Friday, June 12, 2026: CRHA defaults in lawsuit seeking $1.5 million over ineligible PPP loans, judgment still pending
The Charlottesville Redevelopment and Housing Authority never responded to a summons served in February
Today’s sponsor: Big builds, small repairs, and everything in between, Nola Builds does it all
Happy birthday, Helsinki! Charlottesville Community Engagement has never been produced from that particular country but that certainly would be an interesting side quest. On June 12, 1550, King Gustav I of Sweden founded the town as a trading post known as Helsingfors and ordered some of the residents of neighboring communities to move there. These days Helsinki and surrounding communities make up the northernmost metropolitan area with over a million residents. Now, how shall we celebrate?
In this edition:
The Charlottesville Redevelopment and Housing Authority is party to a wider lawsuit alleging it and other government entities in Virginia were not eligible to receive federal payment protection loans in the early days of COVID-19
CRHA failed to respond to a summons and has been found in default which could cost the government agency $1.5 million in damages and other fees
Other parties named to the suit hired attorneys to fight the claims in court but mail sent to CRHA was stamped as undeliverable
A motion for default judgment against CHRA has been filed but a federal judge has not yet made a ruling
First shout-out: Friends of Downtown Charlottesville holding lantern making workshops
If you haven’t already heard, the Charlottesville Downtown Mall is celebrating a 50th birthday on July 3rd! There is a full schedule of events planned to celebrate and the Friends of Downtown Charlottesville want YOU to be part of the festivities!
Join a lantern workshop to create your own lantern for the community lantern parade, taught by local artists Miranda Elliott-Rader, Melissa Goldman, and Annie Temmink.
Participants will be able to choose from a variety of example designs or make their own design. All materials will be provided so just bring your creativity!
Dates: June 14, 21, and 28
Time: 1pm - 5pm
Cost: $25/pp, ages 13+
If the cost of the workshop is a barrier, please reach out to the group at info@friendsofcville.org for a scholarship!
Charlottesville Redevelopment and Housing Authority sued over pursuit and acceptance of PPP loans
The government entity that oversees public housing and other rental units in the City of Charlottesville could owe the federal government over $1.5 million in damages and fines after failing to respond to a lawsuit that alleges the agency used false pretenses to receive early COVID relief funds.
“The time for the defendant to appear, answer, or otherwise defend having expired, the undersigned Clerk does hereby enter default,” reads a March 24 legal document in the case against the Charlottesville Redevelopment and Housing Authority.
On March 11, 2024, an Oregon-based realtor filed a lawsuit in the U.S. District Court for the Western District for Virginia against multiple organizations for using false statements in order to get Payment Protection Program (PPP) loans in the early days of the COVID-19 pandemic.
The Charlottesville Redevelopment and Housing Authority is the only one on the list that did not respond to a summons issued this past February ordering a response to the claims. As a result, plaintiff J. Bryan Quesenberry is seeking a default judgment enabling a penalty that is three times the amount CRHA received.
CRHA Executive Director John Sales did not respond to questions sent on Thursday afternoon, nor has the City of Charlottesville.
Qui tam case filed under the False Claims Act
Acting as his own attorney under a provision of False Claims Act, Quesenberry is seeking to recover money he argues was taken incorrectly by government agencies that were not eligible to receive.
“This action seeks to remove more than $6 million wrongfully loaned to the Defendants through the Federal Government’s Payroll Protection Program,” reads paragraph 2 of an amended complaint. “The PPP provided a pathway to borrowers to receive forgiveness of these loans.”
Other entities named are the Breaks Interstate Commission of Dickenson County, the Rockbridge Regional Library in Rockbridge County, the Crossroads Community Services Board in Prince Edward County, and the Rappahannock-Rapidan Community Services Board (also known as Encompass Community Supports).
The complaint alleges that all are government-owned or government-controlled and were not eligible for the PPP loans but were instead able to apply for other relief such through the American Rescue Plan Act and State and Local Fiscal Recovery Programs.
The suit is known as a qui tam case which allows private individuals to sue on behalf of the federal government to recover damages and to share some of what is collected. Quesenberry is licensed to practice law in Utah and Oregon. The plaintiff also attains a title called “Relator.”
PPP was a part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act as part of the initial federal relief at a time when the pandemic forced a shutdown of the economy.
“The [Small Business Administration] 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,” reads paragraph 28 of the amended complaint.
Anyone seeking a loan had to certify they were eligible under the rules in effect. The complaint points to both a provision in the CARES Act and the Code of Federal Regulations that prevented any level of government from seeking a PPP loan.
