Exhibit Select Subcommittee Report — Marshall Prestamos (Dkt. 53.1)

Summary

Exhibit filed 12/14/22 as Document 53-1 in the Marshall v. Prestamos case, No. 5:21-cv-04337-JMG, U.S. District Court for the Eastern District of Pennsylvania, reproducing a staff report of the Select Subcommittee on the Coronavirus Crisis on the role of financial technology companies in PPP fraud. The report states that at least tens of billions of dollars in PPP funds were likely disbursed to ineligible or fraudulent applicants, often with fintech involvement. It says Womply and Blueacorn, which together facilitated nearly one in every three PPP loans funded in 2021, failed to implement systems capable of consistently detecting fraudulent applications, and that Kabbage missed clear signs of fraud while Bluevine adapted better. It also states Blueacorn received over $700 million in fees from Prestamos and over $385 million from Capital Plus. These are the report's findings.

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I. 
EXECUTIVE SUMMARY 
 
This staff report presents findings from an investigation conducted by the Select 
Subcommittee on the Coronavirus Crisis into the role of financial technology companies 
(fintechs) in facilitating a disproportionately high rate of fraudulent and otherwise ineligible 
loans through the Paycheck Protection Program (PPP).  The Select Subcommittee initiated this 
investigation following reports that fintechs participating in the PPP approved a high volume of 
fraudulent PPP loan applications.  While the PPP delivered vital relief to millions of eligible 
small businesses, at least tens of billions of dollars in PPP funds were likely disbursed to 
ineligible or fraudulent applicants, often with the involvement of fintechs, causing tremendous 
harm to taxpayers.  
 
The Select Subcommittee’s investigation found that fintechs were given extraordinary 
responsibility in administering the nation’s largest pandemic relief program—a responsibility 
that some of the fintechs that facilitated the highest volumes of loans were either unable or 
unwilling to fulfill.  Despite fintechs’ claims that their use of technology and innovation would 
allow them to better administer the PPP than traditional financial institutions, many of these 
companies appear to have failed to stop obvious and preventable fraud, leading to the needless 
loss of taxpayer dollars.  The Select Subcommittee’s investigation found that many fintechs, 
largely existing outside of the regulatory structure governing traditional financial institutions and 
with little to no oversight from lenders, took billions in fees from taxpayers while becoming easy 
targets for those who sought to defraud the PPP.   
 
The investigation found that two unvetted and unregulated fintechs that, together, 
facilitated nearly one in every three PPP loans funded in 2021—Womply and Blueacorn—failed 
to implement systems capable of consistently detecting and preventing fraudulent and otherwise 
ineligible PPP applications.  Their lending partners, who were tasked with supervising the 
activities of these fintechs, often did little to oversee the activities of the companies to which 
they delegated their responsibilities.   
 
The Select Subcommittee investigation found that established fintechs Kabbage and 
Bluevine also faced challenges in properly administering the program.  Internal Kabbage 
documents show that the fintech missed clear signs of fraud in a number of PPP applications, 
including loans given to fake farms.  Internal communications show that Kabbage’s staff 
expressed confusion and concern with the fintech’s fraud prevention processes.  After Kabbage’s 
acquisition by American Express in October 2020, PPP borrowers were left at the mercy of an 
underfunded and understaffed spin-off company that failed to properly service their loans and 
would later file for bankruptcy.   
 
Although initially observing high levels of fraud, Bluevine appears to have adapted to 
ongoing fraud threats better than Kabbage, Womply, and Blueacorn, likely due to its long-
established partnership with a traditional financial institution that pressed the fintech to make 
appropriate investments in fraud controls and to comply with Small Business Administration 
(SBA) standards.   
 
 
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Specifically, the Select Subcommittee’s investigation found: 
 
Fintechs and Lenders Observed Significant Fraud in the PPP, Which They Attributed to 
Program Mismanagement as They Sought to Evade Responsibility 
 
• Internal emails obtained by the Select Subcommittee show that PPP lenders and 
fintechs saw high rates of fraudulent PPP loans and that fraud associated with the 
PPP strained the financial crime resources of even the more established fintechs and 
lenders.  In a November 2020 internal email, PPP lender Celtic Bank noted that its 
participation in the PPP led to “an uptick in fraudulent and money laundering 
activities.”  A Celtic Bank financial crime manager wrote in a March 2021 email to 
Bluevine that “the surge in fraud associated with PPP has strained all of our 
resources.”   
 
• Fintechs and lenders blamed the Trump Administration’s mismanagement of the 
PPP for the high volume of fraud.  In a September 2020 email, Kabbage’s head of 
policy wrote:  “At the end of the day, it’s the SBA’s shitty rules that created fraud, 
not [Kabbage].”  In response to an August 2020 SBA email announcing a webinar on 
preventing PPP fraud, Celtic Bank’s president called the Trump Administration’s action 
“a bit late,” remarking that the “horse has been out of the barn for a while now” with 
respect to PPP fraud. 
 
• Fintechs and lenders sought to avoid taking responsibility for taxpayer money that 
was lost to fraud.  In an internal email obtained by the Select Subcommittee, the Chief 
Executive Officer (CEO) of Celtic Bank wrote that “the industry should push hard to 
make sure the SBA accepts the fraud risk.”   
 
Blueacorn Took Only Minimal Steps to Prevent Fraud in Its Facilitation of Billions of 
Dollars in PPP Loans, While Abusing the Program to Enrich Its Owners 
 
• Blueacorn received over $1 billion in taxpayer-funded processing fees but spent 
little on fraud prevention and eligibility verification.  Blueacorn received over $700 
million in fees from Prestamos and over $385 million in fees from Capital Plus for their 
underwriting and other PPP facilitation services.  Blueacorn gave nearly $300 million 
in profits to its ownership while only spending $8.6 million—less than one percent of 
the fees it received for its PPP work—on its fraud prevention program.  Blueacorn 
also gave approximately $666 million to a marketing firm controlled by members of its 
senior leadership—almost 50 times more than the $13.7 million the fintech spent on 
eligibility verification. 
 
• Despite promising to use “high-quality, proprietary lending software and fraud 
detection tools,” Blueacorn relied on off-the-shelf fraud screening software and 
manual human reviews largely managed by an inexperienced company, Elev8 
Advisors, run by a member of Blueacorn’s senior leadership.  For the 1.7 million 
loans reviewed, Blueacorn had only “one direct employee who assisted with 
processing PPP loan applications.”  To conduct these reviews, the fintech “almost 
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exclusively relied on third-party companies and contractors” to process PPP loan 
applications—including contractors hired by consultancy Elev8 Advisors.  According to 
a former employee, Elev8 Advisors “hired at least 30 of [the owner’s] closest friends and 
family to work as underwriters submitting PPP loans to the SBA through Blueacorn.”  In 
a text message obtained by the Select Subcommittee, Elev8 Advisor’s owner, Kristen 
Spencer, made her motivation clear: “We are doing this for the people we hired to 
make money.  Our friends and family.  That is where the money is going.  And it 
will be life changing money for anyone who does it.” 
 
• Blueacorn loan reviewers, who spoke to the Select Subcommittee on condition of 
anonymity, reported receiving poor training and of being pressured to “push 
through” PPP loans, even if the reviewers doubted the authenticity of the loan’s 
supporting documentation.  A former Blueacorn loan reviewer reported that the 
company’s reviewers were “submitting PPP loans to the SBA the first minute of the 
first day” of their employment despite having “no formal or informal training on loan 
underwriting, as well as no training on how to properly identify and report fake 
government identification such as a driver’s license.”  The reviewers were told “the 
faster the better” and that each loan application review “should take you less than 30 
seconds.” 
 
• Blueacorn gave priority and less scrutiny to high dollar loans and those loan 
applications identified as “VIPPP” by Blueacorn’s founder, and improperly 
charged some PPP applicants for loan processing services.  Blueacorn’s ownership 
directed reviewers to prioritize “monster loans [that] will get everyone paid” and 
created an exclusive category of PPP loans, called “VIPPP” loans.  Blueacorn’s 
ownership directed loan reviewers “to prioritize and submit large [“VIPPP”] loans 
without following protocols that [loan reviewers] had been trained to complete.”  While 
prioritizing “VIPPP” loans, Blueacorn’s owners were dismissive of other loans, writing 
“delete them,” “who fucking cares,” and “[w]e’re not the first bank to decline [PPP] 
borrowers who deserve to be funded … they go elsehwere [sic].”  In addition, 
according to their former business partners, Blueacorn founders Nathan Reis and 
Stephanie Hockridge attempted to directly charge some applicants a 10 percent fee for 
successfully procuring PPP loans—in violation of SBA rules.   
 
• Blueacorn’s founders arranged PPP loans for themselves through Blueacorn, some 
of which show signs of potential fraud.  In addition to likely taking over $120 million 
in taxpayer-funded PPP processing fees, Mr. Reis and Ms. Hockridge received nearly 
$300,000 in PPP loans, some of which were facilitated by their own company:  
Blueacorn.  A review of these loans—some of which Blueacorn lending partner Capital 
Plus later demanded be repaid—identified supporting documentation with suspicious 
elements.  In one application, Mr. Reis falsely claimed to be an African American and 
a veteran.  Other applications contain questionable information that merits further 
investigation.  The Select Subcommittee discovered that, after participating in the PPP 
and getting many of their PPP loans forgiven, Mr. Reis and Ms. Hockridge relocated to 
Puerto Rico, where they apparently founded another lender service consultancy.  
  
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• Elev8 Advisors—Blueacorn’s primary eligibility verification and compliance 
consultants—received PPP loans for themselves, their businesses, and their family 
members through Blueacorn’s lending partners.  Elev8 Advisors owners’ Adam 
Spencer and Kristen Spencer used Blueacorn to secure at least $200,000 in PPP loans for 
themselves, their companies, and family members.  Around the time that they applied for 
forgiveness for these loans, they also purchased—in cash—an $8 million mansion, and 
acquired multiple luxury cars.  A review of the Spencers’ loan applications revealed 
suspicious elements, including companies with suspiciously high profit margins and 
claims of income that appear unsupported by the documentation that they provided.  In 
one such case, Ms. Spencer received a PPP loan based on a claim that she was paid six 
figures for “interior architect” services at the office of her husband’s company, which 
seems unlikely since Ms. Spencer appears to have had no experience as an “interior 
architect” and her husband’s company offices are located at a WeWork shared office 
space.  Separately, according to a whistleblower, Mr. Spencer directed at least one family 
member—who also served as a Blueacorn PPP loan reviewer—to fraudulently apply for a 
PPP loan for an ineligible or non-existent business through Blueacorn.  
  
Womply’s PPP Fraud Screenings Failed to Prevent “Rampant Fraud”—and Were 
Accompanied by Questionable Business Practices—Despite Generating Over a Billion in 
Profits 
 
• Lenders paid Womply over $2 billion in processing fees for Womply’s “PPP Fast 
Lane” program to screen PPP loans for fraud and eligibility.  In the first round of the 
PPP, Womply provided referral services to lenders, receiving just $3 million from lenders 
for its services.  Womply later rebranded itself as a “technology service provider” that, 
according to its lending partners, was responsible for handling eligibility and fraud 
verification for over a million PPP loans through their “PPP Fast Lane” product, 
taking billions more in fees.  Harvest Small Business Finance—which received more than 
800,000 PPP loan applications from Womply—told the Select Subcommittee that 
“Womply assured Harvest that it would only refer to Harvest complete applications 
that Womply’s platform had confirmed were for eligible borrowers.”    
 
• Multiple Womply lending partners criticized Womply’s fraud prevention practices, 
describing its systems as “put together with duct tape and gum” and accusing 
Womply of allowing “rampant fraud” to infiltrate the PPP.  Womply’s PPP lending 
partners determined that the fintech often failed in its duty to detect PPP fraud and 
exclude otherwise ineligible applicants.  PPP lender DreamSpring warned Womply that it 
was referring PPP applications containing “obvious fraudulent information.”  
Lendistry, a fintech also involved in PPP lending, told Womply that it “noticed a 
meaningful increase in the number of third-party and other inquiries related to 
fraud” in connection with batches of applications associated with Womply.  Benworth, 
which issued $4.6 billion in PPP loans in 2021, warned Womply that “the services 
promised by Womply, have not only not been provided, but have also placed our 
company in a very bad predicament due to the high likelihood of fraud involved in 
many of the referred loans from your company.” 
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• Womply had a windfall 2021 net revenue of over $2 billion, largely thanks to 
taxpayer-funded PPP processing fees, and took over $5 million in PPP loans for 
itself, which the SBA later determined it was ineligible to receive.  In 2021, Womply 
secured a gross profit of $1.8 billion and gross profit margin of nearly 90 percent.  Yet, 
Womply received over $5 million in PPP loans from its largest partner, Harvest 
Small Business Finance, and asked forgiveness for these loans in 2021.  After reviewing 
Womply’s application for PPP loan forgiveness, the SBA determined that Womply was 
ineligible for the loans that Harvest approved for them—and required the fintech to 
repay them in full.  Both Womply’s CEO and its President also received PPP loans for 
themselves, despite earning over $400,000 in salary in 2021 and likely taking tens of 
millions in taxpayer-funded PPP processing fees as personal profits.   
 
• Womply CEO Toby Scammell—who was convicted of insider trading in 2014 and 
has been permanently barred from participating in the securities industry—led 
Womply’s fraud prevention efforts and instructed his company not to cooperate 
with federal PPP fraud investigators.  Womply not only failed to detect fraud on the 
front end, but also resisted helping investigators catch fraud on the back end as well.  
Despite telling its lending partners that Womply was working closely with the SBA and 
the SBA Office of Inspector General (OIG), Mr. Scammell resisted providing 
information to federal investigators conducting PPP fraud investigations.  The SBA OIG 
and Fountainhead, one of Womply’s lending partners, made multiple requests for 
information from Womply “so that the SBA can investigate potential fraudulent loan 
activity carried out by PPP borrowers.” Womply refused.  Ultimately, Fountainhead 
was forced to get “a temporary restraining order against [Womply], so they can’t 
destroy these [PPP loan] documents.” 
 
• Womply may have transferred the sensitive personal and financial data of hundreds 
of thousands of PPP borrowers to a new business.  In May 2022, Womply updated its 
privacy agreement to notify its customers—likely including PPP applicants—that the 
company claimed the right to transfer “over 2 [million] tax documents, over 1.5 
[million] bank accounts from applicants” to its new company, Solo Global, Inc.  
Womply refused to tell the Select Subcommittee whether it has transferred sensitive PPP 
applicant personal and financial data to this new company, how it is using sensitive PPP 
applicant data, and whether it is using this data to generate profits for their new company.    
   
Fintechs Such as Womply and Blueacorn Were the “Paths of Least Resistance” for 
Criminal Gangs and Fraudsters Looking for PPP Loans 
 
• Criminals specifically targeted Blueacorn, Womply, and other fintechs to commit 
PPP fraud.  Fraudsters discovered that Blueacorn and Womply were among the easiest 
companies to apply for fraudulent PPP loans due to the ease of securing a loan through 
either company.  Members of drug gangs in Florida that were involved in PPP fraud were 
recorded by police discussing Womply and Blueacorn.  One gang member asked 
another to “show me Blueacorn” while another described Womply as “the website 
that[’s] [] really hittin…’” and that “everybody in the hood” was using Womply.  
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Investigators believe the PPP loans obtained by these gang members were then used to 
finance their criminal enterprises, including the purchase of guns and drugs. 
 
Capital Plus, Harvest, and Other Fintech-Partnered Lenders Conducted Little Oversight 
Over Womply and Blueacorn’s Activities, Allowing Fraud to Infiltrate the PPP 
 
• In the course of the Select Subcommittee’s investigation, multiple PPP lenders 
admitted to having no formal program to monitor their fintech partners or to detect 
fraud in the PPP loans that they submitted.  Nearly every lender investigated by the 
Select Subcommittee admitted to delegating their fraud prevention and eligibility 
verification responsibilities to their fintech partners.  Yet, few lenders appear to have 
conducted close and proactive oversight of their fintech partners.  Multiple lenders 
described their oversight as being limited to “spot checks” conducted at random on 
a small percentage of fintech-referred application files.  In one case, lender Capital 
Plus approved dubious loans to Blueacorn’s founders but claimed not to have been aware 
that it issued these loans until months later.  Despite this lack of oversight, multiple for-
profit lenders—including Capital Plus and Harvest—reported windfall profits as a 
result of their participation in the program. 
 
Kabbage’s Activities in the PPP Illustrate the Lack of Sufficient Incentives in the PPP’s 
Structure for Fintechs to Implement Strong Fraud Prevention Controls or Appropriate 
Borrower Servicing  
 
• Kabbage, which facilitated over 310,000 PPP loans, implemented a system that 
confused and concerned employees and financial institutions.  Multiple employees 
expressed concern about Kabbage’s loan review process, with one employee informing 
her supervisor that she was “really uncomfortable with the review procedures” for 
loans and expressing her belief that “the level of fraud we’re reviewing is wildly 
underestimated.”  A bank working with Kabbage expressed “concern[] about the 
significant increase in the fraudulent transactions confirmed by Kabbage” during the 
first round of the PPP.   
 
• Kabbage approved loans with clear indicators of likely fraud, partly because the 
program imposed minimal risk on lenders who approved questionable applications.  
In one exchange, a Kabbage risk manager supervising fraud specialists told his team that 
“a fundamental difference” between the level of diligence applied in the PPP, as opposed 
to normal lending by Kabbage, was that “the risk here is not ours – it is SBA’s risk.” 
 
• As fraud surged in the program, Kabbage reduced its full-time fraud prevention 
staff.  Between May and June of 2020, during the height of the PPP, Kabbage reduced its 
risk and account review teams, which were primarily responsible for fraud reviews, by 
approximately half.  After American Express acquired the majority of Kabbage’s assets 
in October 2020, the PPP loan portfolio was transferred to a minimally-resourced spin-off 
entity.  That company continued to fund tens of thousands of loans while retaining only 
one full-time anti-fraud employee. 
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Bluevine Initially Faced Significant Fraud Rates, But Its Longstanding Partners 
Intervened to Improve Fraud Prevention Over the Course of the Program 
 
• Federally regulated bank partners successfully pushed Bluevine to improve its 
controls during the PPP, likely reducing fraud.  In contrast to the other fintechs and 
lenders examined by the Select Subcommittee, Bluevine’s lending partner Celtic Bank 
conducted continuous oversight of Bluevine’s anti-fraud controls and prompted Bluevine 
to introduce new software and manual review processes.  These changes were followed 
by a steep decline in fraud incidents.  
 
• However, overwhelmed by fraud despite improved controls, Bluevine faced 
difficulties in facilitating timely reporting of fraud to law enforcement.  Delays at 
Bluevine caused Celtic Bank to submit late Suspicious Activity Reports (SARs), in 
violation of applicable banking regulations and to the possible detriment of law 
enforcement efforts to address ongoing fraud.  These issues raise concerns about 
adequate and full reporting of PPP fraud by other third-party service providers—
especially those lacking experience in filing SARs—who were facing the same fraud 
threats but received less rigorous oversight from lending partners. 
 
The Track Record of the Most Prolific Fintechs Involved in the PPP Should Prompt 
Caution When Allowing Lightly Regulated and Unregulated Entities to Administer Federal 
Lending Programs  
 
• Fintechs—many of whom were newly-established or new to small business 
lending—were delegated many of the most important aspects of the PPP.  These 
fintechs largely operated without strong oversight and many had never previously been 
subject to anti-money laundering (AML) and Bank Secrecy Act (BSA) requirements.  
This allowed actors with little experience and overstated technological capabilities, such 
as Blueacorn and Womply, to facilitate millions of loans and allow large-scale fraud to 
occur.   
 
• Based on these findings, Congress and the SBA should consider carefully whether 
unregulated businesses such as fintechs, many of which are not subject to the same 
regulations as financial institutions, should be permitted to play a leading role in 
future federal lending programs.  The SBA and SBA OIG should continue to 
investigate fraud in the PPP to establish the extent of taxpayer losses and identify 
misconduct by PPP participants.  In addition to requiring stricter oversight during 
emergency programs, the experience of the PPP should inform the SBA’s ongoing 
activities.  Any expansion of SBA programs to unregulated lenders or agents must be 
accompanied by greater oversight by the agency. 
 
