Founders of Blueacorn Indicted for PPP Loan Fraud

The founders of Blueacorn, a company based in Scottsdale, Arizona, have been indicted on charges related to Paycheck Protection Program (PPP) loan fraud. The indictment, recently unsealed in Texas, accuses Nathan Reis and Stephanie Hockridge Reis of engaging in multiple counts of wire fraud and conspiracy to commit wire fraud.

According to federal prosecutors, Nathan Reis, aged 45, and his wife, Stephanie Hockridge Reis, aged 41, allegedly submitted fraudulent PPP loan applications during the COVID-19 pandemic. These loans were guaranteed by the U.S. Small Business Administration (SBA) through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The couple is accused of fabricating documents, including payroll and tax records, to secure loans for which they were not eligible.

The indictment details that the couple founded Blueacorn in April 2020 with the intention of facilitating PPP loans for small businesses. However, they allegedly expanded their operations by establishing lender service provider agreements with two lenders, whereby they collected and vetted loan applications. In return, Blueacorn received a portion of the fees paid by the SBA to the lenders.

Further allegations include that Reis and Hockridge solicited illegal kickbacks from borrowers, demanding a percentage of the funds obtained through the fraudulent applications. «This case exemplifies the flagrant abuses some have pursued in the midst of a national crisis,» stated a representative from the U.S. Department of Justice‘s Criminal Division.

Charges against the couple include one count of conspiracy to commit wire fraud and four counts of wire fraud, with each charge carrying a maximum penalty of 20 years in prison. The couple, previously residing in Puerto Rico, was arrested, with Nathan Reis apprehended this week. Stephanie Hockridge Reis is scheduled to appear in a Texas federal courtroom on Monday.

Before the indictment, Hockridge was known as a reporter and anchor for ABC15, a Phoenix television station, until 2018. Her involvement in the fraud is particularly highlighted due to her past prominent public profile. The indictments are part of a larger crackdown by federal authorities on fraudulent activity related to the COVID-19 relief efforts, which has seen over $78 million seized in similar cases.