A federal jury on Friday convicted Stephanie Hockridge, 42, a founder of the lender service provider Blueacorn, for her role in a scheme to fraudulently obtain tens of millions of dollars in COVID-19 relief money through the Paycheck Protection Program (PPP). Hockridge, also known as Stephanie Reis, of Rio Grande, Puerto Rico, and previously of Arizona, faces up to 20 years in prison when she is sentenced on October 10.
According to court documents and evidence presented at trial, Hockridge conspired with others to submit false and fraudulent PPP loan applications. This included fabricating documents to falsify income and payroll, allowing them to receive loan funds for which they were not eligible.
“This defendant exploited a national emergency to personally profit from a taxpayer-funded program intended to support vulnerable individuals and small businesses,” said Matthew R. Galeotti, Head of the Justice Department’s Criminal Division.
Acting U.S. Attorney Nancy E. Larson for the Northern District of Texas added, “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 to fraudulently enrich herself.”
Hockridge co-founded Blueacorn in April 2020, ostensibly to help small businesses and individuals secure PPP loans. As part of the scheme, Hockridge and her co-conspirators fabricated documents such as payroll records, tax documentation, and bank statements to secure larger loans for certain applicants. They also charged borrowers kickbacks based on a percentage of the funds received.
The scheme included a "VIPPP" service where Hockridge recruited co-conspirators as referral agents to coach borrowers on how to submit false PPP loan applications. To maximize kickbacks from borrowers and a higher percentage of lender fees from the SBA, Hockridge and her co-conspirators submitted PPP loan applications they knew contained materially false information. In total, Hockridge and her co-conspirators processed tens of millions of dollars in fraudulent PPP loans.
Hockridge was convicted of conspiracy to commit wire fraud and acquitted of four counts of wire fraud.
The case was investigated by the FBI, IRS Criminal Investigation (IRS-CI), the Special Inspector General for Pandemic Recovery, Federal Reserve Board-CFPB Office of Inspector General, and the SBA Office of Inspector General. Assistant U.S. Attorney Matthew Weybrecht for the Northern District of Texas, along with Acting Assistant Chief Philip Trout and Trial Attorneys Elizabeth Carr and Ryan McLaren from the Criminal Division, are prosecuting the case.