“A government-owned entity is an entity owned by a municipality or other political subdivision,” reads paragraph 39.
More from the claim:
In paragraph 44, Quesenberry alleges that CRHA is a government-entity created after a referendum on April 15, 1954. CRHA is governed by a board appointed by City Council, has the power of eminent domain, is subject to Virginia’s public record laws, and is considered a political subdivision of Virginia.
Paragraph 46 points to CRHA’s own description of itself as a government entity in its own policies.
Paragraph 78 states that CRHA was approved for a first loan of $202,293 on April 30, 2020 and the loan was forgiven on December 31 of that year for a slightly higher amount due to interest.
Paragraph 79 states that CRHA was approved for a second loan of $270,932 on March 15, 2021 and this was forgiven on November 8, 2021 at a slightly higher amount.
Count 1 alleges that all of the defendants knowingly submitted false claims and seeks damages three times the amount received by each entity.
Count 2 alleges that defendants made false records in support of their claim.
Quesenberry wants the cost of his attorney’s fees and expenses covered as well as any other relief the Court would approve. He also sought a jury trial for all defendants.
More after a break.
Second shout out: Re-Leaf’s tree preservation program is in full swing!
With a $190,000, three-year grant from the Virginia Department of Forestry to preserve existing, mature trees in two low-canopy neighborhoods, ReLeaf Cville had provided free tree care to 100 trees and 56 homeowners this winter in the Fifeville and 10th and Page neighborhood.
They’ve been assisted by three arborists companies (Charlottesville Tree Service, Davey Tree Experts and Van Yahres Tree Company) in the provision of expert care.
While planting young trees is vital for our future, preserving our existing mature trees is the fastest way to protect Charlottesville from the rising heat as the climate changes.
Help ReLeaf Cville protect the shade we already have by preserving more trees. Learn more about their preservation initiatives and support their work at their website!
All other parties respond to the case except CRHA
As part of the qui tam process, cases are sealed for two months while officials in the federal government evaluate the claims to determine if they will join in or otherwise get officially involved.
In this case, the United States government asked for more time and gave notice they would not intervene on June 23, 2025. The case remained sealed until a series of steps were taken including the serving of defendants. That took place after Quesenberry filed the amended complaint on November 17, 2025.
An electronic summons was issued against the defendants on November 20, 2025. None responded until after a 70-day notice was issued on January 22, 2026.
A proof of service on Rockbridge Regional Library was recorded on January 22, 2026. Others followed in the days afterward for other defendants.
John Sales, Executive Director of the Charlottesville Redevelopment and Housing Authority, was served on February 17, 2026. An answer was due on March 10.
Attorneys from other defendants began to respond to the case. On February 27, 2026, counsel for the Rappahannock Rapidan Community Services Board filed a motion to dismiss that was succinct.
“Plaintiffs have failed to state a claim upon which relief can be granted,” reads the motion.
A follow-up from the RRCSB on March 19, 2026 offers eight pages debunking Quesenberry’s claim in many details.
On March 19, Quesenberry filed for a motion of default against CRHA for not responding because an answer had not been given by March 10.
“That deadline has passed and, as the docket sheet reflects, Charlottesville Redevelopment has failed to plead or otherwise defend this action,” reads the motion.
The court clerk filed an entry of default on March 24. Copies were to be mailed to all parties including the CRHA.
On March 26, attorneys for the Breaks Interstate Park Commission filed a motion to dismiss the case for lack of jurisdiction and failure to state a claim.
On March 31, Magistrate Judge Joel C. Hoppe agreed to reverse a default against the Rockbridge Regional Library.
On April 6, the court received notice that mail to CRHA sent to 500 First Street South had been returned with a notice from the postmaster: “Return To Sender - Attempted - Not Known - Unable to Forward.”
Attorneys for other defendants continued to work on behalf of their clients to respond to the lawsuit. By April 30, 2026, none appeared on behalf of the CRHA. On that day, Quesenberry filed for a motion of default judgement that sharpened what he believed the United States government is owed.
“The declaration filed herewith shows damages in the sum certain of $1,528,642.73,” reads what the docket identifies as document #64. That amount includes $1,428,637.98 in PPP loans, lender fees of $70,983.75, civil penalties of $28,616, and costs of $405.
This document also states that Quesenberry as the Relator is entitled to between 25 and 30 percent of the proceeds.
“Those sums cannot be calculated until the civil penalties and damages are paid and therefore do not need to be incorporated into the judgment, which is without prejudice to the subsequent collection of such sums by the United States and Relator,” reads section (f) of the calculations.
