HOUSTON, TX – A former television news anchor and her husband appeared in federal court in Texas on charges linked to a massive COVID-19 relief fraud scheme. Stephanie Hockridge and Nathan Reis are accused of fabricating documents and receiving illegal kickbacks in connection with the alleged misuse of funds intended for pandemic relief.
According to the Department of Justice, the couple is believed to have orchestrated a scheme that funneled approximately $300 million through their Scottsdale-based company, Blue Acorn. This company was ostensibly set up to distribute Paycheck Protection Program (PPP) loans to small businesses during the pandemic.
The federal indictment alleges that Hockridge and Reis manipulated the PPP loan system by submitting falsified documents to secure substantial federal loans for which they were not eligible. The indictment outlines several instances where the couple reportedly coached employees to submit fraudulent PPP applications. In one notable case, they allegedly secured $136,000 for a non-existent business.
Further accusations suggest that Hockridge and Reis charged illegal kickbacks to borrowers based on the amount of money received from these fraudulent loans. These charges have surfaced nearly two years after a federal report from a House select subcommittee on the Coronavirus crisis highlighted potential misconduct.
The 2021 report claimed Blue Acorn processed $12.5 billion in loans, earning over a billion dollars in fees, with $300 million in profits directed to its owners. It also suggested that Blue Acorn prioritized high-value loans over smaller businesses’ requests. The report included internal communications from Hockridge urging staff to dismiss smaller loan requests, reflecting a focus on larger, more profitable loans.
Hockridge and Reis have entered pleas of not guilty to charges of wire fraud and conspiracy to commit wire fraud. If convicted, they face up to 20 years in prison for each count.
The trial is expected to shed light on the broader implications of fraud within pandemic relief efforts and the oversight mechanisms in place to prevent such occurrences. As the legal proceedings unfold, they may reveal further insights into the vulnerabilities exploited within the PPP loan distribution system.