Blueacorn Founder Admits to Stealing from Pandemic Relief

DALLAS, TX – Nathan Reis, 47, of Rio Grande, Puerto Rico, and formerly of Arizona, pleaded guilty today to conspiracy to commit wire fraud, admitting his central role in a scheme to siphon millions from the Paycheck Protection Program (PPP). Reis, co-founder of the lender service provider Blueacorn, knowingly submitted bogus loan applications, lining his pockets while legitimate businesses floundered during the height of the COVID-19 pandemic.

The Department of Justice is cracking down. “During a national emergency, this defendant exploited a taxpayer-funded program that individuals and small businesses desperately needed to survive,” stated Acting Assistant Attorney General Matthew R. Galeotti. “This conviction demonstrates the Department’s ongoing commitment to bring to justice those who would steal from the public fisc to enrich themselves.” Acting U.S. Attorney for the Northern District of Texas, Nancy E. Larson, echoed the sentiment, stating Reis “had the opportunity to help small businesses…but instead exploited the system to line his own pockets.”

Court documents reveal that Reis and his co-conspirators fabricated income and payroll figures, forging tax documents and bank statements to qualify for loan funds they were never entitled to receive. Blueacorn, ostensibly created in April 2020 to *assist* small businesses in accessing PPP loans, became a vehicle for fraud. The operation wasn’t simply about obtaining the funds; Reis and his associates also charged borrowers exorbitant fees – a percentage of the fraudulently obtained money – adding insult to injury.

The FBI, leading the investigation alongside the IRS-CI, the Special Inspector General for Pandemic Recovery, Federal Reserve Board-CFPB Office of Inspector General, and SBA OIG, exposed the scheme. “Reis and others exploited a program meant to keep small businesses afloat during the pandemic,” said Assistant Director Jose A. Perez of the FBI Criminal Investigative Division. “The FBI will continue to work tirelessly to prevent these programs from becoming targets and fight fraud wherever we find it.”

Reis now faces a maximum penalty of 20 years in federal prison. Sentencing is scheduled for November 21, with the final decision resting with a federal district court judge, who will consider U.S. Sentencing Guidelines and other relevant factors. This case is being prosecuted by Acting Assistant Chief Philip Trout and Trial Attorneys Elizabeth Carr and Ryan McLaren of the Criminal Division’s Money Laundering and Asset Recovery Section, along with Assistant U.S. Attorney Matthew Weybrecht for the Northern District of Texas.

The Justice Department’s Fraud Section has been aggressively pursuing PPP fraud cases since the CARES Act was enacted, having prosecuted over 200 defendants in more than 130 criminal cases. To date, they’ve seized over $78 million in cash and assets derived from these fraudulent schemes. Anyone with information regarding COVID-19 fraud is encouraged to report it to the Justice Department’s National Center for Disaster Fraud.