Blueacorn Co-Founder Pleads Guilty in Multi-Million Dollar PPP Fraud

Courtroom doors swung open once more for the infamous Blueacorn saga, with Nathan Reis, co-founder of the PPP-facilitating lender service Blueacorn, reaching a plea agreement in his major federal case. His guilty plea brings a dramatic chapter closer to a conclusion following the conviction of his wife, Stephanie Hockridge, in late June.

Reis, aged 47 and residing in Puerto Rico after relocating from Arizona, admitted to conspiring to commit wire fraud, orchestrating fake Paycheck Protection Program (PPP) loan applications through Blueacorn. These applications falsely inflated payroll and revenue data using fabricated tax records and bank statements, a deceptive strategy aimed at securing funds for ineligible entities, all while collecting illicit fees. Reis’s plea sets the stage for sentencing on November 21, facing a maximum sentence of 20 years in prison. 

While Hockridge's conviction was based on jury findings, including her role in creating a "VIPPP" program that fast-tracked high-dollar applicants with minimal review, Reis’s plea signals a strategic move, likely aimed at negotiating a more favorable sentence from authorities. However, given the scale of this fraud and his wife being found guilty, I would think he gets sentenced to the higher end of the penalty range.

Their coordinated wrongdoing is but one piece in a broader DOJ crackdown on pandemic-era lending fraud. Just yesterday, we published an article about a business loan broker, Abraham Park, who was sentenced to 46 months in prison for a very similar scheme. This aligns with other convictions, such as those of an Illinois tax preparer who admitted to defrauding COVID relief programs, highlighting a pattern of professionals using their trusted roles to exploit taxpayer-funded safety nets.

“During a national emergency, this defendant exploited a taxpayer-funded program that individuals and small businesses desperately needed to survive,” said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. “This conviction demonstrates the Department’s ongoing commitment to bring to justice those who would steal from the public fisc to enrich themselves.”

The Blueacorn case remains one of the most high-profile constructions of pandemic relief manipulation, fueled by deliberate document falsification and a culture that prioritized speed and volume over integrity. For Reis, admission of guilt may soften the blow, but it also closes a chapter on a scheme that converted a relief lifeline into a personal profit center at the expense of honest small businesses.