Founder of Lender Service Provider Pleads Guilty for Role in PPP Fraud Scheme

A founder of the lender service provider Blueacorn pleaded guilty today in connection with a scheme to fraudulently obtain COVID-19 relief money guaranteed by the U.S. Small Business Administration (SBA) through the Paycheck Protection Program (PPP).

“The FBI takes our responsibility to investigate and pursue those who commit fraud for personal gain very seriously,” said Assistant Director Jose A. Perez of the FBI Criminal Investigative Division. “Reis and others exploited a program meant to keep small businesses afloat during the pandemic. The FBI will continue to work tirelessly to prevent these programs from becoming targets and fight fraud wherever we find it.”

According to court documents, Nathan Reis, 47, of Rio Grande, Puerto Rico, and previously of Arizona, conspired with others to submit false and fraudulent PPP loan applications, including by fabricating documents that falsified income and payroll figures in order to receive loan funds for which they were not eligible.

Reis co-founded Blueacorn in April 2020, purportedly to help small businesses and individuals obtain PPP loans. Through Blueacorn, Reis and his co-conspirators submitted fraudulent PPP loan applications they knew contained materially false information to make more money. Reis and others fabricated documents, including tax documents and bank statements. As part of the conspiracy, Reis and his co-conspirators charged borrower’s fees based on a percentage of the funds received.

Reis pleaded guilty to conspiracy to commit wire fraud. He is scheduled to be sentenced on Nov. 21 and faces a maximum penalty of 20 years in prison.  A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI, IRS-CI, the Special Inspector General for Pandemic Recovery, Federal Reserve Board-CFPB Office of Inspector General, and SBA OIG investigated the case.