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II. 
BACKGROUND 
 
A. 
The Paycheck Protection Program Provided Support to Millions of Small 
Businesses Affected by the Pandemic 
 
The Coronavirus Preparedness and Response Supplemental Appropriations Act and the 
Coronavirus Aid, Relief, and Economic Security (CARES) Act, enacted into law on March 27, 
2020 amid severe economic dislocation caused by the coronavirus pandemic, provided more than 
$2 trillion in emergency funds.1  The CARES Act created the Paycheck Protection Program 
(PPP), which provided forgivable, uncollateralized, low-interest loans of up to $10 million to 
sole proprietors and businesses with fewer than 500 employees.2  
 
 By its conclusion in May 2021, the PPP provided nearly $800 billion dollars in 
forgivable loans to small businesses.3  The PPP cost taxpayers as much as the three rounds of 
Economic Impact Payments and approximately the same amount as the federal pandemic 
unemployment benefits programs.4  Only slightly smaller in scale than the entire American 
Recovery and Reinvestment Act of 2009,5 the PPP was the largest small business support 
program in American history.6   
 
B. 
The PPP Was Administered by Private Lenders as Part of the Small Business 
Administration’s Pre-Existing 7(a) Small Business Lending Program 
 
1. 
In Addition to the Existing 7(a) Lenders, the SBA Allowed New Entities to Take 
Crucial Roles in Administering the PPP  
 
The CARES Act created the PPP under the 7(a) program, the SBA’s most common loan 
program that provides financial help for small businesses with special requirements.7  All 
existing SBA-certified 7(a) lenders were given delegated authority to process PPP loans, and all 
federally insured depository institutions, federally insured credit unions, and non-bank and non-
insured depository institutions lenders were eligible to make PPP loans once approved and 
enrolled in the program by the SBA.8   
 
Immediately following the passage of the CARES Act, Trump Administration SBA 
Administrator Jovita Carranza emphasized the crucial role that private lenders would have in the 
PPP, describing it as an “unprecedented public-private partnership.”9  She stated that the Trump 
Administration’s “goal [was] to position lenders as the single point-of-contact for small 
businesses—the application, loan processing, and disbursement of funds will all be administered 
at the community level.”10  Accordingly, nearly 5,500 lenders ultimately participated in the 
PPP.11    
 
2. 
Lenders Were Responsible for Processing and Underwriting PPP Loans 
 
PPP lenders were responsible for processing and underwriting PPP loans.12  Given the 
unique emergency nature of the PPP, the underwriting requirements for PPP loans differed 
greatly from those of traditional 7(a) loan programs.  Normally, under SBA Standard Operating 
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Procedures (SOP) and regulations, lender underwriting and lending criteria are focused on a 
borrower’s creditworthiness and ability to repay the loan with earnings from their business.13   
 
In contrast, the PPP underwriting process did not include a check for creditworthiness, 
instead specifying a program-specific set of underwriting requirements.14  Under the rules of the 
PPP, lenders were required to underwrite PPP loans by (1) confirming receipt of borrower 
certifications; (2) confirming receipt of information demonstrating that a borrower had 
employees for whom the borrower paid salaries and payroll taxes on or around February 15, 
2020; (3) confirming the dollar amount of average monthly payroll costs; and (4) following 
applicable Bank Secrecy Act (BSA) requirements.15   
 
3. 
Lenders Frequently Used Third-Party Companies (Agents) to Process and Service 
PPP Loans 
 
PPP lenders turned to a variety of third parties, usually described as “agents” by the SBA, 
to conduct certain activities on their behalf.  Two types of agents were important to the execution 
of the PPP:  referral agents and lender service providers (LSPs).  A referral agent is a person or 
entity that identifies and refers an applicant to a lender or a lender to an applicant.16  An LSP, as 
defined by the SBA, is an entity “who carries out lender functions in originating, disbursing, 
servicing, or liquidating a specific SBA business loan or loan portfolio for compensation from 
the lender.”17  The SBA describes an LSP as including individuals or entities that “[p]erform any 
pre-qualification review based on SBA’s eligibility and credit criteria or the 7(a) Lender’s 
internal policies prior to submitting the Applicant’s information to the 7(a) Lender” or “[p]rovide 
to the 7(a) Lender an underwritten application, whether through the use of technology or 
otherwise.”18  According to the SBA OIG, LSPs are “deeply involved in all phases of the loan 
life cycle.”19 
 
As LSPs and other agents are delegated many lender functions, under SBA regulations, a 
lender “must be able to demonstrate that it exercises day-to-day responsibility for evaluating, 
processing, closing, disbursing, servicing, liquidating and litigating its SBA portfolio.”20  As 
participants in a 7(a) program, lenders, referral agents, and LSPs involved in the PPP were all 
subject to SBA rules governing their conduct, and the SBA could have, for good cause, 
suspended or revoked the privilege of any agent to participate in the PPP.21 
 
4. 
Lenders and Their Agents Received Tens of Billions in Processing Fees from the 
SBA  
 
As participants in the PPP, lenders—and, by extension, LSPs and other agents who were 
used by the lenders—were paid a “substantial processing fee from the SBA” so that they had 
“ample inducement…to participate in the PPP.”22  The structure and parameters of this 
compensation changed over the course of the program.   
 
Under the PPP, agent fees could only be paid by the lender out of a lender’s SBA 
processing fees, as agents were expressly prohibited by the SBA from collecting any fees from a 
PPP applicant.23  Under the PPP’s initial rules, lenders earned a five percent fee on loans of 
$350,000 or less, a three percent fee on loans of more than $350,000 and less than $2 million, 
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and a one percent fee on loans of $2 million and above.24  This fee structure proved extremely 
profitable for lenders.  According to an analysis by the Miami Herald and McClatchy, PPP-
participating banks received nearly $18.2 billion in fees in the 2020 rounds of the program.25   
 
On December 27, 2020, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and 
Venues Act made changes to the PPP.26  Pursuant to these changes, the SBA issued an updated 
procedural notice regarding PPP processing fees.27  While the fees for loans of more than 
$50,000 remained unchanged, the fee associated with loans of $50,000 or less changed from a 
flat fee of five percent of the loan amount to the lesser of 50 percent of the loan amount or 
$2,500—a significant increase in small-loan profitability.28  According to one analysis, under the 
first PPP processing fee structure, lenders of loans of $50,000 or less received approximately 
$3.14 billion in fees during the first round of PPP lending.29  Under the revised fee structure, first 
round lenders would have received nearly three times as much in SBA fees for approving the 
same type and number of loans.30   
 
C. 
Experts Warned the Trump Administration that the PPP Could Be Highly 
Vulnerable to Fraud 
 
1. 
The Trump Administration Did Not Heed Early SBA OIG Warnings That the 
PPP’s Structure Would Lead to Fraudulent and Otherwise Ineligible Applications 
 
While the CARES Act was being debated, congressional Democrats advocated for the 
inclusion of strong oversight and accountability provisions.  Congressional Republicans 
ultimately agreed to establish the Pandemic Response Accountability Committee (PRAC), 
comprised of Inspectors General across the federal government charged with overseeing funds 
disbursed by the entire bill; the Congressional Oversight Commission, four congressional 
leadership appointees charged with activities of the Treasury Department and Federal Reserve; 
and the Special Inspector General for Pandemic Recovery, a presidential appointee charged with 
overseeing the $500 billion fund for large businesses administered by the Treasury Department.31   
 
Given the significant discretion provided to Executive Branch officials, Democrats 
advocated for “multiple layers of strict oversight.”32  However, rather than adding oversight 
mechanisms, President Trump, despite being warned that the PPP could lead to “the biggest 
fraud in the history of our country,” fired the chair of the PRAC one week after his appointment 
while criticizing and limiting oversight of various CARES Act programs.33   
 
On the day that the SBA began issuing PPP loans, the SBA OIG warned that the 
program’s structure—specifically, requiring limited documentation from loan applicants—had 
resulted in inappropriate or unsupported loan approvals in past SBA programs.34  OIG urged the 
SBA to implement proper controls before disbursing funds, such as having clear requirements 
and timely communications with lending partners, establishing and monitoring performance 
measures, developing internal controls, and establishing a plan to prevent and detect improper 
payments.35  
 
In June 2020, Treasury Secretary Steve Mnuchin announced that he would not allow the 
names of PPP recipients to become public, after claiming for months that such data would be 
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disclosed.36  A week after that announcement, a letter submitted by various Inspectors General to 
Congress revealed that the Trump Administration had issued legal rulings curtailing independent 
oversight of CARES Act funding.  The Inspectors General wrote that Trump Administration 
attorneys determined that the Administration did not have to provide the PRAC with information 
regarding the beneficiaries of programs created by the CARES Act’s “Division A,” which 
included the PPP and another large SBA program, Economic Injury Disaster Loans (EIDL).  In 
response to public pressure, the Treasury Department and the SBA agreed to disclose details 
concerning small business loan recipients in June 2020.37  
 
Republican opposition to oversight continued throughout the program.  Congressional 
Republicans opposed the Small Business Transparency and Reporting for the Underbanked and 
Taxpayers at Home (TRUTH) Act, which would have required the SBA to disclose, explain, and 
justify disbursements of relief funds under the PPP.38  A Republican Congressman serving on the 
Congressional Oversight Commission called the bill “redundant” and stated that “this whole PPP 
program is already burdened with tremendous paperwork” requirements—notwithstanding the 
fact that the public could not obtain basic information such as which businesses were receiving 
PPP loans.39   
 
That same month, Senate Republicans opposed a unanimous consent vote on a bill to 
require daily and weekly public reporting on SBA lending programs, broken down by 
geography, demographics, and types of industry.  A Republican Senator—who later incorrectly 
claimed that the PPP fraud rate was 0.76 percent40—stated that such transparency requirements 
were not the “right approach” and dismissed fraud concerns, stating that the PPP “by far … has 
been the most successful part of the CARES Act.”41   
 
The SBA OIG would later determine that the SBA under the Trump Administration did 
not heed their early warnings.  In a report issued in May 2022, the SBA OIG summarized its 
findings by stating:  
 
SBA did not have an organizational structure with clearly defined roles, responsibilities, 
and processes to manage and handle potentially fraudulent PPP loans across the program.  
In addition, the agency did not establish a centralized entity to design, lead, and manage 
fraud risk.  This problem occurred because the agency did not establish a sufficient fraud 
risk framework at the start of and throughout PPP implementation.42   
 
2. 
The Government Accountability Office Repeatedly Warned That the Trump 
Administration’s Management of the PPP Left It Needlessly Vulnerable to Fraud 
 
In June 2020—just two months into the program—the Government Accountability Office 
(GAO) released a report warning of “a significant risk that some fraudulent or inflated 
applications were approved,” in part because of the program’s “limited safeguards.”43  GAO 
attributed the lack of safeguards to the SBA’s program management.44  While the CARES Act 
imposed good faith certification requirements on borrowers, the SBA had “streamline[d] the 
process” by “requir[ing] minimal loan underwriting from lenders.”45  GAO cautioned that these 
Trump Administration SBA decisions made the program “more susceptible to fraudulent 
applications.”46  GAO also observed that borrowers and lenders experienced ongoing “questions 
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and confusion” about the SBA’s and Treasury’s various iterations of rules and frequently asked 
questions.47 
 
In the same report, GAO expressed concern that the Trump Administration’s SBA had 
not developed concrete plans for “crucial” “ongoing oversight” of PPP applications to mitigate 
those risks.48  The SBA had failed to explain how it would review high value loans and provided 
no information on “any specific oversight plans for . . . loans of less than $2 million”—which 
made up the vast majority of the PPP loans issued, and would become the primary focus of 
fintechs.49  The report concluded that the SBA’s “limited safeguards and lack of timely and 
complete guidance and oversight planning have increased the likelihood that borrowers may 
misuse or improperly receive loan proceeds.”50 
 
Warnings regarding weaknesses in the program continued.  In September 2020, after 
conducting its own analysis of loan-level PPP data from the first round of the program, the Select 
Subcommittee recommended specific controls for loan forgiveness, improvements in audit plans 
for loans, and increased cooperation with oversight bodies.51  In November 2020, GAO 
recommended that the SBA expeditiously review and estimate improper PPP loans and error 
rates, due to “concerns about the possibility that improper payments, including those resulting 
from fraudulent activity, could be widespread.”52  In January 2021, GAO expressed concern that 
27 of its 31 previous recommendations concerning the Trump Administration’s pandemic 
response “remained unimplemented.”53  GAO’s report singled out the SBA, which—under the 
Trump Administration—had yet to implement recommendations concerning fraud controls and 
improper payment testing for the PPP, as “fall[ing] far short of transparency and accountability 
expectations” and “creat[ing] risk of considerable improper payments.”54   
 
In contrast, the SBA made progress on these issues under the Biden Administration’s 
leadership.  In July 2021, GAO reviewed the SBA again and determined that the agency had 
implemented compliance checks for applications submitted in 2021 and had plans to conduct a 
fraud risk assessment.  GAO noted, however, that the SBA needed to provide further guidance 
on loan forgiveness processes.55   
 
D. 
Multiple Indicators Pointed to Massive PPP Fraud 
 
1. 
The SBA OIG Reported an Unprecedented Increase in Hotline Complaints, and 
Banks Filed a Record Number of Suspicious Activity Reports 
 
SBA Inspector General Hannibal Ware reported a 10,000 percent increase in 
hotline complaints after the passage of the CARES Act—an indicator that the PPP had triggered 
a potentially large volume of fraud.56  He further described the SBA OIG as being “inundated 
with contacts to our investigative field offices across the nation from financial institutions across 
the nation.”57    
 
According to a Bloomberg report, banks filed an abnormally high number of reports of 
suspected business loan fraud in July 2020, shortly after the start of the PPP and other pandemic 
relief programs.58  According to their analysis, the number of SARs in June 2020 was more than 
triple the average monthly number and was the second-highest monthly number of SARs for 
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suspected business loan fraud in history.59  There were 1,044 SARs filed in July 2020, nearly 
seven times the average number of monthly reports of suspected business loan fraud and the 
highest monthly number of SARs for suspected business loan fraud since reporting requirements 
began.60 
 
2. 
The SBA Flagged Millions of PPP Loans for Further Review 
 
According to information obtained by the Project on Government Oversight (POGO), the 
SBA also determined that a large number of PPP loans had indicators of suspicious activity or 
potential fraud.61  POGO’s reporting found that internal SBA data showed that the agency 
flagged nearly 2.3 million PPP loans worth at least $189 billion—about a quarter of all PPP 
dollars disbursed—for further review between August 2020 and September 2021.62   
 
POGO’s analysis of SBA data also revealed that the agency issued 4.3 million flags—
each signifying concerns that a loan was potentially fraudulent, the recipient was possibly 
ineligible, or the loans in question merited closer examination for some other reason.  The SBA 
issued a flag on nearly 800,000 loans indicating that the recipient businesses did not exist prior to 
February 15, 2020, and therefore were not eligible to receive loans.  SBA also noted that nearly 
240,000 loan recipients had an “inactive business.”63   
 
Although a flagged PPP loan does not necessarily mean that the loan was fraudulent or 
the recipient ineligible, a large number of flags could be indicative of a large number of improper 
payments in the program.64 
 
3. 
Researchers Estimated That 1.4 Million PPP Loans—Totaling Over $64 Billion—
Had at Least One Indicator of Potential Fraud 
 
In August 2021, after the conclusion of the program, researchers at the McCombs School 
of Business at the University of Texas analyzed PPP loans for indicators of potential fraud by 
borrowers.  Using these indicators, the researchers estimated that more than 11 percent of PPP 
loans, totaling $64.2 billion—at least 1.41 million of the 11.5 million total loans analyzed—had 
at least one indicator of potential fraud.65  The researchers also found that fintech-facilitated or 
issued loans were over three times as likely to have at least one primary indicator of misreporting 
compared to traditional loans.  Of loans with a primary indicator of fraud, those that were 
fintech-facilitated were 6.5 times as likely to also have a secondary fraud indicator.66   
 
 
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4. 
U.S. Attorneys’ Offices Have Brought Over 1,000 Cases of PPP Fraud—Totaling 
Over $1.5 Billion in Alleged Actual Loss to Taxpayers 
 
The first federal fraud charges related to the PPP came just a month after the program 
began.67  Since then, law enforcement has used tips from the public, SARs, and other 
information to prosecute those who defrauded the PPP.  As of October 2022, the Fraud Section 
of the Criminal Division of the Department of Justice (DOJ) has charged approximately 235 
defendants in pandemic fraud related matters in 162 cases, with actual loss totals of 
approximately $336 million.68  U.S. Attorneys’ Offices have charged an additional 1,616 
defendants in 1,050 cases with a total of over $1.284 billion in alleged actual loss.69 
 
E. 
Fintechs Eagerly Stepped Forward to Participate in the PPP, Claiming That 
They Were More Capable of Quickly Issuing PPP Loans Than Government 
Agencies and Traditional Banks   
 
1. 
Unregulated or Lightly-Regulated Fintechs Increased Their Reach in the Years 
Before the Pandemic, and Expanded Further During the Crisis 
 
Fintechs are involved in a wide range of financial services, ranging from online or mobile 
checking accounts to mortgages, insurance, investing, payment processing, and 
cryptocurrencies.70  Due to the broad range of services that fintechs offer, there is no single 
licensing or regulatory agency that oversees all of these companies.71  Those fintechs that are 
licensed or supervised often interact with local, state, or federal regulators on a functional, or 
activity-based, basis.72  However, some fintechs, based on their activities, may face little or no 
regulatory oversight.73   
 
The fintech industry was growing steadily prior to the pandemic.74  In addition to the 
inherent convenience of online and mobile financial services, fintechs have held out the promise 
of technology-driven operational efficiencies that would decrease costs and facilitate the 
inclusion of underserved customers traditionally left out of the banking sector.75  In addition to 
attracting consumers, fintechs also partner with financial institutions as they increasingly 
delegate many of their functions to fintechs through complex partnerships.76  The demand for 
fintech services increased at an even higher rate during the coronavirus crisis.77 
 
2. 
Fintech Industry Groups Sought to Be Included in the Administration of 
Pandemic Relief Programs, Claiming to Be Better Positioned Than Traditional 
Financial Institutions 
 
Multiple fintech industry groups advocated for the inclusion of fintechs in the 
administration of pandemic relief programs.  Before the passage of the CARES Act, a fintech 
industry group submitted a letter to Congress asking that Treasury be directed to permit online 
non-bank lenders to disburse pandemic relief funds, alone and through partnerships with non-
fintech financial institutions.78  The industry group claimed that fintechs had the “payment 
processing data and other technologies” and “digital infrastructure to move money rapidly” to 
small businesses in need of relief.79   
 
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Another fintech industry group specifically advocated for the inclusion of fintechs in 
pandemic relief targeting small businesses, claiming that “government agencies are ill-equipped 
to handle the volume of small businesses that are going to need emergency financing and, even 
in the best of times, could not supply businesses with the funding they will need quickly 
enough.”80  Fintech industry groups promoted fintechs as a solution to these limitations, 
promising that “innovative financial technology companies [could] handle that [large] amount of 
data and underwriting quickly” as “both service providers that work on behalf of banks that 
already partner with SBA as well as non-bank lenders providing emergency credit with an SBA 
guarantee or as an emergency conduit for SBA originated credit.”81  The head of the fintech 
industry group claimed that, if allowed to help facilitate small business lending, they would 
“[underwrite] loans using algorithms at speed and scale.”82   
 
Lawmakers and regulators ultimately allowed fintechs to participate in the PPP as lenders 
and agents.  The first fintechs were approved to participate in the PPP in mid-April 2020, and 
soon others—including PayPal, Square, Intuit, Lendistry, MBE Capital Partners, LLC (MBE 
Capital), Bluevine, and Kabbage (along with Kabbage and Bluevine’s partners, Celtic Bank and 
Cross River Bank)—also became participants.83  In early 2021, following the change in the PPP 
fee structure, newer and less experienced fintechs, including Womply and Blueacorn, entered the 
program and took leading roles.84   
 
3. 
Once Included in the PPP, Fintechs Took a Leading Role in the Program 
 
Fintechs, acting as both lenders and LSPs, became prominent in the PPP.  By the end of 
2021, the vast majority of the largest PPP lenders, by both value and volume (nine out of ten), 
were fintechs or fintech-partnered lenders.85  Although the SBA states that fintechs (and other 
state regulated lenders) approved over 1.2 million PPP loans, totaling nearly $22 billion, in just 
12 months,86 this figure is likely a significant undercount, as it does not include the billions of 
dollars in PPP loans that were issued by lenders that partnered with fintechs to issue loans.87     
 
According to a fintech industry group, fintechs “served more than double the small 
businesses” as Community Development Financial Institutions (CDFIs).88  In a June 24, 2021, 
opinion article, the CEO of a fintech industry group claimed that 41 fintechs were “collectively 
the third largest facilitators of PPP based on the number of loans (18 percent) and loan dollars 
(eight percent) distributed by lender type.”89  He wrote:   “policymakers and the media have been 
disproportionately focused on a very small percentage of fraud that took place in the program.”90 
 
F. 
Analysis Indicated that Fintechs Likely Facilitated a Disproportionately 
High Number of Fraudulent and Otherwise Ineligible PPP Loans 
 
