FORT WORTH, TX — Day two of Stephanie Hockridge's fraud trial took an unexpected emotional turn as the former ABC15 newscaster sobbed and briefly left the courtroom after an FBI agent recounted the arrest of her husband.
Also Friday, the lead FBI agent in the Blueacorn Paycheck Protection Program investigation testified about altered financial documents used to obtain forgivable business loans for Hockridge's clients.
Hockridge, who worked as an ABC15 news anchor from 2011 to 2018, and her husband, Nate Reis, along with others, started Blueacorn, a financial tech company, in Scottsdale in 2020.
Prosecutors said the couple and their co-conspirators submitted fraudulent Paycheck Protection Program applications to obtain forgivable COVID-19 relief loans for businesses and individuals.
FBI Agent Collin Friedmann testified about files on Hockridge's computer, including two 1099 tax forms - one original and one altered version - for an independent contractor seeking a loan through Blueacorn. The original showed the man earned about $57,000. The second form showed he earned about $157,000.
The higher income amount would increase the PPP loan amount to be paid out to that borrower.
As evidence of a conspiracy to commit wire fraud, Agent Friedmann also testified about Hockridge's emails, texts, and other electronic messages.
In one message, Hockridge blamed her husband's poor Photoshop skills for a loan application rejection. The lending institution had noted that the borrower's tax document seemed altered, according to documents presented in court.
In messages to her dad, Hockridge coached him on how to apply for three PPP loans, and she told him, "come up with a side job you did for extra cash." Hockridge thought her parents would receive $60,000 in free money, according to Friedmann.
Later texts indicated the idea wasn't doable based on documentation requirements. Federal government data show Hockridge's dad received a $41,582 loan from the PPP program.
Hockridge's defense attorney questioned the FBI agent about why he didn't interview certain borrowers or review more banking and tax records to rule out other explanations for PPP loan amounts.
During opening statements Thursday morning, federal prosecutors said Stephanie Hockridge and co-conspirators "lied to get money."
"This is a case of greed pure and simple," said Jason Lamm, a Valley defense attorney who's worked on federal white collar crime cases. He's not been involved in the Blueacorn case.
According to Blueacorn, the company facilitated the applications for $12 billion in Paycheck Protection Program loans. Hockridge and Reis reportedly walked away with $300 million.
Hockridge's defense team argued that the government's case focuses on a small portion of loans, about 20 borrowers out of hundreds of thousands. During opening statements, her attorney Richard Finneran said it was the borrowers who had to certify they provided correct information to qualify for the loans, and he said other people involved in the loan process had responsibility for fraud detection.
The couple had relocated to Puerto Rico, and last November, they were indicted on one count of conspiracy to commit wire fraud and four counts of wire fraud. Both pleaded not guilty. They are being tried separately. Hockridge went to trial first.
"It's going to be really lean and mean trial," Lamm said. "There will be a few federal agents who discuss the evidence and how they pursued the investigation, and perhaps, most significantly, there will be several cooperating witnesses."
Prosecution witnesses include another Blueacorn founder, James Flores. While testifying Thursday afternoon, he was asked about whether he had direct knowledge that Hockridge processed fraudulent loans under Blueacorn's 'VIPPP' program.
"We were all partners in the business," and "we all knew," Flores said.
Two brothers from Sedona are also scheduled to testify. Anthony and Eric Karnezis have already pleaded guilty to the charges against them. They were accused of working in conjunction with Blueacorn to process more than $100 million in fraudulent PPP loans.
In court filings Wednesday, Hockridge's attorneys said she took steps to detect and discourage suspicious applications. The defense attorneys also said Hockridge acted "in good faith," working to help borrowers she believed were eligible to secure the maximum loan amounts permitted.
Editor's note: A previous version of this story misstated court testimony indicating Stephanie Hockridge's parents ultimately received $60,000 from the Paycheck Protection Program. It has since been updated to reflect that they received a lesser amount.
