Nathan Reis, 47, of Rio Grande, Puerto Rico, and formerly of Arizona, pleaded guilty today to conspiracy to commit wire fraud in connection with a scheme to fraudulently obtain Paycheck Protection Program (PPP) loans backed by the U.S. Small Business Administration.
According to court documents, Reis co-founded lender service provider Blueacorn in April 2020, allegedly to help small businesses secure PPP loans during the pandemic. Instead, Reis and his co-conspirators fabricated documents — including falsified tax returns and bank statements — to submit ineligible loan applications. They charged borrowers’ fees based on a percentage of the funds received.
The fraudulent applications contained false income and payroll figures, allowing the conspirators to secure funds that were not warranted. The PPP was part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, designed to help small businesses stay afloat during the COVID-19 crisis.
Reis is scheduled to be sentenced on Nov. 21 and faces up to 20 years in federal prison. A federal district court judge will determine his sentence based on statutory factors and U.S. Sentencing Guidelines.
The FBI, IRS Criminal Investigation, Special Inspector General for Pandemic Recovery, Federal Reserve Board–CFPB Office of Inspector General, and SBA Office of Inspector General investigated the case.
The Justice Department’s Fraud Section has prosecuted over 200 defendants in PPP-related fraud cases since the CARES Act’s passage, recovering more than $78 million in cash and assets obtained through fraudulent loans.
Anyone with information on COVID-19 relief fraud can contact the National Center for Disaster Fraud at www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
