SCOTTSDALE, Ariz. — A scathing federal report claims a Valley start-up abused billions of dollars worth of federal money meant to help small businesses survive during the pandemic.
The report released Thursday by the Subcommittee on the Coronavirus Crisis found that Blueacorn, a Scottsdale-based company that facilitated Paycheck Protection Program loans, did so recklessly; approving potentially fraudulent applications and took hundreds of millions of dollars for its own benefit.
It lists several claims that have been turned over to the Department of Justice to be investigated. The company was co-founded by former news anchor Stephanie Hockridge and her husband Nate Reis in 2020.
12News reached out to Hockridge for comment but has not heard back.
In 2021, investigators say Blueacorn processed $12.5 billion worth of loans. Which according to the report, is more than JP Morgan and Bank of America combined. With that amount given out, Blueacorn received more than a billion dollars worth of fees. Investigators say $300 million went to ownership with more than $120 million going to Hockridge and her husband.
It goes on to report the company gave priority to high-dollar loans and told staff to ignore small mom-and-pop shop requests. The committee obtained messages posted by Hockridge to workers saying:
"Delete them. Who f**** cares? We're not the first bank to decline borrowers who deserve to be funded."
Staff also told investigators they weren't trained when it came to fraud detection and were told to push through potentially fraudulent loans as quickly as possible. Another message by Hockridge says, "closing these monster loans will get everyone paid."
Out of the 1.7 million loans reviewed, the committee found Blueacorn only had one person dedicated to processing the loans.
It then goes on to discuss how Hockridge and Reis applied for their own PPP loans which came out to $300,000. In one application Reis falsely claimed to be African-American and a veteran.
The report was sent over to the Department of Justice to be reviewed. The committee encouraging them to prosecute those involved.
This is a developing story. Stick with 12News for the latest updates.
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