1. 
Early DOJ Prosecutions of PPP Fraud Cases Disproportionately Involved 
Fintechs 
 
An SBA OIG official tasked with investigating PPP fraud described fintechs as “the paths 
of least resistance” for bad actors seeking a PPP loan.91  Multiple analytical projects based on 
PPP fraud prosecutions lend credence to this opinion and indicate that fintechs were 
disproportionately linked to PPP fraud.  In October 2020, a Bloomberg analysis found that 
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fintechs handled 75 percent of the approved PPP loans that had been connected to fraud by DOJ, 
despite arranging just 15 percent of PPP loans overall at that point.92  An October 2020 analysis 
conducted by POGO found that nearly half of the approved PPP loans in the first 56 PPP fraud 
cases involved just seven fintechs and fintech-partnered banks.93   
 
2. 
Experts Found That Fintechs and Fintech-Partnered Lenders “Specialized in 
Dubious Loans” 
 
Researchers at the McCombs School of Business at the University of Texas found that 
fintechs and fintech-partnered financial institutions were the PPP lenders most closely associated 
with potentially fraudulent loans.  According to media reports, the researchers found that certain 
fintech-partnered lenders appeared to “specialize in dubious loans,” with the analysts concluding 
that fintechs made around 32 percent of PPP loans but accounted for more than 60 percent of all 
suspicious PPP loans originated.94  Their findings indicated that “replacing traditional lending 
with FinTech lending amplified misreporting problems.”95    
 
The study also found that “the four largest FinTech lenders, Cross River [Bank], 
Prestamos [affiliated with Blueacorn], Harvest [affiliated with Womply], and Capital Plus 
[affiliated with Blueacorn] exhibited high rates of misreporting and large lending volume 
growth” and that they did not get better over time, as “[fintech] lenders often doubled or tripled 
their potential misreporting rates in round 3 compared to rounds 1 and 2.”96  The researchers 
asserted that “not all [fintech] lenders have high misreporting rates,” citing low rates at fintechs 
Square and Intuit and concluding that “online lending in and of itself does not appear to be the 
problem.” 97  However, the study’s authors concluded that: 
 
[T]he increasing scale of [fintech] misreporting through time indicates that current 
penalty and enforcement systems are not effective.  If the system is not changed for 
future programs, the most likely outcome is even more of the same.98 
 
Ultimately, the study concluded that some “established FinTech lenders persistently have 
low rates of misreporting, indicating that [fintech] lending need not be substandard” and that 
“incentives in the PPP appear misaligned in that [fintech] lenders with widespread indicators of 
misreporting made billions of dollars dispersing loans with apparently lax oversight 
procedures.”99   
 
G. 
The Select Subcommittee’s Investigation into Fintechs’ Handling of 
Fraudulent and Otherwise Ineligible PPP Loans  
 
On May 27, 2021, the Select Subcommittee requested documents and information from 
four companies—Kabbage, Bluevine, Cross River Bank (Cross River), and Celtic Bank 
(Celtic)—after public reports alleged that these fintechs and bank partners failed to adequately 
screen PPP loan applications for fraud.100  On November 23, 2021, the Select Subcommittee 
expanded its investigation to include Blueacorn and Womply after researchers at McCombs 
School of Business at the University of Texas issued a study indicating that these highly prolific 
fintechs may have also been disproportionally linked to financial crime in the PPP.101   
 
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The Select Subcommittee also obtained information from Harvest, Capital Plus, 
Prestamos, American Express, Fountainhead, Benworth, Wells Fargo, Bank of America, and 
CDC Small Business Finance.  In the course of the investigation, Select Subcommittee staff 
reviewed more than 83,000 pages of internal documents and had multiple briefings and 
conversations with former fintech employees and others with knowledge of fintech activities.  
The Select Subcommittee also was briefed by staff of the SBA and the SBA OIG.  
  
III. 
INVESTIGATIVE FINDINGS 
 
A. 
Fintechs and Lenders Observed Significant Fraud in the PPP, Which They 
Attributed to Program Mismanagement as They Sought to Evade 
Responsibility 
 
1. 
Fintechs and Lenders Observed Large-Scale PPP Fraud  
 
Internal communications obtained by the Select Subcommittee show that fintechs and 
their lending partners both anticipated and observed high levels of fraud in the PPP.  As early as 
April 2020, Cross River’s Chief Risk Officer warned in an internal email that “there will be 
fraud rings going after these [PPP] funds.”102  Months later, in an October 2020 email, the CEO 
of Celtic Bank wrote that “[t]he [PPP] fraud is definitely getting up there,” noting that the level 
of fraud was “not surprising given the program guidelines.”103   
 
Eight months after the start of the PPP, it was clear to some lenders that the fraud they 
had predicted was occurring and was not well controlled.  In an internal November 2020 email, a 
Celtic Bank compliance manager noted that the company’s involvement in the PPP had led to 
increased fraud: 
 
While Celtic’s Bank’s participation in the Paycheck Protection Program provided 
emergency funding to small businesses throughout the Country [sic], we have also seen 
an uptick in fraudulent and money laundering activities identified across the Bank and 
our Strategic Lending Partnerships.104 
 
This high level of fraud taxed the financial crime compliance capabilities of PPP lenders.  
In March 2021, a full year into the PPP program, a Celtic Bank financial crime manager again 
observed that the high levels of fraud related to the PPP continued, telling a Bluevine financial 
crime manager that “the surge in fraud associated with [the] PPP has strained all of our 
resources.”105 
 
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While observing that the rate of fraud was high and noting that their capabilities to detect 
and respond to this fraud were under strain, lenders struggled to determine exactly how much 
taxpayer money was being lost to PPP fraud.  In an August 12, 2020, email obtained by the 
Select Subcommittee, Celtic Bank’s President and Chief Operating Officer estimated that 
potential fraud losses in the PPP could have already reached “over $10 billion” and described 
potential overall taxpayer losses to PPP fraud as a “helluva lot of money.”106  On July 18, 2020, a 
senior Kabbage official wrote that “Experian data services reports 4.5 [percent] [PPP fraud rate] 
in their network.”107  In a September 8, 2020 email, a Kabbage executive claimed that consumer 
credit reporting agency Equifax was “seeing confirmed [PPP] fraud between 4 and 10 
[percent],”108 which would amount to as much as $80 billion in fraudulent loans across the entire 
life of the program, if the rate was consistent. 
 
 
 
2. 
Fintechs and Lenders Sought to Shift Risks of Fraud Losses to the Taxpayer and 
Criticized Trump Administration Mismanagement  
 
Internal emails obtained by the Select Subcommittee show that PPP lenders expressed 
concern that they would be held accountable for taxpayer losses if and when the extent of PPP 
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fraud became publicly known.  At the working level, in response to an analyst’s question about 
flagging potentially fraudulent applications, a Kabbage risk manager told his team: 
 
I do think we should not look at fraud here from a kabbage [sic] lending perspective. … a 
fundamental difference is the risk here is not ours - it is SBAs [sic] risk.109   
 
In response, a Kabbage risk management employee wrote:  
 
I understand that[.] I think I personally am just concerned something will come back at 
us.  Can we be included in any discussions regarding the SBAs [sic] feelings about our 
reviews?  I personally would like to know if we’re under heat from the gov [sic] for 
fraudsters robbing the gov [sic].110  
 
At the executive level, lending executives involved in the PPP who witnessed fraud rates 
increase at their institutions expressed trepidation not only about potential reputational harm, but 
also that their institutions would be held financially liable for the taxpayer losses.  In an internal 
email obtained by the Select Subcommittee, the CEO of Celtic Bank wrote that “the industry 
should push hard to make sure the SBA accepts the fraud risk”—presumably so that the 
consequences of the fraud would fall upon taxpayers, not the lenders.111  The CEO of 
Benworth—a top PPP lender—suggested that he was concerned about the amount of PPP fraud 
that their fintech partner failed to detect, writing in an internal email:  “When the party is over 
and the lights turn on, we will be the only ones at the party (and it seems standing naked).”112   
 
 
 
Fintechs and their lending partners recognized that high fraud rates resulted from the 
Trump Administration’s mismanagement of the PPP.  In a September 30, 2020 email, Kabbage’s 
head of policy wrote:  “At the end of the day[,] it’s the SBA’s shitty rules that created fraud, not 
[Kabbage].”113  Another bank executive pointed out that the Trump Administration was too slow 
to provide guidance on how to identify and prevent PPP fraud.  In response to an August 2020 
SBA email announcing a webinar on preventing PPP fraud, Celtic Bank’s President called the 
Trump Administration’s action “a bit late,” remarking that the “horse has been out of the barn for 
a while now” with respect to PPP fraud.114  
 
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B. 
Blueacorn Took Only Minimal Steps to Prevent Fraud in Its Facilitation of 
Billions of Dollars in PPP Loans, While Abusing the Program to Enrich Its 
Owners 
 
Blueacorn, a fintech startup, was founded by a group of Arizona entrepreneurs in April 
2020 specifically to facilitate PPP loans.115  To support the company in facilitating PPP loans, 
Blueacorn hired Arizona-based consultancy Elev8 Advisors to advise it on compliance with 
relevant laws and regulations related to the PPP and to assist with responding to subpoenas and 
other requests for records.116  Elev8 Advisors also provided applicant “verification services”  to 
Blueacorn and hired contractors to review PPP applications on the fintech’s behalf for eligibility 
and to flag potentially fraudulent applications.117 In presentations to lending partners, Blueacorn 
included one of the owners of Elev8 Advisors as part of their leadership team.118  
 
In 2021, Blueacorn was involved in the processing of nearly all of the loans facilitated by 
the top two PPP lenders that year by loan volume—Capital Plus and Prestamos.119  Blueacorn’s 
partner lenders together facilitated almost three times as many PPP loans in 2021 than JPMorgan 
Chase and Bank of America combined.120   
 
 
Figure 1: Chart showing the top PPP lenders by number of loans approved in 2021, indicating that  
entities partnering with Blueacorn (Prestamos and Capital Plus) and with Womply (Harvest and  
Benworth) approved the highest number of PPP loans. 121 
 
Blueacorn provided fraud prevention, eligibility verification, customer support, and other 
services for Capital Plus and Prestamos.  Both lenders told the Select Subcommittee that they 
largely delegated their fraud prevention and eligibility verification functions to Blueacorn and 
relied on the fintech to screen applications.122  For its work, Blueacorn received over $1 billion in 
taxpayer dollars from Prestamos and Capital Plus.123 
 
The scale of Blueacorn’s involvement in the PPP amplifies concerns about their failures 
and potential misconduct.  In a conversation with Select Subcommittee staff, an SBA OIG 
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employee involved in PPP fraud described fintechs, including Blueacorn specifically, as “paths 
of least resistance” for those looking to commit PPP fraud, as discussed in Section D below.124  
DOJ prosecutions of multiple borrowers that received PPP loans from Blueacorn’s lending 
partners appear to support this assessment.125  In addition to concerns over Blueacorn’s handling 
of financial crime prevention, public allegations of poor borrower support have also plagued the 
fintech.  A ProPublica article described the dissatisfaction that multiple PPP applicants felt 
towards Blueacorn.126  A review of Blueacorn’s social media accounts show that the company 
received thousands of customer complaints, more than they were able to respond to at the 
time.127  Despite these failings, by the beginning of 2022, Blueacorn had disbursed to its 
ownership as profits over $250 million of the funds that they were given in 2021 to facilitate the 
PPP.128 
 
As detailed below, the Select Subcommittee’s investigation found that Blueacorn spent 
less than one percent of its budget on fraud prevention efforts.  In addition to spending little on 
this function, multiple former Blueacorn employees told the Select Subcommittee that they were 
both poorly trained and pressured by Blueacorn leadership to approve potentially fraudulent 
loans.  The Select Subcommittee’s investigation also found examples of potential misconduct by 
Blueacorn and its leadership.  Internal communications and statements made by Blueacorn 
insiders indicate that Blueacorn—which claimed to be focused on the underserved—both 
prioritized and gave less scrutiny to high dollar loans.  Most troublingly, the Select 
Subcommittee’s investigation found that Blueacorn’s leadership—including those tasked with 
preventing fraud in the PPP—may have themselves committed PPP fraud or used their company 
to improperly obtain PPP loans.   
  
1. 
Blueacorn Processed a High Volume of PPP Loans, Despite Lacking Adequate 
Preparation or Expertise 
 
a. 
Blueacorn Processed $12.5 Billion in PPP Loans in 2021, Becoming One of the 
PPP’s Most Significant Participants 
 
Blueacorn was founded in April 2020 with “the singular purpose” of facilitating PPP 
loans for small businesses.129  The initial Blueacorn leadership team consisted of cell phone 
accessory merchant and former Lehman Brothers subprime derivative salesman Nathan “Nate” 
Reis (Co-Founder and former Chief Executive Officer), his wife and former television 
newscaster Stephanie Hockridge (Co-Founder and former Customer Service Lead), technology 
entrepreneur Noah Spirakus (Co-Founder and Chief Technology Officer), and other Arizona-
based entrepreneurs.130  In January 2021, Blueacorn turned to Elev8 Advisors, an Arizona-based 
consultancy, as a compliance consultant and marketing partner.131  Elev8 Advisors was founded 
in March 2018 by Adam Spencer, a former payments processing executive, and his wife, Kristen 
Spencer, who previously worked at a retail branch of a bank and sold insurance.132 
 
Blueacorn, a self-described “fintech lender service provider,” stated that it “facilitate[d] 
the application for and fulfillment of PPP loans predominantly for businesses and workers who 
qualified as independent contractors, self-employed individuals, freelancers, and gig workers.”133  
Blueacorn claimed that it “ultimately support[ed] 808,000 small business owners / sole 
proprietors via disbursement of $12.5 billion in SBA PPP funds.”134  As such, Blueacorn was 
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involved in the disbursement of more PPP funds in 2021 than America’s largest bank, JP Morgan 
Chase.135  Blueacorn’s participation in the PPP was also significant in terms of number of loans 
approved.  According to Blueacorn, out of the over 1.7 million loan applications that were 
formally submitted by potential borrowers (after completing initial screening), the fintech 
approved and sent to lenders 739,282 PPP loan applications for funding in 2021.136 
 
Blueacorn, with the assistance of Elev8 Advisors, facilitated PPP loans through lenders 
Capital Plus and Prestamos.  In January 2021, Blueacorn entered into an LSP agreement with 
Capital Plus, under which Blueacorn was to provide “staff services” to Capital Plus “to carry out 
certain functions related to the PPP Loan Portfolio rather than hiring employees directly for those 
same staff functions.”137  According to that agreement, this arrangement was meant to “be more 
economical and [] result in a higher level of service and expertise to provide better delivery to 
the small business concerns.”138  On April 14, 2021, Prestamos and Blueacorn signed a similar 
LSP agreement under which Blueacorn would engage “in the origination, marketing, 
underwriting, and funding of loans” for Prestamos.139   
 
In its partnerships, Blueacorn promised to provide crucial underwriting activities that 
were required as part of the PPP, including gathering and verifying business information, loan 
eligibility information, and applicant-supplied tax documents.140  In a presentation obtained by 
the Select Subcommittee, Blueacorn promised Capital Plus that it would “process[], 
underwrite[], approve[] & fund[] loans that qualify for the PPP.”141  Blueacorn claimed to have a 
“proprietary document intake engine [that] allows our team to process certain types of [PPP] 
applications in 5 minutes.”142   
 
Blueacorn also touted its underwriting expertise and claimed to “have contracted a trusted 
partner to provide highly trained, skilled, and vertically focused underwriters who have come 
from various walks of the Financial Services industry including small business services, lending, 
and payments.”143  In a marketing presentation given to Prestamos, Blueacorn promised to 
provide “technology and financial expertise to streamline the [PPP] application process,”144 and 
stated that the fintech had an “extensive vetting and approval process.”145  Prestamos told Select 
Subcommittee staff that, under their arrangement with the fintech, “the majority of the [PPP 
processing] workflow was going to go through [Blueacorn].”146 
 
b. 
Blueacorn Advertised “Free Money” and Loan Qualification in “Less Than 30 
Seconds,” Attracting Millions of PPP Applicants  
 
According to company data, over 4.1 million applicants completed Blueacorn’s online 
eligibility questionnaire and started a PPP application.147  Blueacorn used targeted internet 
advertisements, referral agreements, billboards, radio commercials, and other traditional 
marketing mediums to attract prospective applicants to its website with promises of easy loan 
qualification.148   
 
In one promotional appearance, Ms. Hockridge described the PPP as “$100 billion dollars 
of free money,” directing applicants to Blueacorn’s website to “find out in less than 30 seconds” 
whether they qualified for a PPP loan.149  Ms. Hockridge promised potential applicants that, “if 
you end up making it to the [Blueacorn] log-in page, you qualify” for a PPP loan.150  In 
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Facebook advertisements, Blueacorn reportedly told prospective borrowers that the loans were 
“100% forgivable, meaning you don’t need to pay anything back” and offered approval in one to 
two days.151  
 
c. 
Blueacorn Received Over $1 Billion in Taxpayer-Funded Fees for Its PPP 
Services 
 
Blueacorn received over $1.08 billion from its lending partners as fees for its PPP 
services in 2021.152  According to internal financial information obtained by the Select 
Subcommittee, Prestamos paid Blueacorn $700 million and Capital Plus paid Blueacorn $386 
million in PPP processing fees.153  Under their LSP agreements, Capital Plus and Prestamos gave 
Blueacorn the majority—up to 70 percent—of the processing fees that they received from the 
SBA.154  In communications obtained by Select Subcommittee staff, Mr. Reis remarked on 
Blueacorn’s success, bragging that his company had made nearly $1.5 billion dollars in less than 
half a year and that the company’s accounts held $750 million in cash.155 
 
d. 
Despite Becoming an LSP a Year into the PPP, Blueacorn Admitted to Being 
Unprepared for the Role It Took in the Program 
 
Unlike the fintechs and lenders that were faced with the challenge of reviewing PPP loans 
in the uncertain environment at the start of the program in April 2020, by 2021, Blueacorn’s 
operators had a year to observe the program and to formulate strong systems before entering the 
LSP market.  Despite this, Blueacorn executives admitted that the fintech’s services were hastily 
assembled.   
 
