In a statement, Abbe Lowell, an attorney for the Spencers, said, “The Subcommittee’s report is just the latest example of a congressional committee having a conclusion first and then manipulating the facts and evidence to support what it decided before it even looked for the truth. And it will be life changing money for anyone who does it.” And, she added, according to the committee, “while not everything - it’s a f- lot.” “We are doing this for the people we hired to make money,” she wrote. The report cited a text message in which Kristen Spencer described the anticipated windfall from processing PPP loans. The committee report quotes a former Elev8 worker who said the Spencers hired "at least 30" of their "closest friends and family" members to review loans, including a teenager who had just graduated from high school.
#CANCEL BLUE ACORN APPLICATION SERIES#
Rather, Blueacorn employed a series of fraud prevention practices and technologies throughout its entire adaptive application process that could for various reasons prevent an application from being submitted, could lead to its denial after it was submitted, and, indeed, could even lead to a late stage denial by the lender due to irregularities discovered after the Small Business Administration ('SBA') had already approved the loan.”
The Reises did not immediately respond to a request for comment. But in the materials released by the committee, a lawyer for Blueacorn rejected the idea that the company was lax on fraud controls: “Blueacorn did not simply accept completed applications from any applicant for its partner lenders to approve or deny. House Select Subcommittee on the Coronavirus Crisis “On top of the windfall obtained by enabling others to engage in PPP fraud, some of these individuals may have augmented their ill-gotten gains by engaging in PPP fraud themselves.” The committee sent a letter to the Justice Department Thursday saying "fintech owners tasked with identifying fraudulent PPP applications may have committed fraud themselves." The letter does not name or allege fraud by any specific companies or executives. Jim Clyburn, D-S.C., the subcommittee's chairman. “Even as these companies failed in their administration of the program, they nonetheless accrued massive profits from program administration fees, much of which was pocketed by the companies’ owners and executives,” said Rep. The new House report bolsters the argument, saying the companies did little to stop the fleecing. Previous analyses have pointed to the role of fintechs in the fraud, such as a 2021 report from the University of Texas that concluded, “suspicious lending by fintechs in 2021 is four times the level at the start of the program.” Fintechs are tech companies that enable or support banking services. It’s well known that the $800 billion PPP program was plagued by fraud, with some fraud estimates as high as $80 billion.ĭOJ officials have said that PPP prosecutions are an ongoing focus and that some who received loans for as little as $25,000 have been charged with wire fraud.īut now scrutiny has started to shift to some of the larger actors who facilitated the historic funding distribution in the early days of the pandemic when the federal government favored speed over diligence, according to multiple government watchdog reports. House Select Subcommittee on the Coronavirus Crisis $80 billion in fraud
The report says Reis is not Black or a veteran.
The committee flagged that one loan application signed by Nathan Reis in February 2021 shows he identified himself as a Black veteran independent contractor.
In addition to receiving millions as co-owners, Blueacorn’s Nathan Reis and his wife, Stephanie Hockridge-Reis, applied for and received nearly $300,000 in PPP loans for themselves and their own small businesses, according to the report. At the same time, even though the program was meant to help small businesses survive the pandemic, the report says smaller loan applicants were disdained by Blueacorn, with staff writing, “delete them,” “Who f- cares” and, “we’re not the first bank to decline borrowers who deserve to be funded.
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