Settlement agreement: United States and California Advisors, William Gonzalez and Delaney Hunter (PPP)
Summary
A settlement agreement among the United States (acting through the Department of Justice on behalf of the Small Business Administration), California Advisors, LLC, William Gonzalez, and Delaney Hunter, collectively called Defendants. It states that California Advisors, LLC received an SBA-guaranteed PPP loan of $144,340 in May 2020 through American River Bank, and that the SBA forgave the loan in February 2021. The United States alleges violations of the False Claims Act and of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989; the agreement is not an admission of liability. California Advisors, LLC agrees to pay a total of $534,266.50 plus interest, and Delaney Hunter and William Gonzalez each agree to pay $25,000.
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“Settlement agreement: United States and California Advisors, William Gonzalez and Delaney Hunter (PPP).”
Original at www.justice.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/settlement-agreement-united-states-and-california-advisors-william-gon-3b2cfadf72/
, SHA-256 a99d3ee0f65e16cafb16e393310995c3720da89aa994de3b7264bbcf873794a4.Full text
Docusign Envelope ID: F60D321B-C68C-4052-BFAA-FCB02C151C6E
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’),
California Advisors, LLC, William Gonzalez, and Delaney Hunter (collectively,
“Defendants”), (collectively referred to as “the Parties”) through their authorized
representatives.
RECITALS
A. California Advisors, LLC is a limited liability company organized under
the laws of California and located at 915 L Street, Suite 1270, Sacramento, California
95814. California Advisors, LLC is a lobbying firm.
B. Delaney Hunter is an individual residing in Yolo County in California.
Delaney Hunter is a partner of California Advisors, LLC. |
C. William Gonzalez is an individual residing in Sacramento County in
California. William Gonzalez was a managing partner of California Advisors, LLC.
D. In 2020, Delaney Hunter and William Gonzalez owned and controlled
California Advisors, LLC and were California Advisors, LLC’s only two managing
members. In 2021, Delaney Hunter owned and controlled California Advisors, LLC.
E. On April 10, 2020, Delaney Hunter, as an authorized representative of
California Advisors, LLC, applied for a Paycheck Protection Program (“PPP”) loan and
certified in good faith that California Advisors, LLC was eligible for a PPP loan.
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F, In May 2020, California Advisors, LLC received an SBA-guaranteed
Paycheck Protection Program (“PPP”) loan through American River Bank in the amount
of $144,340.
G. SBA paid an estimated $7,217 in processing fees to American River Bank
in connection with the PPP loan.
H. On December 18, 2020, Delaney Hunter, as an authorized representative
of California Advisors, LLC, applied for PPP loan forgiveness and certified in good faith
that it was eligible for the PPP loan and PPP loan forgiveness.
I. In February 2021, SBA forgave the entirety of the PPP loan, paying in full
$144,340 in principal and $1,090.57 in interest.
J. The United States contends that it has certain civil claims against
Defendants arising from Defendants’ false certifications in connection with the PPP loan
application and PPP loan forgiveness application submitted in connection with the PPP
loan issued to California Advisors, LLC. More specifically, the United States alleges:
1. Defendants violated the False Claims Act, 31 U.S.C. §§ 3729-3733, by
knowingly presenting or causing to be presented a false or fraudulent claim for
payment or approval to the Small Business Administration.
2. Defendants violated the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, 12 U.S.C. § 1833a, by making false statements in
connection with its PPP loan.
The conduct described above is referred to below as the “Covered Conduct.”
K. This Settlement Agreement is neither an admission of liability by
Defendants, nor a concession by the United States that its claims are not well founded.
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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
‘|. California Advisors, LLC shall pay to the United States a total of
$534,266.50 plus interest as detailed below (“California Advisors, LLC Settlement
Amount”), as follows:
a. California Advisors, LLC shall pay to the United States $381,618.93, of
which $152,647.57 is restitution, to resolve liability for the Covered Conduct
described in Paragraph J.1, above, and
b. California Advisors, LLC shall pay to the United States $152,647.57, none of
which is restitution, to resolve the Covered Conduct described in Paragraph
J.2, above.
California Advisors, LLC shall pay $250,000 of the California Advisors, LLC Settlement
Amount by electronic funds transfer no later than 14 days after the Effective Date of this
Agreement pursuant to written instructions to be provided by the United States
Attorney’s Office for the Eastern District of California. The remainder of the California
Advisors, LLC Settlement Amount, $284,266.50 plus interest on this amount at a rate of
four percent (4%) per annum calculated from August 12, 2024 to February 8, 2025,
amounting to a total payment of $289,951.83, shall be paid no later than 180 days after
the Effective Date of the Agreement. If California Advisors, LLC intends to make this
second payment early, California Advisors, LLC will provide the United States, through
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the United States Attorney’s Office for the Eastern District of California, with its planned
payoff date and obtain a revised interest calculation and payment instructions.
2. Delaney Hunter shall pay to the United States a total of $25,000 (“Hunter
Settlement Amount”), none of which is restitution, to resolve liability for the Covered
Conduct described in Paragraph J. Delaney Hunter shall pay the Hunter Settlement
Amount by electronic funds transfer no later than 14 days after the Effective Date of this
Agreement pursuant to the written instructions provided by the United States Attorney’s
Office for the Eastern District of California.
