend this Complaint to add in such owners or
representatives as co-defendants if they were complicit in the fraudulent
misrepresentations listed herein.

JURISDICTION AND VENUE

45. This Court has jurisdiction over the subject matter of this action
pursuant to 28 U.S.C. § 1331 and 31 U.S.C. § 3732, the latter of which specifically
confers jurisdiction on this Court for actions brought pursuant to 31 U.S.C. §§
3729 and 3730. Although this issue is no longer jurisdictional after the 2009
amendments to the FCA, to Realtor’s knowledge there has been no statutorily
relevant public disclosure of the “allegations or transactions” in this Complaint, as
those concepts are used in 31 U.S.C. § 3730(e), as amended by Pub. L. No. 111-

148, § 10104Q)(2), 124 Stat. 119, 901-02.

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46. Moreover, whether or not such a disclosure has occurred, Relator
would qualify as an “original source” of the information on which the allegations
or transactions in this Complaint are based. Plaintiff researched and discovered
through a records request the pertinent dates of formation and other related entity
information of each Defendant.

47, This Court has personal jurisdiction over Defendants pursuant to 31
U.S.C. § 3732(a) because that section authorizes nationwide service of process and
because Defendants are California entities.

48. Venue is proper in the Northern District of California pursuant to 28
U.S.C. § 1391(b)-(c) and 31 U.S.C. § 3732(a) because Defendants can be found in
and/or transacted business in this district, and because violations of 31 U.S.C. §§
3729 et seq. alleged herein occurred within this district. At all times relevant to this
Complaint, Defendants regularly conducted substantial business within this
district.

THE PAYCHECK PROTECTION PROGRAM

49. Congress added sections 1102 and 1106 of the Coronavirus Aid,
Relief, and Economic Security Act (“CARES Act”). Section 1102 contains a new
program called the Paycheck Protection Program (“PPP”) and is party of the U.S.
Small Business Administration’s (“SBA”) 7(a) Loan Program. These two sections

are intended to provide economic relief to small businesses nationwide adversely

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impacted by the coronavirus pandemic and the COVID-19 Emergency Declaration
issued by President Trump on March 13, 2020.

50. Due to the COVID-19 emergency, many small businesses nationwide
are experiencing economic hardship as a direct result of the Federal, State, and
local public health measures that are being taken to minimize the public’s exposure
to the coronavirus.

51. The SBA received funding and authority through the CARES Act to
modify existing loan programs and establish the new PPP loan program to assist
small businesses nationwide adversely impacted by the coronavirus pandemic.

52. Section 1102 of the Act temporarily permits SBA to guarantee 100%
of 7(a) loans under the PPP. Section 1106 of the CARES Act provides for
forgiveness of up to the full principal amount of qualifying loans guaranteed under
the PPP.

53. The CARES Act was intended to provide relief to America’s small
businesses expeditiously.

54. The CARES Act gives lenders delegated authority to process loan
applications for PPP funding. SBA allowed lenders to rely on certifications of the
borrowers in order to determine eligibility of the borrower and use of loan

proceeds, and to rely on specified documents provided by the borrower to

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determine qualifying loan amount, and eligibility for loan forgiveness. Lenders are
held harmless for borrowers’ failures to comply with PPP rules.

55. Defendants had to submit documentation necessary to establish
eligibility such as payroll processor records, payroll tax filings, form 1099s,
income and expenses documentation.

56. In general, Defendants calculated an amount to borrow by aggregating
payroll costs from the previous 12 months for employees whose principal place of
residence is the United States. Annual employee salaries are capped at $100,000.
The borrower then calculated the average monthly payroll cost and multiplied that
amount by a factor of 2.5.

57. One certification on the Application states, “Current economic
uncertainty makes this loan request necessary to support the ongoing operations of
the Applicant.”

58. Each Defendant certified on its PPP applications that “[d]Juring 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.” (Emphasis added.)

59. Defendants also “further certify that the information provided in this
application and the information provided in all supporting documents and forms is

true and accurate in all material respects.”