Ms. Hockridge described Blueacorn’s operation as “building the parachute after we 
jumped out of the plane.”156  In an interview posted to Medium, CEO Barry Calhoun described 
Blueacorn as “a fly-by-seat-of-the-pants sort of environment.”157  In an April 2020 Twitter 
message, another Blueacorn co-founder wrote that Blueacorn’s founders “built a Fintech airplane 
while falling from the sky, in three minutes (weeks, but who’s counting).”158 
 
e. 
Blueacorn’s Eligibility Verification and Fraud Investigations Leadership Lacked 
Significant High-Level Experience in Financial Crime Prevention and Fraud 
Investigations 
 
Blueacorn Chief Operating Officer Matt Yahes and another Blueacorn employee who 
served as underwriting manager were identified by Ms. Spencer as being the Blueacorn 
leadership members who supervised the fintech’s eligibility verification processes.159  According 
to conversations with former Blueacorn employees and discussions with Blueacorn, the fintech 
primarily relied on three senior staffers—an operations manager, the aforementioned 
underwriting manager, and an investigations manager—to develop Blueacorn’s fraud detection 
process, produce PPP loan review guidance documents, supervise fraud investigations, and 
answer questions related to fraud and eligibility by loan reviewers.160   
 
Despite drafting Blueacorn’s primary guidance document for verifying eligibility and 
identifying fraud, neither Blueacorn’s underwriting manager nor its operations manager appear 
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to have had any prior training or experience in developing institution-wide policies for 
identifying or preventing fraud in large volume lending programs.161  Yet, in its promotional 
material, Blueacorn prominently mentioned that its underwriting manager “came from Silicon 
Valley Bank and underwrote loans in PPP Round 1.”162  This is an apparent reference to an 
individual who appears to have spent just 17 months at Silicon Valley Bank in a relatively junior 
underwriting position and had less than three years total of banking experience when he joined 
Blueacorn.163  According to multiple Blueacorn reviewers who spoke to Select Subcommittee 
staff on condition of anonymity, this underwriting manager was relied on to train reviewers and 
to answer their questions regarding fraud and eligibility.164   
 
Blueacorn’s operations manager also appears to have had little experience in banking and 
virtually no experience in fraud detection or financial crime compliance before managing the 
review of hundreds of thousands of taxpayer-backed PPP loans.  Describing his role in the 
fintech, the operations manager claimed to have “built a [Blueacorn] department from the ground 
up” that “managed a team of 200+ and processed over 1 million PPP applications for 
borrowers.”165  Blueacorn’s operations manager, who was 25 years old and appears to have had 
four years of experience with financial entities, authored the primary eligibility review and fraud 
detection documents used by Blueacorn application reviewers as their primary resource guide.166   
 
Similarly, Blueacorn’s investigations manager supervised the company’s dedicated fraud 
investigations team for the duration of the fintech’s involvement in the PPP.167  Despite 
supervising Blueacorn’s crucial fraud investigation function, this manager appears to have had 
no prior professional experience in investigations, financial crime compliance, banking, or fraud 
prevention, having previously worked in the areas of health care analysis and marketing.168 
 
f. 
Elev8 Advisors’ Co-Owners, Unqualified to Review PPP Loan Applications for 
Fraud and Eligibility, Hired Similarly Unqualified Friends and Family to 
Perform These Tasks 
 
Blueacorn told the Select Subcommittee that it had only “one direct employee who 
assisted with processing PPP loan applications.”169  The company explained that it “almost 
exclusively relied on third-party companies and contractors” to process PPP loan applications.170  
As noted above, Blueacorn relied heavily upon Elev8 Advisors—a small Arizona-based payment 
consultancy owned by husband and wife entrepreneurs Adam and Kristen Spencer—to review 
Blueacorn’s hundreds of thousands of PPP loans.171  Despite being involved in the review of 
hundreds of thousands of PPP applications, Elev8 Advisors had just a single employee, 
according to an August 2021 PPP loan forgiveness application.172   
 
Elev8 Advisors informed the Select Subcommittee that it “performed significant advisory 
services, including those relating to banking as a service, . . . for very sophisticated financial 
service clients that we can’t reveal because of confidentiality.”173  In response to requests from 
the Select Subcommittee, Elev8 Advisors declined to furnish specific examples of prior 
experience that was similar to or would otherwise have prepared the consultancy for the role that 
it played with respect to Blueacorn and the PPP.  Citing confidentiality obligations, the company 
declined to identify a single company for which it had provided loan underwriting consultancy or 
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Know Your Customer (KYC), Anti-Money Laundering (AML), Bank Secrecy Act (BSA) 
compliance, fraud prevention, and compliance auditing consulting services prior to the PPP.174   
 
Ms. Spencer was herself a key supervisor in Blueacorn’s eligibility verification and fraud 
prevention program, managing a group of contractors who worked as eligibility verifiers and 
document processors for Blueacorn.175  Ms. Spencer, who personally reviewed PPP application 
for signs of fraud, also received escalation of potential fraud from the reviewers under her 
company’s supervision, and was responsible for directing these escalations to Blueacorn senior 
staff.176  One Blueacorn PPP application reviewer told Select Subcommittee staff that Ms. 
Spencer played a central role in the fintech’s fraud prevention processes:  “At one point I 
contacted Kristen Spencer to ask what the fraud department was and she said that she was the 
fraud department.”177   
 
Ms. Spencer had no prior experience leading or performing fraud prevention or 
underwriting services for multibillion-dollar federal programs.178  Her most recent experience 
prior to her work with Elev8 Advisors was as the owner of an online clothing shop.179  Prior to 
that, Ms. Spencer worked in retail banking and insurance sales until 2006.180  According to a 
former Elev8 Advisors contractor who spoke to Select Subcommittee staff on condition of 
anonymity, Ms. Spencer quickly became overwhelmed by her role as the recipient of 
applications potentially flagged for fraud and sought to minimize the number of applications that 
were being flagged for fraud by those under her supervision.181  The contractor told Select 
Subcommittee staff that Ms. Spencer admonished PPP loan application reviewers for sending 
“too many loan applications to her for fraud review” and stated that “she could not process this 
amount.”182  Slack messages obtained by the Select Subcommittee appear to confirm this 
account.  In one message to a Blueacorn information technology consultant, Ms. Spencer wrote, 
“I was doing a million jobs…I was…the fraud team, plus in charge of [the] processing / 
underwriting team.”183 
 
 
 
Elev8 Advisors hired its co-owners’ inexperienced friends and relatives, including the 
couple’s parents, siblings, and children, to review and underwrite PPP applications in connection 
with its fraud-prevention contract with Blueacorn.184  According to a former Blueacorn 
contractor:  
 
 [Mr. Spencer] hired at least 30 of his closest friends and family to work as underwriters 
submitting PPP loans to the SBA through Blueacorn[]. These employees include but are 
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not limited to his wife, sons, brother and sisters in law, father in law [sic] and mother in 
law [sic], and friends of himself and his sons.185   
 
Documents obtained by the Select Subcommittee confirm that Mr. Spencer’s children 
(one of whom had just recently graduated from high school) and other close relatives worked as 
PPP application reviewers and loan underwriters.186  These individuals included multiple 
professionals from industries with no connection to the financial sector, and with no apparent 
experience in financial crime compliance, fraud prevention, or underwriting.187  In a Slack 
message sent from Ms. Spencer to Ms. Hockridge, Ms. Spencer called her teenaged son a “really 
strong underwriter” and later shared with Ms. Hockridge a picture of him “looking up bank 
accounts” as part of reviewing PPP loans.188  
 
2. 
Blueacorn Spent Little on Fraud Prevention and Eligibility Verification, While 
Directing Hundreds of Millions of Dollars to Its Owners and Executives 
 
Internal Blueacorn financial documents obtained by the Select Subcommittee indicate 
that Blueacorn allocated few of its financial resources to fraud prevention, eligibility verification, 
or customer support functions—directing a significant majority of the SBA processing fees that 
it received to its owners as profit and to a marketing firm owned by Blueacorn’s own strategic 
advisors.189  According to these documents, $666 million of the $1.08 billion in taxpayer funded 
SBA processing fees that Blueacorn received—well over half of the total—went to Paynerd (also 
known as Paynerdier), a marketing company founded and operated by Blueacorn Strategic 
Advisor Matt Mandell and Blueacorn Chief Marketing Officer Taylor Hendricksen.190  Nearly 
two-thirds of the remaining funds—$258 million—were disbursed to Blueacorn’s owners as 
profits.191   
 
 
Figure 2: Selected expenditures of Blueacorn related to the PPP.  The largest expense, and the               
bulk of Blueacorn’s PPP proceeds, $666 million, went to Paynerd for marketing.  The second largest 
expenditure was owner and company profits.192 
 
Blueacorn spent little on eligibility verification, fraud prevention, or technology 
compared to the large amount of taxpayer money that went to its owners and a marketing firm 
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whose principals were part of Blueacorn’s senior leadership.193  According to internal financial 
documents, Blueacorn spent 0.79 percent ($8,682,207) of its total income on fraud prevention, 
1.26 percent ($13,713,563) on eligibility verification, and 4.75 percent ($51,597,240) on 
technology.194  Similarly, just 0.75 percent of Blueacorn’s total income was spent on customer 
service and support, despite the fintech being inundated with complaints from borrowers about 
the quality of their customer support.195  By contrast, Blueacorn gave its owners approximately 
24 percent of its total income in 2021 as profits and gave a marketing firm controlled by the 
fintechs’ senior leadership over 60 percent of its total income in 2021.196   
 
In an email obtained by the Select Subcommittee, Mr. Spencer pitched potential PPP 
partnerships to banks as a “new profit center” and “low to no risk fee generator.”197  He also 
wrote that the PPP provided an “immediate influx of potential customer growth to cross-sell 
other bank products with no Cost of Acquisition.”198  Although the company disclosed its profits 
and disbursements, Blueacorn declined to provide the Select Subcommittee with profit 
information related to individual owners.  However, according to a Blueacorn operating 
agreement obtained by the Select Subcommittee, Mr. Spirakus owned a 50 percent interest in 
Blueacorn while Mr. Reis and Ms. Hockridge jointly owned the other 50 percent.199  This 
ownership stake could have entitled Mr. Spirakus to $129 million, while Mr. Reis and Ms. 
Hockridge would have shared the other half.  A video created by Mr. Reis and Ms. Hockridge 
and obtained by Select Subcommittee staff show Mr. Reis showing off large amounts of cash in 
a bar on December 21, 2021.200  According to public records, Mr. Reis relocated to San Juan, 
Puerto Rico, which has no capital gains tax, following his work at Blueacorn and has registered 
another company, Lender Service Consultants LLC.201   In an October 8, 2021, video obtained 
by Select Subcommittee staff—geolocated to San Juan, Puerto Rico—Ms. Hockridge recorded 
Mr. Reis on the balcony of a luxury beachfront apartment.202 
 
Messages obtained by the Select Subcommittee made clear that the Spencers saw Elev8 
Advisors’ involvement in the PPP as a significant opportunity to enrich themselves and their 
family members.  In a text message obtained by the Select Subcommittee, Ms. Spencer told 
family members, some of whom worked as PPP loan reviewers, that the PPP was a “once in a 
lifetime opportunity.”203  Ms. Spencer told family members whom the Spencers had hired to 
conduct the PPP review process: “We are doing this for the people we hired to make money.  
Our friends and family.  That is where the money is going.  And it will be life changing money 
for anyone who does it.”204  Referring to the money that she and her family would make from the 
PPP, she continued, “[a]nd while [money is] not everything--it’s a fucking lot.”205  
 
 
 
  
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3. 
Blueacorn Application Reviewers Alleged Poor Training and Reported Being 
Pressured to “Push Through” Potentially Fraudulent Applications  
 
Multiple staff working for Blueacorn to review PPP applications reported serious 
concerns about the company’s processing of PPP loan applications.  An SBA OIG complaint 
obtained by the Select Subcommittee submitted by a former Blueacorn PPP application reviewer 
alleged multiple control weaknesses and poor processes in the fintech’s PPP review program.  In 
the complaint, the former Blueacorn PPP application reviewer described their lack of training: 
 
I was submitting PPP loans to the SBA the first minute of the first day I started 
working….and I was given no formal or informal training on loan underwriting, as well 
as no training on how to properly identify and report fake government identification such 
as a driver’s license.  I was given no training on how to identify fraudulent tax and bank 
documents such as Schedule C and bank transaction history.206 
 
The reviewer noted that the lack of training did not slow down Blueacorn’s review 
process, writing:  “On my first day, without knowing what I was doing, but following instruction 
from my superiors, I submitted at least 300 PPP loans to SBA without any training or any 
understanding of loan underwriting.”207  
  
The reviewer also alleged that Blueacorn’s application review process “incentivized the 
fast and inaccurate submission of PPP loans to the SBA by offering cash bonuses…for 
submitting as many PPP loans to the SBA as quickly as possible.”208  The reviewer also reported 
that they felt pressure from Blueacorn’s leadership to reduce the number of applications flagged 
for fraud, writing: 
 
After several days of trying to accurately perform my job duties and flag potentially 
fraudulent applications for further scrutiny, I was contacted by my superiors about what 
they considered to be an excessive number of flagged loans.  I was subsequently 
pressured to submit a higher number of loans to the SBA despite my concerns of the 
applications potentially containing fraudulent documents.  I was told we were expected to 
process at least 30 to 40 application[s] per hour.209 
 
The reviewer also reported that Blueacorn’s leadership disregarded and downplayed the 
risk of fraud in the PPP: 
 
When I complained to my superiors that I was uncomfortable identifying potential fraud 
and submitting PPP loans to the SBA at this rate, without proper training, I was told on 
multiple occasions by [Blueacorn leadership] that “We are not the fraud police.  Even if 
the applicants are submitting fraudulent documents, we are covered by the applicants[’] 
attestation that what they are submitting is truthful, and even fraud will help stimulate the 
economy.”210  
 
According to the reviewer, Blueacorn management told them:  “We want you to submit.  
The more you submit, the more we get paid.”211 
 
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Select Subcommittee staff spoke with a former Blueacorn eligibility verification 
supervisor, on condition of anonymity, who expressed similar concerns.  The supervisor, who 
managed 15 reviewers that were responsible for reviewing the applications and supporting 
documents submitted by PPP applicants as part of their loan applications, told Select 
Subcommittee staff that Blueacorn reviewers were originally told to screen applications for 
fraud.212  However, according to the supervisor, Blueacorn later de-emphasized fraud screening 
in favor of approving more applications.  The supervisor stated:  “Towards the beginning, they 
wanted us to check for fraud and send it to a fraud department if we noticed anything.”  
However, according to the supervisor, Blueacorn leadership gave new instructions as the 
program progressed.  The supervisor told Select Subcommittee staff that “anything we thought 
was fraud they still wanted us to push it through, and they informed us the SBA would handle 
any fraud we didn’t stop.”213  
  
The Blueacorn supervisor also told Select Subcommittee staff that reviewers frequently 
saw applications with signs of fraud, despite those applications having already cleared 
Blueacorn’s automated systems.  The supervisor informed Select Subcommittee staff that 
reviewers told Blueacorn’s management that they saw fraud that the automated checks did not 
detect, but that Blueacorn management took no action:  “They told us to keep pushing everything 
through.”214   
 
Specifically, the supervisor explained that Blueacorn reviewers were told to approve 
applications even when “the formatting of the bank statements was just off,” and that reviewers 
were told not to reject applications even when their experience indicated that the applications 
were likely fraudulent.215  They said:  “We learned to notice when the bank statements looked off 
and were just pulling info from another company’s bank statement.”216  The supervisor told 
Select Subcommittee staff that their staff were instructed to approve applications that “just didn’t 
look right.”217 
 
A non-supervisory former Blueacorn application reviewer—who also spoke with Select 
Subcommittee staff on condition of anonymity—raised similar issues as those highlighted in the 
SBA OIG complaint and relayed to Select Subcommittee staff by the former Blueacorn 
supervisor.  The former reviewer was responsible for “trying to identify the initial levels of fraud 
or inaccurate information on those initial applications.” 218  However, according to the reviewer, 
they received little guidance from Blueacorn as to how to verify applicants’ eligibility for a PPP 
loan:219  
 
There were a lot of little intricacies with the program or the process that I’m not familiar 
with, not having worked in that industry at all.  There were a lot of questions that came 
up constantly that we’d try to reach out to get answered, and just very seldom could we 
get an answer.  We were told that the rules were constantly changing on what was and 
was not ok.220 
 
The reviewer told Select Subcommittee staff that Blueacorn did little to answer 
reviewers’ questions of whether an application was fraudulent or not.  The reviewer stated:  
“Sometimes questions would get answered, sometimes they wouldn’t.  Sometimes they would 
just reference a document and say hey it’s in there read it to find the answer to your question.”221  
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Another non-supervisory former Blueacorn PPP loan reviewer who also spoke to Select 
Subcommittee staff on condition of anonymity stated that they also had concerns about 
Blueacorn’s PPP loan review process.  This reviewer said that untrained and newly hired 
Blueacorn PPP loan reviewers would ask each other whether applications appeared fraudulent.  
The reviewer told Select Subcommittee staff:  “On a Slack group chat, people would ask whether 
something looked fraudulent to anyone else, and people would either say ‘I don’t know, looks 
fine to me’ or ‘I don’t know, that looks crazy, send it to fraud.’”222  This informal process was 
apparently used to determine which PPP applications would be approved and moved forward in 
the process and which PPP applications would be flagged for potential fraud. 
 
Despite their inexperience, reviewers noted that some applications appeared to be 
fraudulent.  One former reviewer stated that they saw suspicious applications with “the same 
backgrounds on ID pictures or something that looked like a stock photo.”223  The reviewer told 
Select Subcommittee staff that, in response to questions on how to deal with apparent fraud, 
Blueacorn leaderships instructed: “Continue doing what you’re doing.  If it’s outright suspicious, 
flag it, otherwise push it through.”224 
 
In addition to concerns regarding the handling of PPP application reviews, multiple 
former Blueacorn PPP application reviewers told Select Subcommittee staff that they were 
concerned with how the company was treating sensitive PPP applicant data.  A former Blueacorn 
reviewer told Select Subcommittee staff that Blueacorn was “not using encrypted systems when 
dealing with personally identifiable information such as Social Security Numbers” and that, on at 
least one occasion, they “accidentally download[ed] people’s driver’s licenses onto my 
[personal] computer.”225   
 
4. 
Internal Blueacorn Documents Show That Reviewers Were Instructed to Ignore 
All but “Extremely Obvious Fraud”  
 
The statements of former Blueacorn PPP application review staff are supported by the 
internal documentation used by Blueacorn to guide the individuals tasked with determining 
whether applicants were eligible for PPP loans.  The Select Subcommittee obtained Blueacorn’s 
PPP Processing Script, which the company used as “a training document . . . to onboard and 
instruct members of the Eligibility Verification team on how to process loan applications” and 
which served as the “primary resource for processing loans throughout the project.”226   
 
In one section, the PPP Processing Script warned Blueacorn’s loan reviewers that the 
company believed that reviewers were identifying too many fraudulent documents and flagging 
too many loans for additional fraud review.227  The PPP Processing Script informed reviewers 
that application review process changes were being made “in response to feedback that 
[reviewers] were marking too many documents as fraudulent.”228  The document instructed 
Blueacorn’s PPP loan application reviewers to accept loans with suspicious supporting 
documentation:  “if you are doubtful of a document authenticity but are not certain, the rule of 
thumb is to accept it.”229    
 
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. 
 
Asked why Blueacorn’s “primary resource for processing loans” warned reviewers to 
flag fewer applications for fraud, Blueacorn attempted to blame former strategic advisor and 
Paynerd owner Matthew Mandell, telling the Select Subcommittee that it was “likely” Mr. 
Mandell who had complained that Blueacorn reviewers were identifying too many potentially 
fraudulent documents.230  The company stated that Mr. Mandell “regularly suggested to 
Blueacorn leadership that Blueacorn’s increasingly rigorous system was too sensitive.”231  
Blueacorn claimed that Mr. Mandell was likely motivated to make these comments to maximize 
his personal profits since his “company [Paynerd] was compensated only for marketing leads 
that ripened into completed loans.”232   
 
While Blueacorn blamed Mr. Mandell for suggesting that fraud controls be weakened, 
evidence appears to indicate that Blueacorn’s leadership did not push back.  On the contrary, the 
suggestion that PPP application reviewers apply only limited scrutiny to potentially fraudulent 
applications was reflected in the company’s primary guidance document.233  Blueacorn’s own 
revenue and the compensation of many of its executives was also tied to the number of 
applications that ripened into completed loans, meaning that any incentive that Mr. Mandell had 
to maximize the number of completed loans was also shared by the company itself.   
 
The PPP Processing Script also instructed Blueacorn’s PPP application reviewers to only 
flag applications with “extremely obvious fraud” and to ignore other less blatant attempts to 
submit fraudulent identification documents.234  Blueacorn PPP loan reviewers were instructed 
not to flag identification documents with strange font alignment, signatures in unusual places, or 
incorrect or missing watermarks.235  Instead, Blueacorn asked its reviewers to be on alert for loan 
applications with such extremely obvious markers of fraud as applications in the name of 
“Ronald McDonald” or with an address of “123 ABC Lane.”236  Blueacorn’s guidance explicitly 
told PPP loan reviewers not to check drivers’ licenses received as part of a PPP loan application 
against websites with examples of genuine drivers’ licenses.237   
 
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Blueacorn defended its decision to instruct its reviewers not to report indicators of fraud, 
informing the Select Subcommittee that “individual reviewers were ill-suited to identify any but 
the least sophisticated fake identification documents.”238  Blueacorn argued that other layers of 
review, namely an “enhanced due diligence” (which began on June 11, 2021—after the PPP 
program ended) and a specialized investigations team, were better equipped to identity fraud.239 
However, Blueacorn’s specialized teams only reviewed applications that were already flagged 
for fraud by individual reviewers or other sources, meaning that they did not effectively act as a 
backstop to the initial review team’s work.240 
 
5. 
Elev8 Advisors Encouraged PPP Loan Application Reviewers to Minimize Time 
Spent on Application Reviews and to Overlook Fraud Flags  
 
With Blueacorn’s apparent encouragement, Elev8 Advisors encouraged the friends and 
family it hired to review applications at a pace that risked compromising the effectiveness of 
their reviews.  Ms. Spencer pushed reviewers to get through as many applications as possible, 
apparently because doing so would maximize Blueacorn’s and Elev8 Advisors’ profits.  In a 
Slack message obtained by the Select Subcommittee, Ms. Spencer claimed that Blueacorn’s 
Chief Operating Officer, Mr. Yahes, instructed her to “do nothing outside of making sure 
[eligibility reviewers] get through 5000 files a day.”241  Blueacorn’s information technology 
consultant responded, “oy vey, that’s a lot haha.”242  According to internal Blueacorn 
communications, Mr. Yahes was one of two Blueacorn employees primarily responsible for 
directing their eligibility verification team.243 
 
 
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A former Elev8 Advisors contractor who conducted PPP loan reviews for Blueacorn 
informed Select Subcommittee staff that Elev8 Advisors’ loan reviewers were told “the faster the 
better” and that each loan application review “should take you less than 30 seconds.”244  In 
another instance, Ms. Spencer told eligibility reviewers that Blueacorn expected reviewers to 
complete, at a minimum, one PPP loan application review every two minutes.245  Elev8 Advisors 
also assisted Blueacorn in obtaining the services of a publicly-traded company, Business 
Warrior, to also conduct PPP loan verification services.246  In a series of emails between the 
President of Business Warrior and two top Blueacorn executives, Business Warrior’s President 
stated that their loan verification staff would be able to review a PPP application in just 90 
seconds and complete 40 applications per hour per reviewer.247  Emails obtained by the Select 
Subcommittee show that Blueacorn approved Business Warrior’s proposal and arranged to pay 
the company three dollars per PPP application reviewed.248 
 
6. 
Blueacorn’s Automated Review Process Used Off-the-Shelf Technology That 
Was—on at Least One Occasion—Weakened to Ensure Higher Loan Approval 
Rates  
 
Blueacorn claimed that it “simplif[ied] the application processes” for lending programs 
by using “high-quality, proprietary lending software and fraud detection tools.”249  Documents 
obtained by the Select Subcommittee reveal that Blueacorn largely relied on off-the-shelf fraud 
and KYC technology software subscriptions.  According to Blueacorn, it relied on four 
commonly used third party software products (Plaid, Giact, Onfido, and IDology) to “help 
improve our risk posture and mitigate fraud.”250  The Select Subcommittee’s investigation 
determined that, at one point, even one of these off-the-shelf technologies was put aside to 
decrease the amount of potential fraud flagged and increase the number of applicants receiving 
loans (which, by extension, would increase Blueacorn’s profits).    
 
