The Keys to the Kingdom — Blueacorn’s  Stephanie Hockridge SBA PPP Loan Fraud

October 10, 2025

Bob Coleman
Founder & Publisher, Coleman Report

The Keys to the Kingdom — Blueacorn’s Stephanie Hockridge SBA PPP Loan Fraud

On June 23, 2025, a federal jury convicted Stephanie Hockridge—co-founder of the fintech lender service provider Blueacorn—of conspiracy to commit wire fraud in connection with a multimillion-dollar PPP fraud scheme. 

She was acquitted on four counts of wire fraud.  Her sentencing scheduled for today has been postponed to November with both sites haggling over the amount of the fraud. 

Nathan Reis, who previously pleaded guilty, called his wife “the keys to the kingdom.”

When he brought new partners into the business, that’s what he said.
She knew how the PPP system worked — how to structure the numbers, how to push a loan through, and how to get the money.

The U.S. Attorney told the jury that Stephanie Hockridge wasn’t guessing her way through the Paycheck Protection Program.
She was exploiting it — with precision.

Here is what Elizabeth Carr said in her opening statement.

Building Blueacorn

In April 2020, at the start of the PPP rollout, Hockridge and Reis formed a fintech platform called Blueacorn.

On paper, Blueacorn helped small businesses apply for PPP loans.
In practice, prosecutors said, it became a pipeline for false applications.

“They used Blueacorn to funnel these PPP loan applications to lenders,” the attorney said,
“and they used Blueacorn to get people loans when they did not qualify, by forging documents and lying on applications.”

Blueacorn generated revenue through loan volume. The more loans it submitted, the more fees it collected — from both lenders and borrowers — “Over $1 billion

Manipulating the Payroll Formula

Hockridge mastered the PPP calculation: average monthly payroll × 2.5.
The bigger the payroll, the bigger the loan.

When borrowers didn’t qualify, she altered the data.

“She knew how to doctor an application to make it look like they qualified for the maximum loan amount.”

She created employees, raised wages, and produced new tax and payroll forms to make every application appear legitimate.

The $20,832 Pattern

For single-person businesses, she used a fixed number.

“A single-person business with $100,000 in income could qualify for $20,832.”

Hockridge repeated that amount across file after file.
Each borrower “earned” the same income, each loan approved for the same $20,832.

“You will see that number — $20,832 — over and over.”

It became her signature pattern inside Blueacorn’s submissions.

The $145,000 Sweet Spot

For larger applications, she built a second model.
The attorney told the jury:

“She and her husband understood that loans under $150,000 wouldn’t get audited.”

Hockridge used that knowledge to design fake companies with seven employees, each supposedly earning about $100,000.
That created a total payroll of $700,000 and justified a PPP loan of about $145,000 — just below the SBA’s audit threshold.

Every file followed the same layout:

• Seven employees.
  
• $100,000 each in wages.
  
• Forged 941s and W-3s.
  
• Fabricated payroll summaries.
  
• Bank statements adjusted to show deposits matching the false payroll.
  

“A loan they thought no one would care to check.”

The details were uniform because Hockridge standardized them.

The Document Factory

When borrowers lacked proof, Hockridge produced it.

“They would fake tax forms, falsify payroll reports, and forge bank statements to back up the lies.”

Tax forms were generated from templates.
Payroll reports were assembled in Excel.
Bank statements were digitally edited to align with the forged wages.

Each fraudulent company had its own name, EIN, and address — often taken from dormant entities — enough to survive lender verification.

The Money Trail

The attorney then laid out the financial structure of the fraud — how Blueacorn got paid.

1. Lender Origination Fees

“The bank or lender would pay an origination fee to Blueacorn.”

That was the legitimate revenue stream.
Under SBA rules, lenders paid agents or fintechs from their SBA-funded processing fees.

2. Borrower Payments — The Kickbacks

But Blueacorn didn’t stop there.

“Blueacorn charged borrowers an additional fee based upon the amount that the borrower would get from the origination loan.”

The government emphasized that this was not permitted:

“Was it your understanding that that was permitted by the SBA?”
“No.”

Borrowers paid willingly because, in the attorney’s words,

“An applicant would pay the kickback because that loan was money that they wouldn’t get otherwise.”

The flow looked like this:

• Borrower received PPP funds.
  
• Borrower sent 10–20 % back to Blueacorn or an intermediary.
  
• Blueacorn distributed portions of that kickback to referral agents.
  

Together, these mechanisms created a dual-compensation model:
SBA-funded lender fees on one side, borrower-funded kickbacks on the other.

$1 Billion is Not Enough

The attorney told the jury that Hockridge and Reis used the same playbook for themselves.

“They got fraudulent PPP loans for their own businesses, Body Politix and Juuice, also with made-up numbers and doctored documents.”

They applied as both lender agents and borrowers — falsifying payroll, certifying false eligibility, and collecting the funds.

Coaching the Network

The attorney said Hockridge personally trained her agents.

“She coached them on the art of these lies.”

She sent them sample files, showing exactly how fraudulent documents should look.

“She would send them a document and say, ‘make it look more like this.’”

She instructed them to input numbers that maximized loan amounts.

“She taught them how to put in the right numbers to maximize the loans, even when those numbers were lies.”

To ensure consistency, she created checklists, scripts, and templates so every application had the same professional appearance.

 The Attorney’s Close

The prosecutor ended simply:

“Ms. Hockridge and her co-conspirators got fraudulent PPP loans for themselves and others. They lied to get money. It’s really that simple.”

Nathan Reis called her “the keys to the kingdom.”

The government showed why:

She knew every lock in the system — and how to open each one.