The Cautionary
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Greed-to-Grief, No. 29

Greed-to-Grief, No. 29

Steal from the government, it's easy

George Pillari
December 11, 2025

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The Paycheck Protection Program (PPP) was an $800+ billion emergency loan program created by the federal government in 2020 to help small businesses survive the COVID-19 pandemic.

The program offered loans to companies with fewer than 500 employees, designed to cover payroll costs and certain other expenses like rent and utilities.

PPP was a government-funded program to keep small businesses open during the COVID pandemic

The key feature was loan forgiveness: if businesses used at least 60% of the funds for payroll and maintained their employee headcount and salary levels, the entire loan would be forgiven, meaning the business did not have to pay anything back. (Pretty sweet!).

Loan amounts were calculated based on 2.5 times average monthly payroll costs. The federal government handing out free money, what could go wrong?

The program ultimately distributed over 11 million loans. While it helped many legitimate businesses stay afloat and retain employees during the lockdowns, the program became notorious for widespread fraud.

The rushed rollout with minimal verification requirements created opportunities for abuse. People created fake businesses, inflated payroll numbers, used funds for prohibited purchases like luxury cars and houses, and even applied multiple times under different entities. It was a bonanza for the bad guys.

Think about it for a minute: claim you are a small business, fill out some paperwork and get thousands, and in some cases, millions sent to you that you don’t have to pay back. Estimates indicate that up to 20% of all PPP activity was fraudulent.

Thousands of criminal cases have been prosecuted, including everything from small-time opportunists to organized fraud rings. The Department of Justice established special task forces to pursue PPP fraud cases, and prosecutions are expected to continue for years.

Stephanie Hockridge was locally prominent in the Phoenix area. She was a television news anchor for eight years leading up to COVID in 2020. Using her visibility, she orchestrated one of the most sophisticated PPP fraud schemes to emerge from the pandemic.

Stephanie Hockridge was a fixture on ABC news in Phoenix

Hockridge co-founded loan processor Blueacre with her husband, ostensibly to help small businesses and individuals obtain PPP loans during the pandemic's economic devastation. What appeared to be a legitimate financial technology company quickly became a vehicle for massive fraud.

Hockridge took more than $60 million in fees for herself by processing the bogus loans. “Holy out-and-out fraud,” said Robin to Batman.

The scheme operated through one of my favorite mechanisms: systematic document fabrication. Hockridge created fake payroll records, falsified tax documentation, and manufactured bank statements to inflate loan amounts for applicants.

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In one particularly revealing message, Hockridge blamed her husband's "poor Photoshop skills" when a lender rejected an application because the tax document appeared altered.

Central to the fraud was a premium service called "VIPPP" that offered personalized assistance with loan applications. Hockridge recruited co-conspirators to work as referral sources who coached borrowers on how to submit fraudulent applications.

The conspirators charged kickbacks based on a percentage of the loan amounts received, creating a direct financial incentive to maximize fraud.

To increase both borrower kickbacks and lender fees from the government, Hockridge knowingly submitted applications containing materially false information. Can you say bold?

Hockridge did not even attempt to cover her tracks and was easily convicted

Internal communications revealed the operation's true priorities. On the company’s internal messaging platform, Hockridge allegedly wrote about "closing these monster loans will get everyone paid,” emphasizing how much she would profit.

Conversely, for smaller loans, she reportedly instructed staff to "delete them, who f**king cares," adding that small businesses could "go elsewhere." She allegedly described the PPP as "$100 billion of free money."

At trial, prosecutors presented evidence including WhatsApp encrypted messages, text discussions about applications that "look like fraud," and photographs of lavish spending.

The defense argued that Hockridge acted in good faith and that the government's case focused on only about 20 borrowers out of hundreds of thousands. They contended it was borrowers who certified the accuracy of their information.

The judge and jury were not sympathetic and convicted Hockridge of conspiracy to commit wire fraud and she was sentenced to 10 years in prison and ordered to pay $60+ million of restitution.

She is in the same Texas prison as Theranos founder and fellow-fraudster Elizabeth Holmes and former Jeffrey Epstein accomplice Ghislaine Maxwell. Do I see the seeds of a reality show?

Key Takeaways

She was well-known and universally respected. She preyed on unsuspecting victims who trusted her. A story as old as time.
Never underestimate a person’s capacity for greed. Hockridge probably could have made an easy $10 or $20 million with her scheme and would not have been detected like many others who stole from the PPP.
Her flagrant disregard for secrecy and her willingness to document her crimes makes Hockridge either a naive scammer or a obnoxiously arrogant convict.

Things I think about

Top college football teams traveling to a bowl game include about 100 players and coaches. The band can be 300+.