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Press Release

Three California Companies Settle False Claims Act Allegations Relating to Improper Paycheck Protection Program Loans

For Immediate Release
Office of Public Affairs

Three California companies have agreed to pay a total of $530,000 to settle allegations that they knowingly violated the False Claims Act when they received and retained more than one Paycheck Protection Program (PPP) loan prior to Dec. 31, 2020, in violation of PPP rules.  

La Baguette, LLC, which operates a bakery in Palo Alto, has agreed to pay $430,000 to settle allegations that it received and retained a duplicate PPP loan in 2020 and then later improperly sought and received forgiveness for the duplicate loan. 

Dynamic Integrated Solutions, Inc., an industrial equipment supplier located in Santa Clara, has agreed to pay $50,000 in civil penalties to settle allegations that it received and retained a duplicate loan. The company agreed to repay the loan in full to its lender, relieving the U.S. Small Business Administration (SBA) of liability to the lender for the federal guaranty of approximately $985,000 on the duplicate loan.   

Priority Acquisitions, Inc., a licensed general contractor located in Castro Valley, has agreed to pay $50,000 in civil damages and penalties to settle allegations that it received and retained a duplicate loan. The company agreed to repay the loan in full to its lender, relieving the SBA of liability for the federal guaranty of approximately $200,625.   

Congress created the PPP in March 2020, as part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, to provide emergency financial support to the millions of Americans suffering the economic effects caused by the COVID-19 pandemic. The CARES Act authorized billions of dollars in forgivable loans to small businesses struggling to pay employees and other business expenses. Throughout 2020, PPP loan applicants were required to certify that they would not receive more than one PPP loan prior to Dec. 31, 2020.

“PPP loans were intended to provide critical relief to small businesses,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The department is committed to pursuing those who knowingly violated the requirements of the PPP or other COVID-19 assistance programs and obtained relief funds to which they were not entitled.”

“PPP loans were intended to help qualified businesses retain their employees and pay other bills during the pandemic,” said U.S. Attorney Stephanie M. Hinds for the Northern District of California. “This Office will continue to pursue any business that misused the program by obtaining PPP loans for which they were not eligible, as the three settlements announced today reflect.”

“Those who violate the False Claim Act by fraudulently receiving and retaining SBA pandemic program funds will be held accountable,” said Special Agent in Charge Weston King of SBA OIG’s Western Region. “This settlement demonstrates that wrongfully obtaining taxpayer dollars will not go unnoticed, and violators will be identified. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their support and dedication to pursuing justice in this case.”

The settlements resolve claims brought under the qui tam or whistleblower provisions of the False Claims Act by J. Bryan Quesenberry. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Quesenberry v. Bay Wire, Inc., et al., No. 2:20-cv-712 (N.D. Cal.). Quesenberry will receive a total of approximately $80,000 in connection with the three settlements.  

The resolution obtained in this matter was the result of a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Northern District of California, with assistance from the SBA’s Office of General Counsel and Office of the Inspector General.

This matter was handled by Trial Attorney Jared S. Wiesner of the Civil Division and Assistant U.S. Attorney Michael T. Pyle for the Northern District of California.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The task force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit

Tips and complaints from all sources about potential fraud affecting COVID-19 government relief programs can be reported by visiting the webpage of the Civil Division’s Fraud Section, which can be found here. Anyone with information about allegations of attempted fraud involving COVID-19 can also report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline at 866-720-5721 or via the NCDF Web Complaint Form at:

The claims resolved by the settlement are allegations only, and there has been no determination of liability.


Updated February 1, 2023

False Claims Act
Press Release Number: 23-129