Faster is Not Better

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Two and half years ago the Federal Government passed the Cares Act, the largest emergency spending in U.S. history. It was intended to save the American people from financial burden due to the Covid-19 Pandemic. While it may have spared the U.S. economy from ruin, it also invited unprecedented levels of fraud. Stories and court cases have been rolling out for months now about nefarious criminals applying for benefits, receiving about $100 billion in fraudulent payments.  But apparently, it isn’t just the applicants who have abused COVID-19 relief programs.

A 120 page report released on December 1, 2022, by the House Select Committee on the Coronavirus Crisis shows that there was rampant abuse by a set of financial companies who were issuing loans for the Paycheck Protection Program. One company in particular stands out for allegedly blatant manipulation of the process for its own financial gain.

BlueAcorn, a Scottsdale, Arizona based company, helped process more than $12 billion in PPP loans. The report states that BlueAcorn failed to screen out applicants that indicated signs of fraud while abusing the program to enrich its owners. “The faster the better” was what the workers were told when reviewing the applications.  And they were faster. BlueAcorn facilitated almost three times as many PPP loans in 2021 than J.P. Morgan Chase and Bank of America combined.

BlueAcorn owner, Stephanie Hockridge, reportedly told loan reviewers that they should not take more than 30 seconds per application.   And priority needed to be for the largest applications, giving them a special internal label named “VIPPP”.  Hockridge was allegedly reported to say “Closing these monster loans will get everyone paid.”  And paid they were.  BlueAcorn received more than one billion dollars’ worth of fees, with the owner of BlueAcorn receiving $120 million herself.

The best part of this all, is that both Hockridge and her husband Nate Reis both applied for their own PPP loans which came out to $300,000.  In one application Reis claimed to be African-American and a veteran.  Which he is not.

Excellent job by the House Select Committee on the Coronavirus Crisis. They have sent this report over to the Department of Justice to be reviewed with requests to prosecute.

Today’s Fraud of the Day is based on an article “Delete them. Who… cares’: Scottsdale company staff tells feds they were told to push fraudulent PPP loans” published by 12 News on December 2, 2022

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.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.