The record shows activity in court from other defendants. For instance, on February 27, 2026, the Rappahannock Rapidan Community Services Board filed a motion seeking dismissal for failure to state a claim. This was incorporated into a June 5 hearing along with similar motions from the Rockbridge Regional Library and others.
As a result of that hearing:
The court agreed to a motion from Quesenberry to sever the Crossroads Community Services Board. An order has not yet been made but the amended complaint contains additional allegations against that organization.
Arguments were made in the Rappahannock and Bridges cases. An order has not yet been made.
The court addressed a “possible servicing addressing issue” related to CRHA.
On June 10, an oral order was entered with the the following entry in PACER, the way people can get access to the materials in federal court cases.
“Relator’s Motion for Default Judgment as to Charlottesville Redevelopment & Housing Authority (Dkt. 64) is taken under advisement. Mail to the Authority has been returned as undeliverable. Relator is hereby ORDERED to serve the Motion for Clerk’s Entry of Default (Dkt. 49), the Clerk’s Entry of Default (Dkt. 53), and the Motion for Default Judgment (Dkt. 64) to the Authority in compliance with Rule 4 of the Federal Rules of Civil Procedure, and to mail these pleadings to the post office box listed as the mailing address for the Authority. Entered by District Judge Robert S. Ballou on 06/10/2026.”
Judge Ballou has not yet ruled on the motion for default judgement.
Requests for comment were sent out to both Charlottesville Redevelopment and Housing Authority and the City of Charlottesville Thursday afternoon.
This is a developing story.
Articles by other journalists you are encouraged to read next:
Charlottesville and Albemarle anticipate a banner year for visitors—but structural challenges and behind-the-scenes disputes could endanger regional tourism’s future, Nathan Alderman, C-Ville Weekly, June 10, 2026
Albemarle County water bills could increase this summer, Dakota Griffin, WVIR 29NBC, June 10, 2026
Six adults, three children displaced after fire at Albemarle boarding, day school, Alex Roever, WRIC, June 10, 2026
Parents express anger with ACPS, Hollymead after Swiney arrest, Jackson Hephner, Cville Right Now, June 10, 2026
Valley Link to hold another open house on transmission line project amid community pushback, Kate Neuchterlein, WVIR 29NBC, June 10, 2026
Albemarle Superintendent asked to resign in wake of Swiney arrest, Jackson Hephner, Cville Right Now, June 11, 2026
#1069 is a single-story edition
What did John Sales do when he received the summons? Did the Board of Commissioners know about the lawsuit? Did CRHA’s legal counsel? Is there any chance that CRHA might have its day in court? If Judge Ballou grants default judgment, who pays the $1.5 million in damages?
I don’t know the answers to those questions but that is some of what is on my mind as I prepare to hit publish. I can’t write about anything else until I get this story out there.
The parallel that comes to mind with this story is the default judgement against Charlottesville’s Development Code last June. In that case, an attorney with Gentry Locke working to defend the city failed to file an answer in time. Charlottesville apologized in court and Circuit Court Judge Claude Worrell reconsidered.
Can that happen in this case? Is there a path out of default? Even if that was to happen, what would the jury trial be like? More questions.
I’ve never heard of a qui tam case before doing this research. It also appears that no one has written about the other cases, either.
I also tried to do research into the CRHA’s finances to see if the loans were listed in any way. The only operating budget listed on the Key Documents page is from FY2021 and was adopted before the first loan. Which leads to more questions possibly for more stories in the future. Why aren’t the other budgets posted? How was the PPP money used and it is accounted for in CRHA’s books?
What do you want to know?
For now, it is time to hit send. I hope to follow-up as I can on this story, but there are others I need to get to as this long hot day gets underway. I am hopeful other journalists or other interested parties in this community will go right to the same primary sources I used.
If so, head to Public Access to Court Electronic Records, or PACER. If you have an account, navigate to the Western District of Virginia. The case number is “3:24-cv-00016-RSB-JCH” and the case name is United States of America et al v Breaks Interstate Park Commission et al.
Paid subscriptions help me cover the cost of research. Charitable contributions in support of journalism through the Tiny News Collective will help me hire people to help me do the work.
Fair warning that there will be many references to the Men’s World Cup the next 38 days or so.
This edition originally went out with the wrong spelling of the plaintiff in the suit against groups that allegedly received PPP loans unlawfully. That name is J. Bryan Quesenberry. I regret the error.