PPP Fraudster Sentenced to 10 Years for $63 Million Scheme

A significant case has emerged from the U.S. Small Business Administration (SBA) stemming from fraudulent activities that exploited pandemic relief measures, particularly the Paycheck Protection Program (PPP). On November 21, 2025, Stephanie Hockridge, co-founder of a lender service provider named Blueacorn, was sentenced to 10 years in federal prison for her role in a scheme that defrauded the program of over $63 million. This incident serves as a stark reminder for small business owners navigating federal assistance programs.

The PPP, part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, was designed to provide emergency funds to help small businesses retain employees and manage operational expenses during the economic downturn caused by COVID-19. Hockridge’s actions stand in stark contrast to the intent of the program. Evidence presented during the trial revealed that Hockridge fabricated various documents, including payroll records and bank statements, to secure improper loans for herself and her co-conspirators.

U.S. Attorney Ryan Raybould summarized the seriousness of the crime, stating, “These defendants exploited a national crisis to enrich themselves in this multimillion-dollar, taxpayer-funded fraud scheme.” He emphasized the commitment of law enforcement to pursue those who undermine essential federal relief efforts.

For small business owners who relied on the PPP during the pandemic, this case raises several critical points. Firstly, it underscores the importance of transparency and accuracy when applying for government loans. Small business owners are encouraged to understand the requirements thoroughly and to submit honest, verifiable information when applying for financial relief programs.

The scheme involved deceptive practices through a service called “VIPPP” which was designed to assist borrowers in navigating the PPP application process. Unfortunately, this personalized service misguided borrowers, leading them to submit false applications knowingly. Such practices highlight the risk associated with using third-party services without due diligence. Business owners must exercise caution when opting for assistance from lenders or service providers to ensure they are acting within legal bounds.

FBI Special Agent in Charge R. Joseph Rothrock noted, “The defendant used deceptive practices to exploit a government program for her own personal gain.” As small business owners recall their experiences with PPP, awareness of fraudulent behavior is crucial. Protecting your business from similar scams not only involves ensuring your loan application is legitimate but also includes vigilance against predatory behaviors that may arise in times of crisis.

The broader implications of Hockridge’s sentencing extend beyond individual culpability; they reflect ongoing efforts by law enforcement to combat fraud related to COVID-19 relief. The Fraud Section of the Department of Justice has prosecuted over 200 defendants in more than 130 cases since the enactment of the CARES Act, recovering over $78 million in fraudulently obtained funds. Small businesses would do well to note that government entities are actively monitoring compliance and pursuing those who engage in deceptive practices.

Although informal resources and new networks may spring up in times of need, the consequences of engaging in fraudulent behaviors are monumental. Hockridge is not only facing a lengthy prison sentence but is also required to pay $63 million in restitution. This case serves as a critical lesson regarding the gravity of ethical conduct in business practices.

Small business owners should also be informed that if they suspect fraudulent activities or have encountered potential scams related to COVID-19 relief, they can report it to the Justice Department’s National Center for Disaster Fraud. Ensuring a sound understanding of application procedures can mitigate risks and safeguard their business’s integrity.

As the economy continues to stabilize, small business owners must focus on rebuilding and growing their operations with integrity. The dedication to honesty can create lasting value not only for their businesses but also for the communities they support. For those interested in more details, you can read the original press release from the SBA here.

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This article, "PPP Fraudster Sentenced to 10 Years for $63 Million Scheme" was first published on Small Business Trends