FORT WORTH — The co-founder of an Arizona-based company that assisted hundreds of thousands of applicants for pandemic-era payroll loans pleaded guilty Monday in connection with what the government called a $300 million fraud.
Nathan Reis entered his guilty plea to conspiracy to commit wire fraud on the day his trial was scheduled to begin before U.S. District Judge Reed O’Connor.
In June, Reis’s wife, former Phoenix TV news anchor Stephanie Hockridge, was convicted of conspiracy by a jury in Judge O’Connor’s court. Her sentencing is scheduled for Oct. 10. After accepting Reis’s guilty plea, Judge O’Connor tentatively scheduled his sentencing for Nov. 21.
Both are free pending sentencing.
Hockridge and Reis were indicted in November 2024. The indictment claimed that the couple, with others, submitted what they knew were phony applications for forgivable, federally backed loans under the federal Paycheck Protection Program, established by Congress in March 2020 to help struggling businesses stay afloat during the COVID-19 pandemic. The indictment said Reis and Hockridge “fabricated documents, including payroll records, tax documentation, and bank statements” to make fraudulent loan applications appear legitimate.
In exchange for Blueacorn’s illegal services, the indictment said, the company received kickbacks from borrower-clients, as well as a percentage fee from the private lenders making the loans under the auspices of the U.S. Small Business Administration.
A superseding indictment issued this May lists more than $131,000 in loans that Hockridge and Reis are alleged to have fraudulently obtained for themselves and more than $486,000 in loans they are alleged to have helped others obtain.
Those figures, however, represent only a fraction of what the government contends the couple stole. According to a December 2022 report by the U.S. House Select Subcommittee on the Coronavirus Crisis, Blueacorn took in nearly $300 million in profits while spending “less than one percent of the fees it received for its PPP work … on its fraud prevention program.”
In 2021 alone, the report said, Blueacorn received more than $1 billion from lenders for its PPP services. That year, the company processed and submitted more than 739,000 PPP loan applications, the report said.
In closing arguments in Hockridge’s trial, her lawyer, Richard Finneran of Bryan Cave in St. Louis, sought to blame Reis for the loan scam. Finneran accused Reis and his associates of “gaslighting” Hockridge into believing the loan applications Blueacorn processed for themselves and others were sincere and lawful attempts by businesses to seek relief during the nationwide economic shutdown brought on by the pandemic.
“She is not responsible for the deeds of her husband,” the defense lawyer told jurors.
In the government’s closing argument, Philip Trout, a Department of Justice attorney from Washington, D.C., said Hockridge and Reis were in cahoots from the beginning and that she knew what they were doing was illegal.
“None of this fraud could have taken place without Stephanie Hockridge,” he said.
Jurors found her guilty of one count of conspiracy on their first day of deliberation.
In addition to Finneran, Hockridge was represented at trial by Gregg Gallian of Dallas.
At Monday’s hearing, Reis was represented by Kevin Chambers of Latham & Watkins in Washington, D.C., and Michael P. Heiskell of Johnson, Vaughn & Heiskell of Fort Worth.
Matthew Weybrecht of the U.S. attorney’s office in Fort Worth represented the government.
The case is 4:24-CR-287-O.