Since the CARES Act was enacted in March 2020, 200 defendants in over 130 criminal cases have been prosecuted, with more than $78 million in cash proceeds from fraudulently obtained PPP funds seized, along with several real estate properties and luxury items purchased with these proceeds.
Nathan Reis, 47, of Rio Grande, Puerto Rico, and co-founder of lending service provider Blueacorn, pleaded guilty last week in connection with a scheme to fraudulently obtain COVID-19 relief money guaranteed by the US Small Business Administration (SBA) through the Paycheck Protection Program (PPP).
Reis co-founded Blueacorn in April 2020, claiming to help small businesses and individuals secure PPP loans. According to court documents, he conspired with others to submit fraudulent PPP loan applications by falsifying payroll figures to receive ineligible loan funds.
Through Blueacorn, Reis and his co-conspirators fabricated documents, such as tax forms and bank statements, and charged borrowers fees based on a percentage of the funds obtained.
Reis has pleaded guilty to conspiracy to commit wire fraud and is scheduled for sentencing on November 21, facing a maximum penalty of 20 years in prison.
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division stated, “During a national emergency, this defendant exploited a taxpayer-funded program that individuals and small businesses desperately needed to survive. This conviction demonstrates the Department’s ongoing commitment to hold accountable those who steal from the public.”
Acting US Attorney for the Northern District of Texas Nancy E. Larson added, “This defendant had the opportunity to help small businesses overcome tremendous financial hardships during a time of national crisis but instead exploited the system to enrich himself. We will continue to pursue convictions against those who preyed upon the generosity of the American people during the pandemic.”
Assistant Director Jose A. Perez of the FBI Criminal Investigative Division concluded, “The FBI takes its responsibility to investigate and pursue those who commit fraud for personal gain very seriously. 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 being targeted and to fight fraud wherever it arises.”