A federal jury has convicted Stephanie Hockridge, founder of the lender service provider Blueacorn, for her involvement in a scheme to fraudulently acquire millions of dollars from the Paycheck Protection Program (PPP). The program was designed to provide COVID-19 relief funds and is backed by the U.S. Small Business Administration (SBA).
Court documents reveal that Hockridge, also known as Stephanie Reis, 42, conspired with others to submit false PPP loan applications. These applications included fabricated documents such as income and payroll records to obtain loans unlawfully.
Matthew R. Galeotti from the Justice Department’s Criminal Division stated, "This defendant exploited a national emergency to personally profit from a taxpayer-funded program intended to support vulnerable individuals and small businesses." He emphasized the department's commitment to holding accountable those who defraud the government.
Acting U.S. Attorney Nancy E. Larson for the Northern District of Texas commented on Hockridge's actions during a national crisis: “During a time of crisis in our country, this defendant abused the generosity of the American people by stealing money dedicated to the survival of small businesses."
The FBI's Assistant Director Jose A. Perez reiterated their dedication to protecting taxpayer-funded programs: "Hockridge’s conviction demonstrates the FBI's continued commitment to protecting taxpayer-funded programs from fraud and abuse."
Special Agent Jon Ellwanger highlighted Hockridge's misuse of pandemic relief funds for personal gain: “Ms. Hockridge defrauded the federal government of millions of dollars in pandemic relief funds for her own personal gain and has been brought to justice.”
Deputy Inspector General Sheldon Shoemaker stressed their resolve against such fraud: "Exploiting the Small Business Administration’s pandemic relief programs for personal gain is an egregious theft of taxpayer funds."
IRS Special Agent Christopher J. Altemus Jr. described this verdict as a victory for justice: "In a time of crisis, the Paycheck Protection Program was created as a lifeline... Ms. Hockridge saw it as an opportunity to enrich herself."
Evidence showed that Blueacorn was co-founded by Hockridge in April 2020 with claims of assisting small businesses with PPP loans. She and her associates allegedly falsified documents like payroll records and tax documentation while charging borrowers kickbacks.
They offered clients personalized services called “VIPPP” aimed at helping borrowers complete fraudulent loan applications. This strategy resulted in processing tens of millions in fraudulent loans.
Hockridge has been convicted on charges related to conspiracy but acquitted on other counts and now faces up to 20 years in prison with sentencing scheduled for October 10.
The case was investigated by multiple agencies including FBI, IRS-CI, Federal Reserve Board-CFPB Office of Inspector General, and SBA OIG.
Prosecutors include Acting Assistant Chief Philip Trout from Fraud Section along with Attorneys Elizabeth Carr and Ryan McLaren from Money Laundering Section among others involved in this extensive legal effort against CARES Act-related frauds.
Since its inception following CARES Act legislation enforcement efforts have led authorities into prosecuting over two hundred defendants across more than one hundred thirty criminal cases recovering substantial amounts both monetary or otherwise obtained through these schemes.
Further information about reporting potential COVID-19 related fraud can be found via Justice Department resources available online.