At the end of March 2021, Blueacorn began using IDology, a software that used an 
applicant’s social security information to generate a list of multiple-choice questions that only 
the applicant should be able to answer (such as which home address in a multiple-choice list was 
associated with the applicant).251  In using this tool, Blueacorn determined that IDology 
questions were “quite difficult” for many PPP applicants to correctly answer and flagged a large 
number of applications as suspicious.252  Beginning in early April 2021, Blueacorn began to use 
Onfido as its primary method of identity verification instead of the more rigorous IDology 
questions or human reviews.253  Following Blueacorn’s switch to Onfido, applicants were only 
directed to the IDology system if they failed Onfido or if their application was subsequently 
flagged as suspicious at a later point in the application process.254  
 
7. 
Blueacorn Prioritized and Gave Less Scrutiny to High Value Loans and 
Applicants Deemed “VIPPP” 
  
Contrary to Congress’s clear intent, the Trump Administration and many big banks failed 
to prioritize small businesses in underserved markets, including minority and women-owned 
businesses.255  As a result, small businesses that were truly in need of financial support during 
the economic crisis often faced longer waits and more obstacles to receiving PPP funding than 
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larger, wealthier companies.256  The Biden-Harris Administration took steps to reach women-
owned, minority-owned, low- and moderate-income, rural, and other underserved communities 
through the PPP.257  Blueacorn claimed to support this mission and stated that reaching “[t]iny 
businesses, self-employed individuals, and minority communities [that] are left out in the cold” 
was their fintech’s “core mission.”258  Despite this proclamation, information uncovered by the 
Select Subcommittee indicates that Blueacorn instructed its staff to prioritize—and give less 
scrutiny to—high dollar loans that would earn the company higher commissions. 
 
In communications obtained by the Select Subcommittee, Blueacorn’s senior leadership 
instructed a Blueacorn contractor to prioritize certain large dollar PPP loan applications for 
review and approval over small dollar PPP loans.  In one such communication, Ms. Hockridge 
reminded Ms. Spencer, who supervised Blueacorn-contracted loan reviewers, that large dollar 
PPP loans were more profitable for the company: 
 
I mean…I don’t believe in prioritizing the biggest loans over the smallest…but, there 
should be some understanding that as we get started…closing these monster loans will 
get everyone paid.259 
 
In the same message, Ms. Hockridge also suggested that Blueacorn’s loan reviewers did 
not need to closely review a “monster loan[]” and wrote that it “will take less than 3 minutes to 
approve this application,” assuring Ms. Spencer that the loan was “clean.”260   
 
 
 
In another Slack message obtained by the Select Subcommittee, Ms. Hockridge 
suggested that Blueacorn loan review contractors should prioritize a high dollar PPP loan in the 
amount of $1.9 million.  Ms. Hockridge wrote: 
 
I have a $1.9M deal that’s been sitting in UW [underwriting] Ready for 5 DAYS!!! I 
don’t need to tell you how much Blueacorn makes off that loan alone …261 
 
 
 
 
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In addition to prioritizing large dollar loans over smaller loans, Blueacorn also created an 
exclusive category of PPP loans that were tagged with a “VIPPP” code and managed by Ms. 
Hockridge outside of the standard Blueacorn workflow.262  Ms. Hockridge appears to have been 
eligible to receive an additional commission for each funded VIPPP loan.263  Evidence obtained 
by the Select Subcommittee indicates that Ms. Hockridge, on multiple occasions, appeared to 
instruct Blueacorn loan reviewers to give loans in her VIPPP channel preferential treatment and 
less scrutiny.   
 
In an email between Blueacorn and a PPP loan applicant that were posted to an internet 
message board, a Blueacorn employee reporting directly to Ms. Hockridge apologized for delays 
that the PPP applicant faced related to their PPP loan.264  In that email, the employee wrote, 
“Your loan did not come to us at VIPPP.  You may have applied on the website, rather than our 
link for VIPPP.”265  The employee attributed the poor service given to this PPP loan applicant to 
being “assigned to the regular side of Blueacorn.”266  The employee then promised that she 
would “work on getting you assigned to us at VIPPP” and promised that being assigned to the 
special VIPPP channel would allow her to “get things moving right away.”267 
 
In at least one instance, Ms. Hockridge instructed a Blueacorn application reviewer to 
approve large dollar “VIPPP” loans without following Blueacorn loan review procedures and 
without running the applications through Blueacorn’s automated fraud detection software 
system.268  Representatives of a Blueacorn contractor told the Select Subcommittee: 
 
In May 2021, [a Blueacorn loan reviewer] was asked to assist Ms. Hockridge in 
reviewing these VIPPP loans. [The Blueacorn loan reviewer] informed [her supervisor] 
that Ms. Hockridge was asking her to prioritize and submit large loans without following 
protocols that [loan reviewers] had been trained to complete.269 
  
In another communication obtained by the Select Subcommittee documenting a separate 
incident, Ms. Hockridge instructed that Blueacorn contractors should approve a “VIPPP” PPP 
loan application without full review, writing:  “no need to put your spot=checker [sic] on it--the 
file is good…just needs approval from someone other than me…since it’s in my channel.”270   
 
 
 
 
Ms. Hockridge also instructed subordinates to deprioritize non-VIPPP loans.  In Slack 
messages obtained by the Select Subcommittee, Ms. Hockridge directed a Blueacorn loan 
reviewer to “delete” certain loan applications not affiliated with her VIPPP channel, including 
loans that were part of another channel referred to as “QWK.”271  Referring to these loans, Ms. 
Hockridge wrote, “FUCK QWK,” “delete them,” and “who fucking cares.”272  Blueacorn’s 
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founder made clear that the focus on approving and funding VIPPP loans meant that some non-
VIPPP loans might not be funded, but that she did not care about the disruption that it would 
cause to regular—non VIPPP—PPP applicants. 273  Ms. Hockridge wrote, “We’re not the first 
bank to decline [PPP] borrowers who deserve to be funded … they go elsewehre (sic).”274 
 
 
 
8. 
Blueacorn Executives Improperly Charged PPP Applicants for Loan Processing 
 
According to PPP program guidance, agent fees could only be paid by the lender from the 
fees the lender received from the SBA.  PPP rules expressly prohibited loan agents from 
collecting fees directly from borrowers or being paid out of PPP loan proceeds.275  However, 
according to Blueacorn’s primary compliance consultants, Blueacorn co-founders Mr. Reis and 
Ms. Hockridge requested that PPP borrowers directly pay them substantial fees out of the 
proceeds of their PPP loans.276  Representatives for the principals of Elev8 Advisors told the 
Select Subcommittee that Mr. Reis and Ms. Hockridge attempted to charge multiple PPP 
applicants a fee of up to 10 percent of the loan value for PPP application preparation and 
processing services, in violation of SBA rules.277   
 
Elev8 Advisors’ representatives also told the Select Subcommittee that Elev8 Advisors’ 
owners informed Blueacorn’s Chief Operating Officer that Ms. Hockridge had asked PPP 
applicants to pay her directly for Blueacorn’s PPP assistance services.278  The representatives of 
Elev8 Advisors also told the Select Subcommittee that Mr. Reis asked Elev8 Advisor’s owners 
for payments after he helped them get a first round PPP loan approved.279  The Select 
Subcommittee could not confirm how many loans Ms. Hockridge may have improperly charged 
additional fees for.   
 
9. 
Blueacorn Executives Gave PPP Loans to Themselves, Their Businesses, and 
Their Business Associates Without Controls to Prevent Conflicts of Interest 
 
The Select Subcommittee’s investigation revealed that individuals with senior leadership 
positions at Blueacorn and their close business or family associates—including those affiliated 
with Elev8 Advisors—received more than $650,000 in PPP loans.280  Of that amount, Mr. Reis, 
Ms. Hockridge, and companies that they owned received nearly $300,000 in PPP loans, nearly 
$200,000 of which came through Blueacorn or from Blueacorn’s most important business 
partners:  Prestamos and Capital Plus.281  A Blueacorn loan review supervisor who spoke with 
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Select Subcommittee staff on condition of anonymity said that the fintech had no formal controls 
or policies to govern the issuance of loans to insiders.282   
 
In 2021, Mr. Reis received a $20,832 PPP loan for himself as an independent 
contractor,283 a separate $20,832 PPP loan for Juuice, LLC (a company in which he is the sole 
member and employee),284 and a $62,500 loan for Juuice, Inc. (a separate mobile phone 
accessory company that he both owned and claimed to be one of three employees of).285  The 
loans for Mr. Reis and Juuice, Inc. were both facilitated by Blueacorn and the loan for Juuice, 
LLC was issued by Blueacorn partner Prestamos.286   
 
In 2021, Ms. Hockridge received a $14,427 PPP loan for herself as an independent 
contractor287 and a separate $20,832 PPP loan for Body Politix, LLC (a company in which she is 
the sole member and employee),288 and likely benefited from the $62,500 PPP loan Mr. Reis 
obtained for Juuice, Inc., a company that Ms. Hockridge claimed paid her a six-figure salary.289  
Ms. Hockridge and her affiliated companies received nearly $100,000 in PPP loans—each 
facilitated by Blueacorn—in the same year that she was leading Blueacorn’s loan processing and 
review operations.290  
 
 
Figure 3: Table of PPP loans received by Blueacorn’s Founders.291 
 
Other Blueacorn owners and executives also received PPP loans that were facilitated by 
the company.  Blueacorn Co-Founder Michael Cota was linked to two Blueacorn PPP loans.292  
Lincoln Jore, another of Mr. Reis’ business partners who was then-president of Juuice, Inc., 
received at least $108,000 in PPP loans through Blueacorn’s lending partners for himself and his 
business, Men’s Revival LLC.293   
 
On June 8, 2021, Capital Plus Chief Financial Officer (CFO) Farzana Giga asked 
Blueacorn to provide it with a list of PPP loans received by Ms. Hockridge, Mr. Reis, their 
affiliated companies, and other Blueacorn insiders.294  Capital Plus did not disclose the reason for 
this request or how the lender became aware of the loans, months after they were issued.295  In 
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response to Capital Plus’ request, Blueacorn identified 11 loans related to Blueacorn insiders. 296  
Much of the paperwork associated with these loans had been signed by Ms. Giga.297   
 
In a June 23, 2021 letter to Capital Plus, Blueacorn claimed that, “[i]n the course of 
compiling the list,” the company “developed questions about several of the applications.”298  Ms. 
Hockridge and Mr. Reis, at Capital Plus’ request, repaid the PPP loans totaling over $100,000 in 
July 2021.299  At least six of the PPP loans (totaling at least $165,124) that Mr. Reis and Ms. 
Hockridge received from Blueacorn-partner Prestamos and other lenders were forgiven, 
according to public records.300   
 
10. 
Blueacorn’s Co-Founders May Have Fraudulently Received PPP Loans 
 
The PPP loan applications for Mr. Reis and Ms. Hockridge contain inconsistencies 
indicating that Blueacorn’s owners—who were personally involved in running fraud prevention 
and eligibility verification efforts for the fintech—may have themselves committed fraud against 
the PPP.  In a PPP loan application signed by Mr. Reis on February 5, 2021, Mr. Reis falsely 
claimed to be both a military veteran and an African American,301 contradicting other PPP loan 
applications where he listed himself as white and a non-veteran.302  Mr. Reis may have falsely 
listed himself as an African American veteran in an effort to take advantage of changes made in 
early 2021 to prioritize veteran and minority-owned businesses.303   
 
In another example of potentially suspicious activity, Mr. Reis—claiming to be an 
independent contractor—was granted a PPP loan on April 27, 2020 based on documentation he 
submitted purporting to show that he received $96,000 from Body Politix—a company owned by 
his wife, Ms. Hockridge.304  However, a bank statement supplied by Mr. Reis as part of his PPP 
application to Capital Plus show no transfers from this company, or any transactions indicating 
that he received $96,000 in consulting income.305  Further, in PPP loan applications submitted by 
Ms. Hockridge for Body Politix in June 2020 and February 2021, the company did not list the 
purported payments to Mr. Reis when providing details on the company’s expenses.306  These 
inconsistencies raise concerns that Body Politix did not, in fact, make the payments that Mr. Reis 
claimed as the basis of his income in his PPP loan application. 
 
Although the SBA required PPP applicants to disclose as part of their application any 
other businesses that they owned, both Mr. Reis and Ms. Hockridge checked the “No” box on 
multiple PPP applications to indicate that they did not have any other businesses.307  This is 
apparently contradicted by other PPP applications and public records indicating the couple’s 
ownership in Juuice, Inc., Juuice, LLC, Body Politix, and Blueacorn.  The failure to disclose 
ownership in other companies may have been an effort to prevent additional SBA scrutiny of the 
multiple streams of PPP funding that they received.   
 
As noted in Section 12 below, Capital Plus informed the Select Subcommittee that it 
initiated an investigation into loans that it issued to Mr. Reis, Ms. Hockridge, and their affiliates.  
After that investigation, Mr. Reis and Ms. Hockridge repaid some of these loans at Capital Plus’s 
request.308  Nevertheless, the inconsistencies and indicators of potential fraud in the PPP 
applications of Mr. Reis, Ms. Hockridge, Juuice, Inc., Juuice, LLC, and Body Politix, LLC—in 
addition to their approval by Blueacorn—merit further investigation by the SBA OIG and, if 
warranted, DOJ. 
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11. 
Elev8 Advisors’ Owners Worked with Blueacorn Leadership to Give Themselves 
Dubious PPP Loans Through Blueacorn 
  
On February 15, 2021, days after securing multiple PPP loans for herself and her 
company, Ms. Hockridge—who at the time owned Blueacorn and took a leading role in its loan 
underwriting operations—sent a message to Ms. Spencer informing her that she would be 
“creating applications for Elev8 [Advisors] and Sweet Pea [sic] today.”309  In the same February 
15, 2021 message, Ms. Hockridge told Ms. Spencer:  “Sorry for the delay – I didn’t realize that 
Nate [Reis] had told you we would take care of [your PPP loans].  My bad! I’ll fix that today.”310  
 
           
 
 
One month later, on March 8, 2021, Ms. Hockridge again messaged Ms. Spencer 
regarding their personal PPP loans, writing: “Hey Kristen!  I never heard back from Adam 
[Spencer] on how he wanted to handle your personal PPPs. … I’m just going to send you all of 
the info [and] docs we submitted…and you guys can take care of it.”311  Ms. Hockridge also 
instructed the Spencers to direct their personal PPP applications to a specific employee of Ms. 
Hockridge’s, writing:  “Just make sure Jack [Blueacorn’s underwriting manager] underwrites 
your applications, since he’s not one of your employees.”312  Communications obtained by the 
Select Subcommittee show that Ms. Hockridge then sent corporate information related to the 
Spencers and their businesses to Ms. Spencer.313  The Spencers would later receive PPP loans 
through Blueacorn for themselves and at least one of their businesses.314 
 
 
 
 
In March 2021, Mr. Spencer, Ms. Spencer, two of their sons (one of whom had recently 
graduated high school), two other close relatives, and Sweet P Designs (owned by Ms. Spencer) 
each received PPP loans from Blueacorn partner Capital Plus.315  These loans totaled over 
$117,000 and were all forgiven.316  Ms. Spencer’s Sweet P Designs received another PPP loan in 
May 2021 worth $20,515 from Blueacorn partner Prestamos.317  Each of these loans came 
through Blueacorn, even though, at the time, the Spencers were performing a significant amount 
of Blueacorn’s eligibility verification and fraud prevention work.318  Additionally, Elev8 
Advisors’ subcontractor, Business Warrior—which also reviewed PPP applications for 
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Blueacorn—and its CEO received over $80,000 in PPP loans facilitated by Blueacorn’s lending 
partners.319 
 
 
Figure 4: Loans issued to the Spencers, their children, and the Spencers’ other businesses.320 
 
The Select Subcommittee reviewed the applications corresponding to each PPP loan 
granted to Mr. and Ms. Spencer, their businesses, and their family members.  As with the loans 
Mr. Reis and Ms. Hockridge secured for themselves, multiple loan applications contain markers 
potentially indicative of fraud.  Nearly all of these loans were approved by Blueacorn while the 
Spencers were contracted to conduct eligibility verification and fraud screening for PPP loans.  
In a spreadsheet obtained by the Select Subcommittee from Elev8 Advisors, multiple loans to the 
Spencers, their businesses, and their family members were marked as having an “elev8” partner 
code, indicating that the consultancy was involved in the processing of their own PPP loans.321 
 
Despite listing themselves as co-owners of Elev8 Advisors Group LLC on a June 26, 
2020 PPP loan application to Prestamos322—and despite Mr. Spencer’s ownership of Vital Card, 
Inc. and vending services company Evergreen and Ms. Spencer’s ownership of Sweet P 
Designs323—neither Mr. nor Ms. Spencer disclosed their ownership in these companies on PPP 
loan applications, as required.  In this regard, the Spencers appear to have made false statements 
in an application for Sweet P Designs (signed by Ms. Spencer on March 2, 2021, and submitted 
to Capital Plus),324 in an application for Ms. Spencer (signed by Ms. Spencer on March 15, 2021, 
and submitted to Capital Plus),325 and in an application for Mr. Spencer (signed by Mr. Spencer 
on March 18, 2021, and submitted to Capital Plus).326  
 
Ms. Spencer made other questionable representations on multiple PPP loan applications.  
In an application submitted to Prestamos, Ms. Spencer successfully sought a PPP loan based on a 
claim that she was paid nearly $200,000 for “interior architect” services for her husband’s 
company.327  This claim appears improbable since not only does Ms. Spencer not appear to have 
had previous experience as an “interior architect,” but her husband’s company’s office address 
matches the address of a WeWork shared office space and therefore likely had little need for 
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“interior architect,” architectural, or interior design services.328  Additionally, the bank 
statements supplied as part of her application did not show financial transactions matching these 
income claims.329  
 
As part of another PPP loan application submitted to Capital Plus, Ms. Spencer claimed 
that her Facebook clothing design store earned over $100,000 in 2020, achieving a net profit 
margin of 80 percent.330  Ms. Spencer’s business’s purported net profit margin of over 80 percent 
is almost 12 times higher than the average online retail apparel firm331—and is particularly 
remarkable since the Facebook store has posted no activity since March of 2019.332  
Additionally, financial documents related to Ms. Spencer’s company listed the cost of goods sold 
as $11,500 and total expenses of $4,615 ($1,500 in “car and truck expenses” and $3,115 for 
rented or leased “vehicles, machinery, and equipment”)—but notably listed no costs for 
inventory or actual t-shirts.333   
 
PPP loan applications associated with Mr. Spencer also contain details of questionable 
veracity.  In supporting documentation that Mr. Spencer submitted to Prestamos based on his 
purported work as an independent contractor for Vital Card, Inc.—a company co-founded by Mr. 
Spencer which does not appear to have brought a product to market as of 2020334—Mr. Spencer 
claimed to have received $237,328 from the company in 2019.335  Yet, a second PPP loan 
application submitted by Mr. Spencer based his PPP loan on income received as a “Financial 
Transactions Processing, Reserve, and Clearinghouse Activities” contractor (possibly in 
reference to his work for Elev8 Advisors), rather than on any income from Vital Card, Inc.336   
 
In addition to the suspicious indicators in the Spencers’ own loans, a person with 
knowledge of the Spencers’ activities during the PPP informed Select Subcommittee staff on 
condition of anonymity that the Spencers instructed at least one family member who did not 
qualify for a PPP loan to submit a loan application to Blueacorn with false employment and 
income information.337  Altogether, at least 11 PPP loans (totaling nearly $200,000) that 
Blueacorn facilitated for the Spencers, their companies, and their relatives were forgiven—
including all those containing suspicious information.338  
 