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60. Finally, all Applicants certify that they “understand that knowingly
making a false statement to obtain a guaranteed loan from SBA is punishable under
the law, including under 18 USC 1001 and 3571 by imprisonment of not more than
five years and/or a fine of up to $250,000; under 15 USC 645 by imprisonment of
not more than two years and/or a fine of not more than $5,000; and, if submitted to
a federally insured institution, under 18 USC 1014 by imprisonment of not more
than thirty years and/or a fine of not more than $1,000,000.”

ALLEGATIONS

61. According to the Small Business Administration (SBA), California-
based entities who applied for and received at least $150,000 in PPP funds totaled
approximately 87,691.

62. Plaintiff reviewed and analyzed data from the SBA to identify
California-based entities who applied more than once for PPP funds. Plaintiff then
cross-checked that data with the California Secretary of State’s website to confirm
various data points and information and fully identify entities who unlawfully
applied more than once for PPP funds. The result was the above-named Defendants
for this federal district of California.

63. Defendants each certified on their PPP applications that “[d]uring the

period beginning on February 15, 2020 and ending on December 31, 2020, the

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Applicant has not and will not receive another loan under the Paycheck Protection
Program.”

64. Also, according to the application, Defendants cannot have more than
500 employees to be eligible for PPP funds.

65. Defendants thus made material misrepresentations on their
applications for PPP funds, knowing lenders and the Federal Government would
rely on said representations in paying PPP funds to Defendants.

66. Relator reserves the right to amend this Complaint and expand these
allegations upon review of the actual applications and supporting documentation
submitted by Defendants.

False Claims Act

31 U.S.C. § 3729(a)(1)(A)-(B)

67. Relator realleges and incorporates by reference the allegations
contained in the foregoing paragraphs as though fully set forth herein.

68. This is a claim for treble damages and penalties under the False
Claims Act, 31 U.S.C. § 3729, et seq., as amended.

69. By virtue of the acts described above, Defendants knowingly
presented or caused to be presented, false or fraudulent claims to the United States
Government, or authorized agent of the United States Government, for payment or

approval.

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70. By virtue of the acts described above, Defendants knowingly made or
used, or caused to be made or used, false or fraudulent records or statements
material to false or fraudulent claims for payment by the Government.

71. Relator cannot at this time identify all of the false claims for payment
that were caused by Defendants’ conduct. The false claims were presented to third
party lending institutions. Relator does not have access to the records of all such
false or fraudulent statements or claims.

72. Lenders, acting on behalf of the Federal Government, were
guaranteed 100% of the PPP loans. Said lenders were unaware of the falsity of the
records, statements, and claims made or caused to be made by Defendants. Said
lenders paid the claims that would not be paid but for Defendants’ illegal conduct.

73. By reason of Defendants’ acts, the United States has been damaged,
and continues to be damaged, in a substantial amount to be determined at trial.

74. Additionally, the United States is entitled to the maximum penalty of
up to $11,000 for each and every violation arising from Defendants’ unlawful
conduct alleged herein.

PRAYER
WHEREFORE, qui tam Plaintiff/Relator prays for judgment against each

Defendant as follows:

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1. That this Court enter judgment against each Defendant in an amount
equal to three times the damages the United Sates has sustained because
of Defendant’s actions, plus a civil penalty of not less than $5,500 and
not more than $11,000 for each violation of 31 U.S.C. § 3729;

2. That Relator be awarded the maximum amount allowed pursuant to 31
U.S.C. § 3730(d);

3. That Relator be awarded all costs of this action, including attorney’s fees
and expenses; and

4. That Relator recover such other relief as the Court deems just and proper.

DEMAND FOR JURY TRIAL

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Relator hereby

demands a trial by jury.

Dated: 9/7/2020 Respectfully submitted,

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Our copy: 1-qui-tam-complaint-relator-bryan-quesenberry-pro-se-filed-und.pdf
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