3. William Gonzalez shall pay to the United States a total of $25,000
(“Gonzalez Settlement Amount”), none of which is restitution, to resolve liability for the
Covered Conduct described in Paragraph J. William Gonzalez shall pay the Gonzalez
Settlement Amount by electronic funds transfer no later than 14 days after the Effective
Date of this Agreement pursuant to the written instructions provided by the United States
Attorney’s Office for the Eastern District of California.
4, In the event that any of the Defendants fail to satisfy the payment
obligations set forth in Paragraphs 1 through 3, any such party (the “Defaulting Party”)
shall be in Default of its payment obligations (“Default”). Upon Default, the United
States will provide the Defaulting Party, through its legal counsel or other representative
previously designated by the Defaulting Party, by electronic mail a written Notice of
Default, and the Defaulting Party 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 the Defaulting Party fails to cure the Default within three business days from
the date the Notice of Default is sent by the United States, all settlement amounts noted
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above 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.
5. Upon execution of this Settlement Agreement, Defendants 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 any of the Defendants is in
uncured Default as defined above. Defendants agree 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 the defaulting Defendant
and bring any civil and/or administrative claim, action, or proceeding against the
defaulting Defendant 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, Defendants agree 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 Defendants
within 180 days of written notification that this Agreement has been rescinded, and (b)
relate to the Covered Conduct.
6. Subject to the exceptions in Paragraph 7 (concerning reserved claims)
below, and upon the United States’ receipt of the settlement amounts outlined above, the
United States releases Defendants from any civil or administrative monetary claim the
United States has for the Covered Conduct under the False Claims Act, 31 U.S.C. §§
3729-3733; the Financial Institutions Reform, Recovery, and Enforcement Act of 1989,
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12 U.S.C. § 1833a; the Program Fraud Civil Remedies Act, 31 U.S.C. §§ 3801-3812; or
the common law theories of payment by mistake, unjust enrichment, and fraud.
7. Notwithstanding the releases given in Paragraph 6 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);
Any criminal liability;
Except as explicitly stated in this Agreement, any administrative
liability or enforcement right, including the suspension and
debarment rights of any federal agency;
Any liability to the United States (or its agencies) for any conduct
other than the Covered Conduct;
Any liability based upon obligations created by this Agreement;
and
Any liability of individuals other than Delaney Hunter and William
Gonzalez as set forth herein.
8. Defendants waive and shall not assert any defenses they 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.
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9. Defendants fully and finally release 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 they have 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. Defendants hereby expressly waive all rights
they may have by virtue of Section 1542 of the California Civil Code, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE
CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.
10. 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 Defendants,
and its 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) Defendants’ 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
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(5) any payments Defendants make to the United States
pursuant to this Agreement,
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 Defendants, and Defendants shall not
charge such Unallowable Costs directly or indirectly to any contract with the United
States.
om Treatment of Unallowable Costs Previously Submitted for
Payment: Within 90 days of the Effective Date of this Agreement, Defendants shall
identify and repay by adjustment to future claims for payment or otherwise any
Unallowable Costs included in payments previously sought by Defendants or any of its
subsidiaries or affiliates from the United States. Defendants agree that the United States,
at a minimum, shall be entitled to recoup from Defendants 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
Defendants’ books and records and to disagree with any calculations submitted by
Defendants or any of its subsidiaries or affiliates regarding any Unallowable Costs
included in payments previously sought by Defendants, or the effect of any such
Unallowable Costs on the amount of such payments.
11. This Agreement is intended to be for the benefit of the Parties only.
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12. Each Party shall bear its own legal and other costs incurred in connection
with this matter, including the preparation and performance of this Agreement.
13. Each Party and signatory to this Agreement represents that it freely and
voluntarily enters into this Agreement without any degree of duress or compulsion.
14. 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 Eastern 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.
15. | This Agreement constitutes the complete agreement between the Parties.
This Agreement may not be amended except by written consent of the Parties.
16. | The undersigned counsel represent and warrant that they are fully
authorized to execute this Agreement on behalf of the persons and entities indicated
below.
17. This Agreement may be executed in counterparts, each of which
constitutes an original and all of which constitute one and the same Agreement.
18. This Agreement is binding on Defendants' successors, transferees, heirs,
and assigns.
19. All Parties consent to the United States’ disclosure of this Agreement, and
information about this Agreement, to the public.
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20. 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]
10
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THE UNITED STATES OF AMERICA
PHILLIP A. TALBERT
United States Attorney
«
ne
DATED: 8/ [4 / 2024 By:
TARA A. AMIN
Assistant United States Attorney
Eastern District of California
CALIFORNIA ADVISORS, LLC; DELANEY HUNTER; and WILLIAM
GONZALEZ
8/16/2024
DATED: BY: arc aorbep gan
GOB TE TATOO COR
Partner of California Advisors, LLC
DATED:
8/16/2024
BY: [Pay tr
OBBSETATSBEGHER--
Delaney Hunter
Managing Partner of California Advisors,
LLC
Signed by:
DATED:
8/16/2024
[16l BY:
WL Corrales
7 BBSESSOET BSC43B...
William Gonzalez
Former Partner of California Advisors, LLC
APPROVED AS TO FORM:
1]
Docusign Envelope ID: F60D321B-C68C-4052-BFAA-FCB02C151C6E
DocuSigned by:
DATED; 8/16/2024 By: —
Candice Fields
Candice Fields Law, PC
Counsel for California Advisors, LLC, Delaney
Hunter, and William Gonzalez
12
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