The Spencers and Elev8 Advisors also earned millions from reviewing PPP loans.339  
These profits—which ultimately derived from taxpayer funds—appear to have had a significant 
impact on the Spencers’ lifestyle.  The couple made a number of large purchases shortly after the 
conclusion of the PPP.  In July 2021, they purchased a nearly 11,000 square foot hilltop mansion 
in Silverleaf, Arizona for nearly $8 million in an all-cash deal.340  Shortly thereafter, they used a 
series of real estate transactions to give ownership of the mansion to an entity called Elev8 
Holdings LLC.341  In 2021 and 2022, the Spencers acquired several luxury cars, including a 
Porsche Taycan Turbo with an MSRP of $153,600.342    
 
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Public records also show that at least 16 PPP loan application reviewers working for 
Elev8 Advisors on behalf of Blueacorn received over $150,000 in PPP loans through 
Blueacorn.343  A former Blueacorn supervisor told Select Subcommittee staff that Blueacorn and 
Elev8 Advisors had no formal controls or policies in place governing the manner by which 
employees or contractors could receive PPP loans themselves.344  According to the supervisor, 
employees of Blueacorn and Elev8 Advisors were encouraged to apply for PPP loans but were 
given no special instructions, except for being instructed to ask other team members to review 
their loans, instead of reviewing their own loans.345  Troublingly, a person with knowledge of 
Blueacorn contacted the Select Subcommittee to report that Mr. Spencer instructed members of 
his family to apply for loans through Blueacorn, despite knowing that those family members did 
not have eligible businesses.346 
 
Mr. Reis, Ms. Hockridge, or Blueacorn were involved in the issuance of nearly all of the 
PPP loans received by Mr. Spencer, Ms. Spencer, and their companies.347  Ms. Spencer and Ms. 
Hockridge discussed their efforts to secure some of these PPP loans in Slack messages obtained 
by the Select Subcommittee.348  Ms. Hockridge specifically mentioned that she and Mr. Reis 
submitted the documentation for the first round of PPP loans that the Spencers received.349  Ms. 
Hockridge also told Ms. Spencer that Mr. Spencer “wanted to restructure the deal based on how 
we submitted for 1st Round.” 350  In regard to later PPP loans obtained by the Spencers, Ms. 
Hockridge told the Blueacorn financial crime consultants that “you guys can take care of it.”351   
 
12. 
Capital Plus, Which Had Primary Responsibility for Overseeing Blueacorn Under 
PPP Program Rules, Reaped Windfall Profits While Not Conducting Sufficient 
Oversight 
 
Blueacorn partnered with Capital Plus, a small, for-profit CDFI with 34 full-time 
employees, to jointly facilitate the issuance of over half a million PPP loans.352  According to 
Capital Plus, Blueacorn was engaged to “provide[]significant identity and eligibility verification 
and fraud compliance services.”353  Blueacorn ultimately submitted a total of 521,221 loan 
applications to the SBA on Capital Plus’ behalf. 354  Capital Plus told the Select Subcommittee 
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that they “relied on Blueacorn’s technological solutions to determine borrower eligibility and 
combat fraud efficiently and at scale.”355  However, as an SBA lender, Capital Plus was required 
to “exercise[] day-to-day responsibility for evaluating, processing, closing, disbursing, servicing, 
liquidating, and litigating its SBA portfolio.”356   
 
Despite the fact that Capital Plus was responsible under SBA regulations for each PPP 
loan that it issued with Blueacorn, the lender also provided little evidence of a formal governance 
structure to monitor anti-fraud efforts or more generally conduct oversight of Blueacorn’s 
activities.357  Instead of proactively screening loans received from Blueacorn, Capital Plus told 
the Select Subcommittee that “personnel reviewed loan applications and other materials upon 
becoming aware of some indication of fraud or ineligibility.”358  Capital Plus was unable to tell 
the Select Subcommittee how many of the loan applications that it received from Blueacorn were 
given a manual review by employees of Capital Plus to verify eligibility or to identify fraud.  
Capital Plus told the Select Subcommittee:  “Capital Plus does not maintain statistics regarding 
the number of PPP loan applications that were manually reviewed by Capital Plus personnel to 
verify eligibility or to identify fraud”359 and that it “does not maintain a comprehensive log of all 
individual loan applications manually reviewed by Capital Plus personnel.”360  
 
When asked whether Capital Plus held executive or senior leadership meetings 
concerning potential, suspected, or confirmed fraud or other financial crime related to PPP loans 
or loan applications that came from Blueacorn, the lender did not provide details of any such 
meetings.  Capital Plus claimed that “senior leadership regularly discussed combating potential 
fraud related to PPP loans and applications,” but no minutes were kept of those meetings.361  
Capital Plus declined to provide briefing materials related to those meetings and it is unknown if 
any were created.362  Capital Plus similarly declined to provide total amounts budgeted for and 
spent on AML, BSA, eligibility verification, and fraud compliance during the PPP.363  However, 
Capital Plus engaged Everett Advisors, the same consultancy retained by Blueacorn, to conduct 
audits and assessments of Capital Plus’s antifraud and compliance programs.364 
 
Capital Plus also issued hundreds of thousands of dollars in loans to Blueacorn’s 
principals and their businesses.365  Capital Plus issued these loans despite the fact that 
Blueacorn’s principals were clearly named as owners or key employees in documents supporting 
loan applications.366  Ms. Giga—Capital Plus’ CFO—signed off on the loan to Mr. Reis where 
he inaccurately described himself as an African American and a veteran.367  Ms. Giga also 
attested that she had no “financial interest in the applicant” of each loan, as required by the SBA 
application.368  However, although she did not have a personal ownership interest in these 
applicants, her employer stood to profit from fees on the large quantities of loans that Blueacorn 
referred to Capital Plus through their ongoing business partnership.  Capital Plus also signed off 
on a number of other loans that appear to raise similar conflicts of interest, including loans to 
Elev8 Advisors’ principals, their businesses, and their family members.369  All of these loans 
were processed through Blueacorn itself.370  In response to inquiries by the Select Subcommittee, 
Capital Plus representatives claimed that it was “made aware” of the Blueacorn founders’ loans 
through an unidentified source sometime after they were approved, despite Ms. Giga having 
authorized the loans in the first instance.371   
 
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Despite these issues, the CEO of Capital Plus’ publicly traded parent company, 
Crossroads Systems, Inc., said in the second quarter of 2021 that “our success in the [PPP] has 
put us into the best position we have ever been in.”372  As of the end of the PPP in May 2021, 
Capital Plus was fourth in the SBA’s list of top lenders by number of PPP loans approved in 
2021.373  Shareholder disclosures by Capital Plus’ parent company would later describe 2021 as 
a “transformational year” for the company, in part because Capital Plus’ “[p]articipation in PPP 
resulted in total revenue from operations for the fiscal year ended October 31, 2021 of $930.6 
million compared to $36.6 million for the same period of 2020, or 2,440%.”374  The increase in 
revenue was attributable to PPP lender fees, which were paid by SBA as a percentage of PPP 
loan amounts, scaled to incentivize lenders to distribute smaller loans.375 
 
13. 
Blueacorn Took the Majority of SBA Processing Fees from Prestamos CDFI—Its 
Non-Profit Lending Partner  
 
Prestamos is a wholly owned subsidiary of a nonprofit organization, Chicanos Por La 
Causa (CPLC).376  At approximately $7.7 billion in loans issued, Prestamos was the third-ranked 
lender for PPP by net dollar value of loans issued in 2021, after JP Morgan Chase Bank and 
Bank of America.377  Prestamos approved nearly half a million loans in 2021, more than any of 
the other top PPP lenders for that year.378  As of late December 2019, Prestamos had provided 
“more than $50 million in loans supporting more than 400 businesses” since its formal inception 
in 2000.379  In other words, in the two decades prior to the pandemic, Prestamos likely issued less 
than one percent of the funds that it issued in 2021 as part of the PPP. 
 
Prestamos issued 925 PPP loans (worth $26 million total) in 2020 and more than 2,200 
loans in 2021 through its preexisting SBA lending platform.380  According to Prestamos, its 
employees manually reviewed each of those applications.381  Upon entering the contract with 
Blueacorn, Prestamos immediately and dramatically increased its PPP lending.  Between April 
14, 2021, and the end of round three in June 2021, Prestamos processed approximately 434,000 
loans.382 
 
Prestamos’ review process for loans issued from April to June 2021 with Blueacorn was 
less intensive than the process for loans it directly issued before partnering with Blueacorn.  
Prestamos told the Select Subcommittee that it primarily conducted oversight of the loans 
processed by “spot-check[ing] certain loans” at random but that  this “QC effort” did not involve 
“digging into every file.”383  Prestamos said that these spot checks were “not formally logged or 
documented as they occurred.”384  Prestamos informed the Select Subcommittee that it would 
reject an application received by Blueacorn “only if a flag arose,” including loans flagged by the 
SBA or a bank receiving the funds.385  Prestamos also did not conduct hands-on oversight of 
Blueacorn’s anti-fraud systems.  When asked whether Prestamos gave direction to Blueacorn as 
to how to do fraud checks or directed the fintech to change their processes in any way, 
Prestamos’ CEO stated: “No, we didn’t spend a lot of time on the front end to try to understand 
what they were doing to prevent or eliminate any fraud.”386   
 
In a briefing with Select Subcommittee staff, Prestamos’ President acknowledged that the 
CDFI was “not prepared for all the applications we received” during the PPP387 and said that the 
nonprofit knowingly took on a role larger than it had been prepared to handle because they saw a 
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limited number of PPP funds going to underserved communities and believed that Blueacorn 
could help them serve those communities without compromising program requirements: 
“[W]e’re looking at it from the mission perspective, of:  Who else is going to serve the rest of the 
country?  Nobody else was doing it the way we were.”388   
 
C. 
Womply’s PPP Fraud Screenings Failed to Prevent “Rampant Fraud”—and 
Were Accompanied by Questionable Business Practices—Despite Generating 
Over a Billion Dollars in Profits 
 
Multiple high volume PPP lenders relied on Womply to review PPP applications for 
eligibility and potential fraud, even though the fintech lacked prior experience in conducting high 
volume small business lending, managing large scale financial crime compliance, or creating 
scalable automated fraud prevention technology.   
 
Communications obtained by the Select Subcommittee show that some of Womply’s 
partners—who collectively issued over $16 billion in PPP loans in 2021—accused the fintech of 
referring to them hundreds of thousands of PPP applications containing “rampant fraud.”389  
Throughout the PPP, many of Womply’s closest business partners questioned its fraud 
prevention capabilities—in one case describing the fintech’s technological systems as “put 
together with duct tape and gum.”390   
 
This ad hoc system resulted in Womply referring applications with “obvious[ly] 
fraudulent” supporting documentation and led the fintech to become one of the “paths of least 
resistance” for those looking to commit PPP fraud.391    
 
1. 
Lenders Paid Womply $2 Billion in SBA Processing Fees to Review PPP 
Applications for Fraud and Verify Applicant Eligibility  
 
Womply, also known as Oto Analytics, Inc., was founded in 2011 as a provider of 
reputation management, email marketing, and business intelligence services for small 
businesses.392  Womply’s leadership team, led by Founder and CEO Toby Scammell and Co-
Founder and President Cory Capoccia, were deeply involved in all aspects of the fintech’s 
operations during the PPP.393   
 
The fintech—which had never before involved itself in loan processing or high volume 
fraud prevention screening—began its involvement in the PPP in April 2020 as a referral 
agent.394  In this role, Womply created a website through which small businesses seeking a PPP 
loan could input their personal information that Womply would, in turn, submit to a lender.395  
Upon receipt of the referral, lenders would conduct all other tasks associated with processing, 
managing, and tracking the PPP loans, including verifying borrower identity and auditing 
borrowers.396   
 
Womply entered into referral agent agreements with ten lenders or platforms and 
ultimately referred approximately 7,000 PPP loans totaling $360 million in taxpayer dollars 
while acting as a referral agent.  The average amount of these loans was approximately 
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$52,000.397  In 2020, Womply received just under $3 million from lenders for its referral 
services.398 
 
Beginning in February 2021, Womply initiated a “PPP Fast Lane” service, which it 
claimed would provide PPP lenders with technological, marketing, underwriting, pre-
qualification review, eligibility verification, and other services.399  PPP lenders Harvest Small 
Business Finance, LLC (“Harvest”), Benworth Capital Partners, LLC (“Benworth”), 
Fountainhead SBF LLC (“Fountainhead”), DreamSpring, and the Sunshine State Economic 
Development Corporation used Womply’s PPP Fast Lane service.400  These five PPP lenders, to 
whom Womply provided both referral and LSP services, collectively issued over a million PPP 
loans (totaling more than $16 billion) in 2021.401    
 
In a presentation to Select Subcommittee staff, Womply explained that, as part of its new 
PPP Fast Lane service, the fintech’s staff (1) conducted automated eligibility checks; (2) 
identified and verified their PPP borrowers’ identities through automated and manual KYC 
management; (3) conducted automated and manual bank and tax document analysis to confirm 
PPP program eligibility; and (4) implemented automated and manual anti-fraud tools and 
measures to detect application fraud, in service of BSA requirements.402  Applicants that passed 
Womply’s pre-qualification reviews were then forwarded to one of its partner lenders.  
According to information obtained by the Select Subcommittee, PPP loan applicants submitted a 
total of over 3.7 million applications in 2021 through Womply, with most likely going through 
their PPP Fast Lane program.403  Of that 3.7 million, 70 percent, or 2.58 million applications, 
were sent to lenders after passing Womply’s pre-qualification reviews and underwriting 
processes.404 
 
In March 2021 alone, Womply referred 889,275 PPP loan applications to lenders.405  In 
April 2021, Womply’s busiest month, the fintech referred over 1.2 million PPP loan applications 
to lenders.406  In just one week of that month, the fintech reviewed, processed, and referred over 
375,000 PPP loan applications.407  Ultimately, over 1.3 million PPP loans that went through 
Womply—out of the 2.58 million that Womply referred to lenders—were funded.408  By the end 
of the program, Womply reviewed and referred approximately $16 billion in taxpayer dollar-
funded PPP loans.409  Womply claimed that the services it provided were “crucial to the success” 
of the PPP.410   
 
Womply’s lending partners that participated in its PPP Fast Lane program told the Select 
Subcommittee that they relied on the fintech to weed out ineligible and fraudulent PPP 
applicants.  Harvest—which was referred more than 800,000 PPP loan applications by 
Womply—told the Select Subcommittee that “Womply assured Harvest that it would only refer 
to Harvest complete applications that Womply’s platform had confirmed were for eligible 
borrowers.”411  In a conversation with Select Subcommittee staff, Harvest’s Managing Director 
and Chief Operating Officer Adam Seery said that Harvest understood that “Womply’s system 
had checkmarks that would check every part of eligibility requirements.  At the point when [the 
PPP application] came to us, the loan should be ready to go.”412   
 
Womply lending partner Fountainhead told the Select Subcommittee that Womply was a 
“super loan agent” that it believed had the ability to “use some technology to do a lot of the KYC 
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and AML type mechanisms that were clearly spelled out as part of PPP guidelines.”413  
Similarly, Womply lender Benworth, which received over 400,000 PPP applications from 
Womply, also relied on the fintech to review PPP loan applications.414  According to Benworth, 
“Womply handled eligibility verification and fraud prevention in connection with hundreds of 
thousands of PPP applications referred to Benworth by Womply.”415  Benworth told the Select 
Subcommittee that the “key service” that Womply provided was “verifying—on the basis of 
such information and documents—[a PPP] applicant’s eligibility for a PPP loan” and that a 
“primary reason why Benworth contracted with Womply was [PPP] Fast Lane and its ability to 
identify ineligible applicants and stop fraud.”416  Benworth also told the Select Subcommittee 
that it relied on Womply to prevent fraud related to identity theft and the use of fake documents 
by using its systems to validate a PPP applicant’s identity, authenticity, and type of documents 
submitted, calculations for the PPP loan amount, and bank account information, among other 
underwriting services.417   
 
Agreements between Womply and its lending partners obtained by the Select 
Subcommittee reveal that Womply often took at least half—and in some cases up to 90 
percent—of all the taxpayer-funded fees allocated to lenders by SBA to compensate it for 
processing PPP loans.418  Under these agreements, Womply was entitled to fees both for 
referring applicants to PPP lenders and for providing its PPP Fast Lane pre-qualification review, 
eligibility verification, and fraud detection services.419  According to Womply, the vast majority 
of its revenue—$1.9 billion in 2021—was “PPP Technology Service Revenue” from the PPP 
Fast Lane.420  Additionally, multiple Womply contracts contain provisions that imposed “Under-
Funding Fees” that required lenders to pay Womply additional funds as a penalty for failing to 
fund a certain value of PPP loans in a calendar week.421   
 
2. 
As Womply Pushed Lenders to Fund as Many PPP Loans as Possible, Its PPP 
Lending Partners Observed That the Company Had Poor Processes and Was 
Approving a Large Number of Seemingly Fraudulent Applications  
 
a. 
Womply’s PPP Lending Partners Expressed Concern About the Quality of the 
Company’s Fraud Screenings, with One PPP Lender Accusing Womply of 
Referring PPP Loan Applications with Missing Documents and “Obvious 
Fraudulent Information”  
 
In a conversation with Select Subcommittee staff, the CEO of Fountainhead—one of 
Womply’s major lending partners—described the PPP Fast Lane as “kind of put together with 
duct tape and gum.”422  The lender said that, despite Womply having developed the system 
specifically to process PPP loans, “I don’t think [Womply’s] system was built to handle the 
workload it was put under” and that “there were always problems with their system in terms of 
tech glitches.”423 
 
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Womply lending partner DreamSpring also expressed concern about Womply’s pre-
qualification review capabilities and repeatedly stated that the fintech was referring obviously 
fraudulent PPP applications.  In a March 20, 2021 email, DreamSpring’s Chief Lending and 
Client Experience Officer notified Womply that some of the applications that the fintech referred 
to the lender, mostly from Florida, had “a bunch of fraud.”424  In a March 30 email to Mr. 
Capoccia, DreamSpring’s Chief Operations and Innovation Officer told Womply that the fintech 
had referred PPP applications containing “[t]ax returns with obvious fraudulent information.”425  
DreamSpring also told Womply that the fintech had referred “[applications] with no [t]ax return 
attached” as required. 426  In the same email, DreamSpring’s Chief Operations and Innovation 
Officer stated that the company was “still seeing some important issues come up during our 
review” of the PPP applications referred by Womply and that the lender wanted to have a 
discussion with Womply to “see how [we] can work together to mitigate the risk of receiving 
more volume with errors…”427  In a March 31 email, DreamSpring told Mr. Capoccia that “we 
need to address [these errors] asap.”428   
 
On April 13, 2021, Mr. Capoccia pressed DreamSpring to fund more PPP loans.  Mr. 
Capoccia asked DreamSpring’s Chief Operations and Innovation Officer by email if the lender 
would “increase your daily [PPP] funding amounts closer to the $20m/day that we originally 
discussed a while back?” 429  In response, DreamSpring’s Chief Operations and Innovation 
Officer again stated that Womply was sending the lender ineligible and likely fraudulent loans: 
 
 
Yes we can but are having difficulty doing so because we continue to find applications 
that ARE NOT eligible to fund.  As you know, we are fully responsible and hold all the 
risk associated to the loans. To answer your question, the only way we can get there is if 
we can be reassured that everything in our pipeline is completely eligible.430 
 
In that email, DreamSpring informed Womply that it would “be providing a list of 
DUPLICATE names/apps, from a very small sample, we have just found today which are 
evidently fraudulent loans” as evidence of the large amount of ineligible loans that the lender 
was receiving from Womply.431  In the same email, DreamSpring’s Chief Operations and 
Innovation Officer described the impact that their referral of “evidently fraudulent loans” had on 
the lender’s operations and explained that failures in Womply’s screening processes, which were 
still occurring in mid-April 2021, slowed down the funding of PPP loans: 
 
All of this prompts us to review larger samples of the loans Womply is providing and 
thus slows down our process.  I am sure you understand that impedes us from funding 
loans blindly in large volumes. I hope you understand and we will continue to fund on a 
daily basis as much as we can while we mitigate potential risks to DreamSpring.  
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Everything that is eligible in the pipeline will get funded. The $20m was based on the 
assumption that we would not be having to review larger and larger samples of 
applications.432 
 
The CEO of PPP lender Lendistry—a fintech which itself issued over $4.7 billion in PPP 
loans in 2021—also expressed concerns to Womply and its lending partner Harvest regarding 
their fraud prevention and screening processes and asked for details on the companies’ fraud 
mitigation processes.  On June 8, 2021, Lendistry’s CEO emailed Mr. Scammell and Harvest’s 
Mr. Seery: 
 
We have noticed a meaningful increase in the number of third-party and other inquiries 
related to fraud associated with applicants coming through Harvest.  Can you confirm 
that your team is focused on making sure these issues are resolved and provide us with a 
written summary or other documentation of your team’s fraud mitigation processes?433 
 
