Since the CARES Act was enacted in March 2020, 200 defendants in more than 130 criminal cases have been prosecuted and over $78 million in cash proceeds derived from fraudulently obtained PPP funds have been seized, in addition to several real estate properties and luxury items purchased with the 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 with claims to help small businesses and individuals obtain PPP loans.
According to court documents, Reis conspired with others to submit fraudulent PPP loan applications by falsifying payroll figures to receive loan funds they were not eligible for.
Through Blueacorn, Reis and others fabricated documents such as tax documents and bank statements and charged borrower’s fees based on a percentage of the funds received.
Reis pleaded guilty to conspiracy to commit wire fraud, is scheduled to be sentenced on 21 November and faces a maximum penalty of 20 years in prison.
Acting Assistant Attorney General Matthew R. Galeotti of the Justice Department’s Criminal Division says: "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 bring to justice those who would steal from the public fisc to enrich themselves."
Acting US Attorney for the Northern District of Texas Nancy E. Larson, adds: "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 line his own pockets with taxpayer money. We will continue to pursue convictions against those fraudsters who preyed upon the generosity of the American people as we struggled through the pandemic."
Assistant Director Jose A. Perez of the FBI Criminal Investigative Division, concludes: "The FBI takes our 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 becoming targets and fight fraud wherever we find it."