Justice Department Secures 10-Year Sentence in $63 Million PPP Fraud Case
WASHINGTON – A former co-founder of a loan application assistance company has been sentenced to ten years in federal prison for her role in a scheme to fraudulently obtain over $63 million in Paycheck Protection Program (PPP) loans. Stephanie Hockridge, 42, of Rio Grande, Puerto Rico, was also ordered to pay $63 million in restitution.
Hockridge co-founded Blueacorn in April 2020, a service marketed to help small businesses access PPP loans offered through the Coronavirus Aid, Relief, adn Economic Security (CARES) Act. However, evidence presented at trial revealed a systematic effort to inflate loan applications. Hockridge and her associates fabricated crucial documentation – including payroll records, tax filings, and bank statements – to secure larger loan amounts for applicants.They further profited by charging borrowers kickbacks tied to the funds they received.
the scheme involved a “VIPPP” service, offering personalized assistance with PPP applications. Hockridge recruited agents to coach borrowers on submitting deliberately false information. This allowed the conspirators to collect both increased kickbacks from borrowers and higher fees from the U.S. Small Business Administration (SBA). Over $63 million in fraudulent loans were processed consequently of these actions.
A jury convicted Hockridge on June 20th of one count of conspiracy to commit wire fraud.
The investigation was a collaborative effort led by IRS Criminal Investigation (IRS-CI), the Special Inspector General for Pandemic Recovery, the Federal Reserve Board-CFPB Office of Inspector General, and the SBA Office of Inspector General.The prosecution was handled by the Justice Department’s Criminal Division, specifically the Fraud Section and the Money laundering, Narcotics and Forfeiture Section, alongside the U.S. Attorney’s Office for the Northern District of Texas.
This case is part of a broader Justice Department initiative to combat PPP fraud.To date, the Fraud Section has prosecuted over 200 defendants in more than 130 criminal cases, recovering over $78 million in fraudulently obtained funds, along with assets purchased with those funds.
The Justice Department encourages anyone with information regarding COVID-19 related fraud to submit a complaint through the National Center for Disaster Fraud (NCDF) Hotline or via the NCDF Web Complaint Form: http://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
