Blueacorn Founder Pleads Guilty in PPP Fraud Scheme

A shocking revelation emerged as Nathan Reis, the co-founder of lender service provider Blueacorn, pleaded guilty in a federal court for his role in a fraudulent scheme targeting the Paycheck Protection Program (PPP).

According to prosecutors, Reis, 47, of Rio Grande, Puerto Rico, and previously of Arizona, conspired with others to submit false PPP loan applications, fabricating documents to secure funds they were not entitled to. This brazen act exploited a program meant to aid small businesses during the COVID-19 crisis.

‘During a national emergency, this defendant exploited a taxpayer-funded program that individuals and small businesses desperately needed to survive,’ said Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division. ‘This conviction demonstrates the Department’s ongoing commitment to bring to justice those who would steal from the public fisc to enrich themselves.’

Reis, who co-founded Blueacorn in April 2020, is scheduled to be sentenced on November 21 and faces a maximum penalty of 20 years in prison. The case was investigated by the FBI, IRS-CI, the Special Inspector General for Pandemic Recovery, Federal Reserve Board-CFPB Office of Inspector General, and SBA OIG.

The Fraud Section leads the Criminal Division’s prosecution of fraud schemes that exploit the PPP. Since the enactment of the CARES Act, they have prosecuted over 200 defendants in more than 130 criminal cases and seized over $78 million in cash proceeds from such frauds.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Justice Department’s National Center for Disaster Fraud (N…)

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