Mr. Seery, adding Mr. Capoccia to the email chain, responded by asking for “specific examples 
of what you are seeing on your end” and stated that he would “connect with Womply and our 
accounting team to review and investigate.”434 
 
b. 
Benworth—Womply’s Second Largest PPP Lending Partner—Criticized the 
Fintech for Referring Applications with “Rampant Fraud”  
 
The Select Subcommittee obtained a series of May 2021 emails between Womply and 
Benworth, the fintech’s second-largest PPP lending partner, in which Benworth’s senior 
leadership expressed serious concerns about Womply’s fraud prevention and eligibility 
verification program capabilities.435  These emails show that, in late April and early May 2021, 
Womply discovered what Benworth described as “rampant fraud” in the over 200,000 PPP loan 
applications Womply had referred to Benworth.436  Subsequently, Benworth became concerned 
that Womply’s application screening processes were inadequate and had exposed it to “a 
dangerous amount of liability.”437  On May 10, 2021, Benworth’s CEO wrote to Mr. Scammell 
and Mr. Capoccia: 
 
Over the last several days, it has become clear that the services promised by Womply, 
have not only not been provided, but have also placed our company in a very bad 
predicament due to the high likelihood of fraud involved in many of the referred loans 
from your company.  We relied on the promises and representations made by Womply, as 
to the validity and legality of the referred loans, when we entered into the agreement, yet 
it has become clear…that Womply is unable to perform as agreed to.438 
 
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Benworth wrote that banks involved in disbursing PPP loans referred by Womply had 
previously voiced concerns about the high incidence of fraud in Womply-reviewed loans.439  On 
May 7, 2021, Benworth’s CEO wrote to Mr. Scammell and Mr. Capoccia:  “We are managing 
our banking relationship very closely because they are anxious with the amount of fraud they are 
seeing.  Bluntly stated, we have been on the brink of being closed 3 times.”440  Benworth’s CEO 
told Mr. Scammell:  “I have given our bank assurances that we have every protocol in place to 
mitigate fraud.  Now it seems that may not be the case.”441   
 
In a May 10, 2021 email, Benworth’s CEO alleged that Womply had “misrepresented 
(either willfully or negligently) its ability to perform [PPP application review services]” and had 
improperly excluded Benworth from the fintech’s communications with the SBA and SBA OIG 
concerning fraud.442  Prior to that, on May 7, 2021, Benworth’s CEO wrote: 
 
What happened to the systems you had in place that you were so quick to remind me of 
yesterday?  Are they no longer good enough?  Have the services provided and promised 
by Womply not as reliable as had been promised therefore requiring changes?  Should we 
be worried about the 200,000 loans already funded through the use of your Company’s 
systems?443 
 
In an earlier email to Benworth, dated April 8, 2021, Womply proposed changes to its 
pre-qualification, fraud prevention, and other screening processes to better address fraud.444  
Those changes included increased manual reviews and sending an email to PPP applicants 
stating that “they should not attempt to commit fraud through [Womply].”445  Womply told 
Benworth that such a warning would “minimize casual fraud.”446  However, in a May 10 
response, Benworth’s CEO characterized Womply’s new proposed fraud review process as 
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“unproven” and “last minute,”447 and pointed out that these changes would not detect fraud in the 
200,000 loans that Womply had already referred to the lender.448   
 
In a letter to the Select Subcommittee, Benworth stated that it had multiple concerns with 
Womply’s performance, and had “many discussions” with Womply about the fintech’s 
performance.449  For example, Benworth discovered documentation errors, and “[i]n the final 
weeks of PPP, Benworth discovered that Womply was not providing Benworth with the 
applicants’ supporting documents in many of the packages being submitted.”450  Benworth 
further stated that its concerns with Womply’s performance grew towards the end of the PPP as 
“Benworth also started receiving complaints—and even some subpoenas—relating to loans 
referred by Womply.”451  Benworth’s CEO had earlier warned Womply that the fintech’s 
activities left both companies exposed to criticism or penalty after the PPP ended, cautioning, 
“When the party is over and the lights turn on, we [Benworth] will be the only ones at the party 
(and it seems standing naked).”452  
 
3. 
Womply’s CEO Has a History of Unethical Behavior, Including a Conviction for 
Criminal Fraud That May Have Warranted His Exclusion from SBA Programs, 
Including the PPP 
 
The SBA may prohibit entities from participating in its 7(a) lending program due to a 
history of unethical or illegal conduct—including debarments and prior convictions for fraud.453  
Mr. Scammell—who served as Womply’s CEO and ran its fraud prevention operations—was 
previously convicted of financial crime and barred from the securities industry.454  Despite this, 
Mr. Scammell’s company was allowed to oversee the distribution of billions of dollars of 
taxpayer funds, with Mr. Scammell serving as the highest ranking Womply executive that had 
“responsibilities related to the KYC process and anti-fraud measures implemented by Womply 
for the Fast Lane Program.”455   
 
In 2009, Scammell was charged with stealing proprietary and confidential information 
from his girlfriend related to a potential merger between Disney and Marvel Entertainment, and 
trading on that information using bank accounts belonging to his brother.456  On August 11, 
2011, the SEC filed a civil action alleging that Mr. Scammell engaged in unlawful insider trading 
through that conduct.457  On June 15, 2012, Scammell consented to the entry of a permanent 
injunction prohibiting him from participating in the securities industry.458  On April 21, 2014, in 
a parallel criminal case, Mr. Scammell pleaded guilty to “‘knowingly and with intent to defraud’ 
engag[ing] in a fraudulent scheme” related to insider trading and was sentenced to three months 
of imprisonment and $120,000 in restitution, in addition to the $801,000 he was to pay under a 
civil settlement with the SEC.459   
 
In its opinion regarding the case, the SEC noted “the high degree of scienter involved in 
[Mr. Scammell’s] offense and his intentional acts of concealment,” and concluded that “there is a 
significant risk that, given the opportunity, he would commit further misconduct in the future.”460  
Further, the SEC determined that “Scammell’s misappropriation of material, nonpublic 
information for his own personal benefit and profit demonstrates that he is unfit to take on such 
heightened responsibilities in any capacity in the securities industry.”461   
 
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The SEC stated that Mr. Scammell provided misleading information regarding Womply 
in the course of their 2011 investigation, noting that Mr. Scammell “tried to impede the [SEC’s] 
investigation through a lack of candor in responding to the staff’s questions,” and that Mr. 
Scammell continued his dishonest behavior even after his civil and criminal punishments. 462  
The SEC wrote that, “[d]espite Scammell’s consent to an injunction, it is questionable whether 
he has learned anything or has been ‘chastened and deterred’ as a result of his prior conduct.”463   
 
The SEC also observed that “Scammell’s financial condition is [] closely tied to the 
financial condition of Oto Analytics and Womply” and accused Mr. Scammell of lying to federal 
regulators about Womply’s financial condition in an attempt to frustrate government’s efforts to 
determine the appropriate amount of monetary relief owed in the underlying civil injunctive 
action.464  Additionally, according to the SEC, Mr. Scammell also improperly used Womply 
investor funds for his personal legal defense.465  
 
Mr. Scammel’s criminal history may have constituted good cause for the SBA to revoke 
or suspend Womply and Mr. Scammell’s privilege to conduct business with the SBA.  Rules 
contained in 13 C.F.R. § 103.4(f) allow the SBA to revoke the right to participate in SBA 
programs any entity found to be “engaging in any conduct indicating a lack of business integrity 
or business honesty, including debarment, criminal conviction, or civil judgment within the last 
seven years for fraud, embezzlement, theft, forgery, bribery, falsification or destruction of 
records, false statements, conspiracy, receiving stolen property, false claims, or obstruction of 
justice.”466  Mr. Scammell’s permanent injunction prohibiting him from participating in the 
securities industry and criminal conviction may have also constituted good cause to disallow 
Womply from participating in SBA 7(a) programs in 2020 and 2021.   
 
4. 
On Multiple Occasions, Womply Resisted Providing Information to Support SBA 
OIG Investigations into Pandemic Relief Fraud and Was Criticized by the SBA 
OIG and the SBA for Its Behavior 
 
Despite purportedly working on the PPP program in an effort to help the federal 
government provide relief to American small businesses, Womply declined requests to help the 
federal government prevent fraud in the program and ensure that loans were going to only 
eligible Americans.  Beginning in May 2021, Fountainhead—which was the lender of record for 
a group of Womply-referred PPP loans under investigation—and the SBA OIG repeatedly 
requested that Womply provide information to aid the SBA OIG in an investigation into potential 
fraud related to those loans.467  According to internal emails provided to the Select 
Subcommittee, Womply declined to provide this information for at least two months.  Mr. 
Scammell (copying Mr. Capoccia) wrote to Fountainhead and the SBA OIG to state that the 
company would not comply with the SBA OIG’s requests.468 
 
A month after its initial request for PPP loan applicant data, an SBA OIG official emailed 
Fountainhead stating:  “Can you please make the below request to Womply again?” and stated 
that “Womply should be providing this information to it’s [sic] lenders…”469  Fountainhead, 
following the SBA OIG’s direction, again pleaded with Womply for this information, writing on 
June 10, 2021, “[w]e are dependent on Womply for the research data being requested by the U.S. 
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Small Business Administration, which is being requested so that the SBA can investigate 
potential fraudulent loan activity carried out by PPP borrowers.”470 
 
 
 
 
Despite this plea, that same day, Mr. Scammell responded to Fountainhead and the SBA 
OIG and declined their request for information to aid the SBA OIG’s PPP fraud investigation.  In 
that email, Mr. Scammell stated that Womply would not “agree to undertake the substantial work 
involved in researching and packaging the requesting information” unless Womply was paid 
additional money “pursuant to a new contract [that] would be subject to our a la carte list of 
technology service fees for research requests.”471   
 
Mr. Scammell, on behalf of Womply, also stated that the fintech would not provide the 
requested information to aid the SBA OIG investigation because “Womply is not interested in 
contracting with Fountainhead for such purposes.”  Womply claimed that it was not obligated to 
assist in the SBA OIG investigation because “Womply is not a lender—it is a technology 
provider with no existing contractual relationship with either SBA or Fountainhead.” 472  
Womply even claimed that it was “inappropriate for Fountainhead to direct SBA OIG 
information requests to Womply.”473 
 
Mr. Scammell’s refusal on Womply’s behalf to assist in the SBA OIG investigation drew 
a response from both Fountainhead and the SBA.  One day later, Fountainhead’s COO responded 
to Mr. Scammell, arguing:  “The status of Fountainhead’s relationship with Womply should not 
have any impact on the OIG agents’ requests, which were initially forwarded to [Mr. Capoccia] 
over a month ago.”474  On June 16, 2021, the SBA again requested information from 
Fountainhead regarding two loan files.  In response, Fountainhead’s COO directed the SBA 
request to Womply’s “Contact Us” page and suggested that the SBA may need to subpoena 
Womply for the information.475  A senior litigation counsel for the SBA contacted Mr. Scammell 
directly in response, asking “What is going on here?”476  In her email to Mr. Scammell, she 
described the importance of Womply providing the files and the impact that the fintech’s 
resistance to doing so would have on fraud prosecutions and innocent borrowers:  
 
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[I]t appears [that Fountainhead] are unclear as to whether they can obtain PPP files from 
Womply.  This is unacceptable.  I have dozens of both active fraud cases that need to be 
either referred to the IG/DOJ or cleared so that borrower loans can be forgiven.  SBA and 
borrowers will be harmed if Fountainhead and/or Womply cannot provide assurances that 
the Agency will have timely and continually access to PPP loan documentation… 
 
Please confirm that Womply will assist Fountainhead in complying with SBA file 
requests in a timely fashion.  And of course, please confirm that Womply is not requiring 
SBA to issue subpoenas for PPP files.477 
 
 
 
In a conversation with Select Subcommittee staff, Fountainhead confirmed that the lender 
had “difficulties getting complete loan files out of Womply” in response to requests from federal 
investigators.478  Fountainhead said that the lender was forced to get “a temporary restraining 
order against [Womply], so they can’t destroy these [PPP loan] documents.”479 
 
Womply also resisted providing data to Benworth to assist an SBA OIG investigation.  
On April 27, 2021, an SBA OIG official requested from Benworth electronic copies of loan files 
and IP address information related to a PPP borrower in connection with an investigation.480  
Benworth provided the loan files but informed the SBA OIG official that Womply held the 
requested IP address information.481  On May 17 the SBA OIG requested these files directly 
from Womply.482  Womply declined to provide the information to Benworth and directed the 
SBA OIG to fill out a web form on the “Contact Us” section of Womply’s website.483 
 
In response to Womply’s refusal to provide the information to Benworth, an SBA OIG 
official wrote directly to Mr. Scammell stating that “Womply should be providing the lender the 
related loan information for any related loans associated with the requesting lender” and making 
clear to Womply that their response was “not acceptable protocol for SBA / SBA OIG when a 
request was made to an SBA Lender.”484  By June 17, 2021, Womply still had not provided the 
information that the SBA OIG requested.485 
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Separately, on June 11, 2021, the SBA formally warned Womply that the fintech was 
potentially engaged in “unlawful or unethical activity” related to its acceptance of PPP loan 
applications after the PPP deadline and described information on Womply’s home page as 
“misleading.”486  Specifically, Womply’s website indicated that the fintech was still accepting 
PPP applications although the PPP had ended weeks earlier.487  The SBA warned Womply that 
the fintech had “currently no authority…to accept PPP applications” and warned that Womply 
should not be “accepting PPP loan applications, charging applicants fees for submitting PPP loan 
applications (if applicable), or collecting personal information from applicants.”488  The SBA 
wrote:  “Womply’s continued acceptance of PPP applications may constitute unlawful or 
unethical activity as provided for in 13 CFR part 103, et seq.” 489 
 
5. 
Lenders and SBA OIG Officials Accused Womply of Leveraging Its Close 
Connection with the Trump Administration’s SBA to Convince Lenders of Its 
Reliability 
 
Harvest’s Adam Seery told Select Subcommittee staff that he was under the impression 
that Womply “had their own direct tie ins to the SBA and Treasury” and that “one of the big 
reasons we decided to partner with [Womply] was because of the interaction they were having 
directly both with Treasury and SBA.”490  SBA rules warn that entities that claim or imply 
special connection to SBA officials may be engaged in unethical behavior.491  According to 
Harvest, “Womply, both to Harvest and publicly, represented it was capable of performing this 
service because of its close association with the SBA.”492  Harvest also noted that “Womply 
indicated that it was working directly with Bill Briggs, head of the Paycheck Protection Program 
at the SBA [during the Trump Administration], to ensure the [PPP Fast Lane] program was 
meeting all of the SBA’s requirements.”493   
 
In early 2021, Mr. Scammell and Mr. Briggs hosted an online seminar on the PPP.  In 
one Facebook ad, Womply said, “We teamed up with Bill Briggs from the Small Business 
Administration” to “answer your PPP burning questions.”494  Mr. Scammell also texted Mr. 
Briggs directly.  In a text message obtained by the Select Subcommittee, Mr. Scammell asked 
Mr. Briggs if he would participate in “two more high profile livestreams next week: one on 
Instagram and the other on LinkedIn” and speculated that he could “get hundreds of thousands of 
viewers.”495  
 
 
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Figure 5:  Womply CEO Toby Scammell in a joint virtual appearance with Trump Administration 
 
SBA Official Bill Briggs. 
 
 An SBA OIG staff member told the Select Subcommittee that they first became aware of 
Womply because “we were starting to get a lot of contacts from financial institutions who were 
starting to get [PPP loan payments] into people’s personal bank accounts for people they knew 
did not own their own business and a lot of returned funds were [originated by lenders] using 
these companies BA [Blueacorn] and Womply.”496  In a briefing with the Select Subcommittee, 
an SBA OIG staff member said that Mr. Scammell was “trying to position himself to utilize his 
communications with SBA and SBA OIG” as “propaganda to get more lenders to partner with 
Womply.”497  According to SBA OIG staff, Mr. Scammell also appeared to have misrepresented 
his relationship to the SBA and SBA OIG:  “I’d talk to lenders and they’d say [Scammell] says 
he’s coordinating with SBA.  I’d say ‘I’ve seen that communication and that’s not what’s 
happening.’”498  When asked about the usefulness of the information that Mr. Scammel provided 
regarding potential fraud, the SBA OIG staff told the Select Subcommittee:  “I can’t say for 
certain that the stuff Womply sent over was specifically utilized.”499 
 
The SBA OIG staff recalled that, in April 2021 conversations between the SBA OIG, 
Harvest, and Fountainhead, “Womply said [to their lenders] they had spoken to SBA about what 
they were doing and what they are doing is appropriate for the program,”500 and that Womply 
“was selling propaganda to the lenders claiming [Mr. Scammell] had communications with SBA, 
or OIG, or other law enforcement saying that what was happening in his programs was catching 
the fraud.”501  Although senior Trump Administration officials collaborated with Womply on 
outreach efforts, Biden Administration officials had a different interaction with Mr. Scammell.  
A Biden Administration SBA official told the Select Subcommittee that Mr. Scammell “was 
hoping to get support from SBA to build new contractual relationships with other lenders and 
certainly that’s not what we do.  We just listened and took notes.  I wouldn’t say we used any of 
the information he provided.”502   
 
6. 
Despite Windfall Company and Owner Profits, Womply and Its Executives 
Received Millions of Dollars’ Worth of Taxpayer-Funded PPP Loans  
 
According to internal company financial information obtained by the Select 
Subcommittee, in 2021, Womply’s total net revenue was $2.09 billion, gross profit of $1.8 
billion, constituting an 87.6 percent profit margin.503  This financial information shows that 
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Womply’s operating expenses were $160 million and “other income expenses” were $379 
million.504  Womply’s total net income was over $1.3 billion.505  By contrast, in the last pre-
pandemic year for which the Select Subcommittee has figures, Womply was unprofitable, losing 
$11 million.506  
 
Despite this windfall, Womply, using the name Oto Analytics, Inc., was approved to 
receive $5.1 million in PPP loans from taxpayers.507  Mr. Capoccia, in his role as Womply’s 
President, signed the application for the fintech’s 2020 PPP loan.508  In a potential conflict of 
interest, these PPP loans were approved by Harvest, the entity that would become Womply’s 
most important PPP business partner.509  In Womply’s second PPP loan, received shortly before 
it began working on the PPP, Mr. Scammell and Mr. Capoccia corresponded directly with 
Harvest senior executives, including close business partner and Harvest Managing Director 
Adam Seery, in securing the multi-million-dollar loan for Womply.510  Womply’s second loan 
was for $1,999,997, just three dollars below the threshold for receiving heightened scrutiny by 
the Treasury Department, which had announced in May 2020 that it would not audit PPP loans 
under $2 million.511   
 
On August 19, 2021, Mr. Scammell signed Womply’s PPP Loan Forgiveness Application 
Form for its first PPP loan.512  On September 10, 2021, he signed the company’s PPP Loan 
Forgiveness Application Form for the second PPP loan.513  On September 1, 2022, the SBA 
informed Harvest that both of the PPP loans it had approved for Womply were denied 
forgiveness.514  According to the SBA Denial Justification letter obtained by the Select 
Subcommittee, both loans issued to Womply and approved by Harvest were later determined to 
have been ineligible.  In a letter to Harvest, the SBA explained that it “determined that [Womply] 
was ineligible for the PPP loan amount” that it received in the first draw.515   
 
The SBA further “conclude[d] that the documentation provided [by Womply was] 
insufficient to support forgiveness” and noted that “[m]ultiple requests were made for 
documentation to determine eligibility and not all requested information were provided.”516  The 
SBA further noted that, by virtue of Womply being ineligible for its first draw PPP loan, the 
company was also ineligible for the second draw PPP loan.517  As such, the SBA is now 
requiring that Womply pay back the PPP loans that it received, in full.518 
 
 
Figure 6: Loans Received by Mr. Scammell, Mr. Capoccia, and Womply (d/b/a Oto Analytics).519 
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Womply declined to disclose to the Select Subcommittee full details of its ownership 
structure, including the percentage of the company that Mr. Scammell and Mr. Capoccia 
owned.520  However, according to a PPP application submitted by Womply to Harvest, as of 
2020, Mr. Scammell owned 18 percent of Womply, and Mr. Capoccia owned five percent.521  
Based on the ownership percentages presented in Womply’s PPP application, Mr. Scammell may 
be entitled to as much as $324 million of the taxpayer funds paid to Womply for its involvement 
with the PPP, and Mr. Capoccia may be entitled to take $90 million, assuming a $1.8 billion 
gross profit.   
 
