A federal indictment has been issued against former Phoenix ABC 15 news anchor Stephanie Hockridge and her husband, Nathan Reis, for allegedly orchestrating a massive COVID-19 relief fraud scheme through their startup company, BlueAcorn.
The couple faces one count of conspiracy to commit wire fraud and four counts of wire fraud, with each count carrying a potential 20-year prison sentence, reports AZFamily. The charges stem from their alleged manipulation of the Paycheck Protection Program (PPP), where prosecutors say they not only submitted fraudulent loans for themselves but also profited from helping others exploit the system.
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The scope of the alleged deception emerged during Congressional hearings in 2022. BlueAcorn’s partner lenders processed nearly triple the number of PPP loans in 2021 compared to banking giants J.P. Morgan Chase and Bank of America combined, despite having only one “direct employee” handling loan applications, per the outlet.
The investigation revealed disturbing practices at BlueAcorn, including instructions for loan reviewers to spend “less than 30 seconds” evaluating applications. According to internal messages obtained by investigators, Hockridge dismissed concerns about smaller loan applicants, writing to staff that they weren’t the first bank to decline deserving borrowers and telling them to seek funding elsewhere, according to Fox 10 Phoenix.
The couple allegedly engaged in various fraudulent activities, including attempting to charge applicants a 10% fee for successful loans, violating Small Business Administration rules. In one particularly brazen move, Reis allegedly falsified his own loan application by claiming to be African American and a veteran. The couple also allegedly requested direct payments from PPP borrowers, scamming them out of substantial portions of their loans, reports the outlet.
A Congressional report initially called for a federal investigation into BlueAcorn in late 2022, following Arizona’s Family investigative reporter Amy Cutler’s findings about the company’s questionable practices. The investigation revealed that loan reviewers received no training on loan underwriting, contributing to potentially billions in fraudulent approvals.
According to investigators, Hockridge described the PPP as “$100 billion dollars of free money” in company communications, per Fox 10 Phoenix. The couple allegedly used their fraudulent gains to establish a luxurious lifestyle in Puerto Rico, where Reis was ultimately taken into custody by federal authorities.
During the federal hearings, Inspector General Michael E. Horowitz highlighted the widespread abuse of the program, noting that 57,000 PPP applications came from individuals on the Do Not Pay list, involving billions in potentially fraudulent loans. Rep. Jim Clyburn highlighted how criminals exploited Americans’ financial hardship to commit extensive fraud.
“Criminals and criminal organizations took advantage of Americans suffering during this crisis and committed substantial fraud against these critical pandemic relief programs,” he said. Reis was arrested on Thursday, while Hockridge has been ordered to appear in federal court in Fort Worth, Texas, on Nov. 25.
