Dallas, TX – Two co-founders of the lender service provider Blueacorn have been charged in connection with a scheme to fraudulently obtain COVID-19 relief funds guaranteed by the U.S. Small Business Administration (SBA) through the Paycheck Protection Program (PPP). The indictment, unsealed yesterday in the Northern District of Texas, accuses the individuals of submitting false and misleading loan applications to illegally secure funds intended to help struggling small businesses during the pandemic.
Nathan Reis (45) and Stephanie Hockridge (41), AKA Stephanie Reis, both from Puerto Rico and formerly of Arizona, are facing serious federal charges. The couple allegedly used their business, Blueacorn, which they co-founded in April 2020, to submit fraudulent PPP loan applications on behalf of themselves and others. According to court documents, they fabricated essential documents, including payroll records, tax filings, and bank statements, to inflate their eligibility and obtain loan funds they were not entitled to under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The indictment outlines a scheme in which Reis and Hockridge, through Blueacorn, expanded their operations by entering into Lender Service Provider Agreements (LSPAs) with two lenders. These agreements allowed Blueacorn to collect, review, and submit PPP loan applications on behalf of borrowers. In exchange, Blueacorn received a percentage of the fees paid by the SBA to the lenders for each approved loan.
As part of the operation, the couple allegedly took further steps to manipulate the system for financial gain. They recruited co-conspirators to act as VIPPP referral agents. This program, which offered personalized assistance to borrowers seeking PPP loans, was used to coach applicants on how to submit fraudulent documents and information. Reis and Hockridge then charged borrowers illegal kickbacks—a percentage of the funds they received through the PPP loans.
By submitting applications filled with materially false information, including fabricated payroll and tax records, the pair was able to secure larger loans for some applicants. The indictment further alleges that Blueacorn submitted numerous fraudulent PPP loan applications, knowing they contained false information, in order to increase the volume of funds they received both from borrowers and from the SBA through lender fees.
Reis and Hockridge have been charged with one count of conspiracy to commit wire fraud and four counts of wire fraud. Each wire fraud charge carries a maximum sentence of 20 years in prison, highlighting the severity of the charges against them.
Blueacorn was positioned as a company that could help small businesses access financial relief during the early days of the pandemic. The business aimed to simplify the process of applying for PPP loans. However, authorities allege that Reis and Hockridge exploited their position to run a fraudulent operation that defrauded the SBA and exploited borrowers who were already in financial distress.
Reis and Hockridge are scheduled to appear in court at a later date, where a federal judge will determine their trial dates and any potential bail conditions.
