An indictment has been unsealed in the Northern District of Texas, charging Nathan Reis and Stephanie Hockridge, co-founders of Blueacorn, with a scheme to fraudulently obtain COVID-19 relief funds through the Paycheck Protection Program (PPP). According to court documents, Reis and Hockridge allegedly submitted false PPP loan applications for themselves and their businesses by fabricating documents.
The indictment claims that Reis and Hockridge co-founded Blueacorn in April 2020 to help small businesses secure PPP loans. However, they allegedly fabricated documents such as payroll records and bank statements to obtain larger loans. They also reportedly charged borrowers illegal kickbacks based on the funds received.
Reis, Hockridge, and others expanded Blueacorn’s operations through lender service provider agreements with two lenders. Under these agreements, Blueacorn collected PPP applications from potential borrowers on behalf of lenders in exchange for a percentage of the fees paid by the SBA for approved loans. The company also offered a “VIPPP” program providing personalized services for loan applicants. Allegedly, Reis and Hockridge recruited individuals to work as referral agents and coach borrowers on submitting false applications.
The charges against Reis and Hockridge include one count of conspiracy to commit wire fraud and four counts of wire fraud. If convicted, they face up to 20 years in prison per count.
Principal Deputy Assistant Attorney General Nicole M. Argentieri announced the charges alongside U.S. Attorney Leigha Simonton for the Northern District of Texas; FBI Assistant Director Chad Yarbrough; IRS Criminal Investigation Special Agent Chris Altemus; SIGPR Brian Miller; FRB-OIG Special Agent John Ellwanger; and SBA-OIG Inspector General Hannibal “Mike” Ware.
The investigation was conducted by the FBI, IRS-CI, SIGPR, FRB-OIG, and SBA-OIG. Acting Assistant Chief Philip Trout from the Criminal Division’s Fraud Section is prosecuting alongside Trial Attorneys Elizabeth Carr and Ryan McLaren from MLARS, as well as Assistant U.S. Attorney Matthew Weybrecht.
MLARS's Bank Integrity Unit focuses on investigating financial institutions whose actions threaten system integrity. Since CARES Act enactment, over 200 defendants have been prosecuted related to PPP fraud with more than $78 million seized.
In May 2021, a COVID-19 Fraud Enforcement Task Force was established by the Attorney General to enhance efforts against pandemic-related fraud across government agencies.
Information about attempted COVID-19 fraud can be reported via the Justice Department’s National Center for Disaster Fraud Hotline or online complaint form.
All defendants are presumed innocent until proven guilty beyond a reasonable doubt in court.