Womply owners Mr. Scammell and Mr. Capoccia also received separate PPP loans for 
themselves or their other companies.  Mr. Scammell received a PPP loan for himself through his 
single member limited liability company, Chasm LLC.522  Mr. Capoccia also received two 
personal PPP loans through Womply’s partners with at least one facilitated by Womply.523  
Despite receiving over $400,000 in salary from Womply, including a nearly $160,000 bonus and 
up to $324 million in profits, in 2021, Mr. Scammell received taxpayer forgiveness for his PPP 
loan.524  Mr. Capoccia received forgiveness for his loans despite receiving over $400,000 in 
salary in 2020, including $150,000 bonus and potentially millions in additional profits.525   
 
The Select Subcommittee offered Mr. Scammell and Mr. Capoccia an opportunity to 
speak directly with the Select Subcommittee to discuss potential waste, fraud, and abuse in the 
PPP.526  Both Womply executives declined.  Mr. Scammell, through his counsel, told the Select 
Subcommittee that he was unavailable to speak to the Select Subcommittee, either in person or 
virtually, at any time this summer, because he was in Europe.527   
 
7. 
Womply May Have Given the Sensitive Personal Information and Private 
Business Data of Millions of PPP Applicants to Its New Business to Market and 
Sell Additional New Products to PPP Loan Recipients   
  
Mr. Scammell, Mr. Capoccia, and other Womply executives founded Solo Global, Inc. in 
2022, after their work on the PPP concluded.528  The company, for which Mr. Scammell serves 
as President, markets a mobile application and other financial and marketing services to small 
businesses.529  On May 20, 2022, Womply updated its privacy policy to notify PPP applicants 
who had previously applied for PPP loans through Womply that Womply’s (retroactively) 
updated terms gave Solo Global, Inc. the right to use the personal data of PPP loan applicants for 
its own purposes, “including, but not limited to, improving their products and services and 
marketing their products and services to you.”530  This change gave Mr. Scammell, Mr. 
Capoccia, and their new business access to “over 2 [million] tax documents, over 1.5 [million] 
bank accounts from applicants, and over 1 [million] completions of various KYC/CIP/KBA 
inquiries,” from small businesses and sole proprietors who had used Womply to apply for federal 
relief benefits.531 
 
In their privacy policy update, Womply notified PPP applicants that the fintech would 
share their names, email addresses, phone numbers, bank account numbers, full credit card 
numbers, IP addresses, geolocation data, tax return details, social security numbers, income and 
wage information, information about bank account balances (including current and available 
balance), and professional information (including information about a PPP applicant’s 
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employer), among other highly sensitive information to their new for-profit business venture.532  
As a result, the sensitive personal and business data of anyone who applied for a PPP loan 
through Womply is now available to Solo Global, Inc. and can be used to further Mr. Scammell 
and Mr. Capoccia’s business interests. 
 
Personal information submitted to government agencies, including the SBA, is typically 
protected by the Privacy Act of 1974, which places limitations on federal agencies’ use and 
disclosure of data on individuals that is controlled by federal agencies.533  However, although the 
SBA’s application form for PPP borrowers cited Privacy Act protections for borrowers,534 the 
Privacy Act may not have applied to private entities such as fintechs where they were neither 
supervised by the SBA nor contractually obligated via government contracts to comply with the 
Act.535 
 
The Select Subcommittee asked Womply for details as to how PPP applicant information 
was being used.  In response, the fintech referred the Select Subcommittee to its May 20, 2022, 
privacy policy,536 and declined to answer questions regarding what PPP information was given to 
Solo Global, Inc. and how the new company was using or intended to use the sensitive personal 
information of over a million pandemic relief applicants.   
 
8. 
Womply Claimed to Be a “Technological Service Provider” to Avoid 
Accountability for Its PPP Actions, Despite Likely Meeting the Definition of an 
LSP 
 
Womply has described itself as a “technology service provider,” despite performing 
functions usually associated with LSPs, and has used its purported status to avoid accountability.  
Evidence obtained by the Select Subcommittee indicates that Womply likely should have been 
considered an LSP and therefore been subject to SBA regulation.  While Womply did provide 
some technology services, its core functionalities appear to closely resemble the SBA’s criteria 
for an LSP.  
 
The SBA defines an LSP as an entity “who carries out lender functions in originating, 
disbursing, servicing, or liquidating a specific SBA business loan or loan portfolio for 
compensation from the lender.”537  The Select Subcommittee obtained evidence showing that 
multiple PPP lenders delegated functions in originating, disbursing, and servicing loans to 
Womply.538  Further, the SBA specifically states that individuals or entities who “[p]erform any 
pre-qualification review based on SBA’s eligibility and credit criteria or the 7(a) Lender’s 
internal policies prior to submitting the Applicant’s information to the 7(a) Lender[,] or [p]rovide 
to the 7(a) Lender an underwritten application, whether through the use of technology or 
otherwise,” “meet the definition of an LSP.”539  Evidence further indicates that Womply 
independently conducted pre-qualification reviews on PPP applications based on SBA and lender 
criteria before referral to lenders.540   
 
 When SBA OIG asked for Womply’s help in an investigation into a potentially 
fraudulent loan, Womply told the SBA OIG and a lending partner that the fintech was not 
obligated to assist the investigation, asserting:  “Womply is not a lender—it is a technology 
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provider with no existing contractual relationship with either SBA or Fountainhead.  As such, it 
is inappropriate for Fountainhead to direct SBA OIG information requests to Womply.”541   
 
Womply used the same reasoning to avoid responsibility for approving fraudulent loans 
through its PPP Fast Lane service.  In a letter to the Select Subcommittee, Womply claimed that, 
as technology service provider, it was “not subject to the Bank Secrecy Act or any of its anti-
money laundering (‘AML’) program requirements” and that it was “not a Lender Service 
Provider subject to SBA regulations.”542  Had Womply been designated as an LSP, it would have 
been subject to SBA regulations and required to follow rules set forth by the SBA that governed 
LSPs, including the potential exclusion of LSPs with a criminal history of fraud, such as Mr. 
Scammell.543   
 
Womply, in a lawsuit against Capital Plus, emphasized that its status as a “technology 
service provider” meant that the company should be treated differently from lenders’ “agents” 
that provide loan application preparation and referral services.  Womply also stressed that its 
status as a “technology service provider” meant that it was not subject to any SBA caps on how 
much money the company could take in SBA processing fees.544 
 
Benworth similarly accused Womply of miscategorizing itself as a “technology service 
provider” in order to secure higher shares of taxpayer-funded fees.  According to Benworth, 
Womply, “taking advantage of its superior bargaining position,” tried to “mask[] the lender 
service provider [] relationship the companies enjoyed.”545  Benworth stated that Womply, by 
improperly categorizing itself as a “technology service provider,” was able to demand a payment 
structure that would lead to “Benworth pay[ing] Womply more than 90% of the total fee 
collected” from certain PPP loans.546  
 
9. 
Womply’s Largest Partner—Harvest Small Business Finance—Took Home 
Millions in Profits While Delegating Anti-Fraud Measures to Womply and 
Conducting Little Oversight of Their Fraud Controls 
 
Womply reviewed, processed, and referred 800,000 applications to Harvest.547  Harvest 
estimates that it ultimately submitted 600,000 of these PPP applications to the SBA.548  Prior to 
partnering with Womply, Harvest relied on a manual process to review PPP loans.549  In a 
briefing with Select Subcommittee staff, Harvest’s COO estimated that its PPP loan review 
process took approximately half an hour per loan, and that Harvest funded approximately 5,200 
loans through this process in round one of the PPP.550  After contracting for Womply’s PPP Fast 
Lane services, Harvest used Womply to review loan applications in later rounds of the PPP.551   
 
As an SBA lender, Harvest was required by SBA regulations to “exercise[] day-to-day 
responsibility for evaluating, processing, closing, disbursing, servicing, liquidating, and litigating 
its SBA portfolio.”552  These requirements existed despite Harvest’s delegation of these functions 
to Womply.  Harvest initially reviewed “a sample” of the loans Harvest was submitting, but 
ceased its manual spot-checks early in their PPP processing relationship.553  Harvest also did not 
perform any formal audits, assessments, or evaluations of Womply.554  Instead, Harvest relied on 
Womply’s assurance “that it would only refer to Harvest complete applications that Womply’s 
platform had confirmed were for eligible borrowers.”555 
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Harvest was unable to provide to the Select Subcommittee a breakdown of its total 
budgets for, and amounts allocated to, AML, BSA, eligibility verification, and fraud compliance 
in 2019, 2020, and 2021, claiming that it “did not create separate budget line items for the 
amounts allocated to the activities listed.”556  Nor do minutes obtained by the Select 
Subcommittee from meetings of Harvest’s senior leadership reflect any analysis, estimates, or 
discussions concerning the risk of PPP fraud.557  Moreover, Harvest told the Select 
Subcommittee that it did not have any logs or other documents recording any manual reviews it 
conducted of Womply loan applications and that it did not maintain records of either the number 
of Womply-referred applications that it reviewed or the number that it suspected were fraudulent 
or ineligible.558   
 
Harvest’s failure to allocate resources to fraud prevention was not for lack of funds.  
Harvest’s nearly $1.2 billion in 2021 gross receipts—earned in large part because Womply 
processed loans for Harvest at such a large scale—amounted to nearly 18 times Harvest’s gross 
receipts from 2020.559  Between 2020 and 2021, Harvest increased its operating expenses by only 
$14 million—an increase of about 40 percent on its prior operating expenses, but a 
comparatively small slice of its billion-dollar fee income.560  Harvest paid over $350 million in 
distributions directly to its owners in 2021 alone (with over $225 million going to its majority 
member, a private equity fund, and nearly $42 million going to each of Harvest’s other three 
members).561  The 2021 distributions represented more than five times the amount of Harvest’s 
entire gross receipts in the year 2020.562  Minutes from members’ meetings also show that 
Harvest’s owners discussed early in the PPP plans to pay down the majority member’s debt with 
PPP program profits.563   
 
D. 
Fintechs Such as Womply and Blueacorn Were the “Paths of Least 
Resistance” for Criminal Gangs and Fraudsters Looking for PPP Loans 
 
Fraudsters on the dark web swapped tips about how to successfully commit PPP fraud 
and identified fintechs as the “paths of least resistance,” according to an SBA OIG official who 
spoke to Select Subcommittee staff.564  Specifically, individuals looking to commit fraud 
identified Bluevine, Blueacorn, and Womply as “fintechs with lower fraud risk capabilities that 
were letting a lot more fraud go through.”565   
 
An independent fraud researcher analyzing Telegram-based fraud rings came to the same 
conclusion.  The researcher noticed “thousands and thousands of post[s] – all of them boasting 
about defrauding Womply’s PPP loan program.”566  In a May 2021 website post entitled “Is 
Womply [] Getting Whomped With PPP Fraud?”, the researcher wrote:  “Scammers were 
posting a flurry of messages about ‘Womply’ PPP loans and how easy it was for them to scam 
the service and get fraudulent loans.”567  Womply communications obtained by the Select 
Subcommittee show that the fintech knew that it was a top target for fraud.  In May 2021, Mr. 
Scammell wrote: “We’re seeing an increase in the sophistication of attacks and our team is also 
picking up significant dark web activity surrounding SBA, EIDL, PPP (including Womply and 
other technology companies).”568 
 
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Womply- and Blueacorn-facilitated PPP loans were crucial to one violent drug dealing 
enterprise in central Florida.569  Police and media reporting show that gang members allegedly 
created limited liability companies, solicited individuals through social media, and, in some 
cases, stole identities to apply for PPP loans, which were then approved.570  Investigators believe 
the PPP loans were then used to finance the criminal enterprises, including the purchase of guns 
and drugs.571  Police documents allege that the gang members quickly identified Womply and 
Blueacorn as easy targets to obtain PPP loans without much scrutiny.572   
 
In conversations intercepted by law enforcement as part of their investigation into 
narcotics trafficking, an Army Gang member spoke about the ease of using Womply to obtain 
fraudulent PPP loans.  In a phone call, the Army Gang member was recorded explaining how 
Womply works and trying to recruit others into his PPP fraud scheme.  The Army Gang member 
explained to an unidentified associate that Womply was popular with fraudsters, stating that 
“everybody in the ‘hood’” was using Womply.573 
 
 
 
In one group conversation with multiple gang members, a member of the Army Gang 
stated that he specialized in using Womply to get fraudulent PPP loans, while another gang 
member stated that he used Blueacorn for fraud.574 
 
 
 
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At one point, an Army Gang member sent a screenshot to the group chat of a successful 
deposit into a bank account related to an earlier fraudulent Womply PPP loan.  Despite using 
both Blueacorn and Womply, some members of this criminal gang preferred Womply “because it 
was quicker” at processing PPP loans.575 
 
E. 
The PPP’s Structure Did Not Incentivize Kabbage to Implement Strong 
Fraud Prevention or Develop a Robust Loan Servicing Apparatus 
 
 Before the pandemic, Kabbage was an Atlanta-based fintech with a valuation of $1.2 
billion that specialized in financing underserved small businesses and individuals.576  Founded in 
2009, Kabbage both ran its own lending operation and offered an automated platform to other 
lending businesses.577  Beginning in April 2020, Kabbage participated in the PPP through 
partnerships with banks and as a direct lender in its own right.578  Kabbage signed contracts for 
round one of the PPP to market, process, and service PPP loans for two banks, Cross River and 
Customers Bank.579  However, Kabbage has said that even at the height of its bank partnerships, 
it was the direct lender for over half of its PPP loan volume.580   
 
Kabbage facilitated over 310,000 PPP loans over the course of the PPP.581  Loans by 
Kabbage featured heavily in PPP fraud prosecutions.  An October 2020 Project on Government 
Oversight report identified Kabbage as one of the four top lenders for loans that the Justice 
Department had alleged to be fraudulent.582  A joint investigation by the Miami Herald, 
McClatchy DC, and the Anti-Corruption Data Collective also found that about 20 percent of the 
PPP loans they identified as suspicious in 2020 were approved by Kabbage.583   
 
Many Kabbage loans contained indicators of fraud at the time of application.  As noted 
below, a ProPublica report found that Kabbage sent 378 PPP loans worth $7 million to purported 
farms that were questionable on their face, including an orange grove in Minnesota and a cattle 
ranch based on a New Jersey sandbar.584  The Miami Herald reported that Kabbage facilitated a 
loan of between $350,000 and $1 million to a Florida company registered three months after the 
date that would qualify them to participate in the PPP.  They also reported that between $150,000 
and $300,000 in loans to companies in Louisiana were registered just days before making their 
loan application and operated by a borrower with delinquent SBA loans, in violation of PPP 
lending rules.585  High-profile prosecutions involving Kabbage loans—such as a May 2022 
prosecution of the actor who played the Red Power Ranger in the Mighty Morphin Power 
Rangers television and film franchise—have continued into 2022.  Prosecution documents state 
that these applications contained red flags such as business names that differed across various 
support documents for the same loan.586  
 
1. 
The Program’s Full Guaranty for Loans and Lender Payment Structure Likely 
Disincentivized Kabbage from Rigorously Rooting Out Fraud 
 
Documents obtained by the Select Subcommittee indicate that Kabbage was aware of 
weaknesses in its fraud prevention systems, but that it nevertheless reduced its primary fraud 
staff and implemented a system that confused and concerned employees and financial 
institutions.  The company’s internal communications raise questions about whether Kabbage 
approved loans with markers of potential fraudulent loans without doing adequate due diligence.  
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Although the SBA issued a rule holding lenders harmless for borrower ineligibility, lenders were 
nevertheless required to follow standard BSA requirements, including verifying borrower 
identities—which Kabbage repeatedly failed to accomplish. 
 
a. 
Kabbage Was Aware of Fraud, but Had Little Incentive to Prevent It  
 
Kabbage executives were aware of the risk that fraudulent PPP applications would pass 
through the company’s systems.  In the first months of the program, Kabbage hired a consulting 
firm, Alvarez & Marshall Disputes & Investigations, LLC (A&M), to conduct a review of its 
work on the PPP.  A&M’s testing, concluded by June 11, 2020, indicated that one of ten 
Kabbage-approved loans tested by A&M had failed its automated test to verify business identity 
and recommended that the applicable procedures “should more clearly account for [a] process” 
to handle such failures.587  A&M also found that three of ten approved applications tested were 
missing one or more required supporting documents.588  The report noted that “Kabbage is 
currently in the midst of enhancing controls.”589  But, at the time of that statement, Kabbage had 
already funded over 120,000 loans through the prior control system.590  Despite these issues, the 
assessment concluded that “[o]verall,” Kabbage’s program complied with the limited SBA rules 
and applicable regulatory standards.591    
 
By July 2020, internal emails among Kabbage executives indicated that Kabbage had 
seen significant increases in fraud by businesses applying for PPP loans (first-party fraud), 
including through falsified tax documents that had been auto-approved without any manual 
input.  For example, a series of applications from a fraud ring using forged W-3 forms for 
identical loan amounts across multiple applications had passed all of the automated screenings 
Kabbage had in place, but were caught by banks receiving the funds.592  Kabbage introduced 
plans in the same month to use additional reviews for higher-value loans and new controls to flag 
suspicious documents.593  By that time, however, Kabbage had already funded over 160,000 PPP 
loans totaling nearly $5 billion.594   
 
At least one exchange suggests that the program’s structure incentivized Kabbage to 
deprioritize rigorous fraud reviews.  In a July 2020 internal chat among risk and fraud analysis 
team members, several Kabbage team members raised concerns about the scope of fraud they 
were seeing.595  One analyst wrote, “I’m feeling really uncomfortable with the review procedure 
we have now because I’m not comfortable passing almost all the people I have to pass. . . .  I feel 
like the level of fraud we’re reviewing is wildly underestimated.”596  Another wrote, “we are also 
getting a lot of tickets from [initial reviewers] for ‘weird looking docs’ but if they come back in 
inscribe [a third-party document screening software] as clear should we just say sorry there is 
nothing we can do here?”597   
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In response to an analyst’s question about multiple applications coming from a single 
device, a Kabbage risk manager instructed his team that the fact that “the risk here is not ours—it 
is SBAs [sic]” should inform their decisions to approve or deny the applications.598  This 
comment appears to have referred to the full SBA guarantee for PPP loans and the SBA’s 
promise to ultimately “h[o]ld harmless” lenders for borrowers’ lack of compliance with program 
criteria, even though lenders were still required to conduct due diligence on borrower identities 
consistent with regulatory standards applicable to banks.599 
 
 
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b. 
Kabbage Reduced Its Risk and Account Review Staff by 50 Percent While 
Approving Billions in PPP Loans 
 
Despite the risk of fraud, Kabbage made staffing reductions throughout 2020 that likely 
weakened its capacity to address fraud.  Press reports indicate that Kabbage furloughed 
employees in March 2020, anticipating a contraction in business during the pandemic, but that 
participation in the program “saved” the struggling fintech.600  Nonetheless, internal employment 
data obtained by the Select Subcommittee indicates that, starting May 2020, Kabbage 
continuously reduced its core staff over the course of many months despite its lucrative 
participation in the PPP.601  The staff shed by Kabbage included full-time members of the Risk 
and Account Review teams that were primarily responsible for fraud reviews and KYB/KYC 
reviews.   
 
By June 2020, Kabbage halved its Risk and Account Review employees from 84 (in 
April) to 42, and the numbers continued to meaningfully decline through September.602  Despite 
these staff reductions, Kabbage funded approximately $1.6 billion in PPP loans in May, $1.5 
billion in June, and over $800 million in July 2020.603  Kabbage outsourced the work to 
temporary contractors.604  In an email exchange regarding contractor onboarding, Kabbage 
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executives discussed heavily pressuring these prospective reviewers to prioritize speed by setting 
“crystal clear [contractual] expectations with them in terms of output per hour so we manage 
cost/output appropriately.”605  A quota system, if it was indeed implemented, would have further 
incentivized reviewers to ignore indicators of fraud in applications. 
 
c. 
Kabbage PPP Application Reviewers Expressed Confusion and Concern About 
Kabbage’s Fraud Controls 
 
In communications obtained by the Select Subcommittee, a Kabbage employee expressed 
concerns to an executive about unclear or inadequate processes for identifying and addressing 
potential fraud.  The employee contacted Kabbage’s Head of Strategy in early July, noting that 
“it just seems like there is money going out the door to bogus businesses that is preventable.”  
The executive responded that the company should approve questionable loans, stating: “it’s a 
really hard spot we’re in with the program . . . . Essentially if there is no definitive proof of fraud 
(I’m sure there are exceptions to what I’m going to say) then we have to let it through.”606  
Although the program rules permitted lenders to rely on borrower certifications when analyzing 
a lender’s eligibility for given loan amounts and its use of loan proceeds, lenders were generally 
required to implement methods to identify and verify new borrowers’ identities (or to use a 
Customer Identification Program operated by certain federally insured financial institutions) and 
to develop customer risk profiles.607  It is therefore unclear how the executive concluded that 
lenders “have to let … through” loans they suspected of being fraudulent. 
 
Members of Kabbage’s fraud team repeatedly questioned the effectiveness of Kabbage’s 
guidance to its fraud review teams.  Internal chats among fraud analysts suggest confusion about 
the company’s formal requirements for fraud prevention.  In a June 2020 chat, one fraud team 
member expressed alarm at the company’s lack of clear guidance for red flag escalation, writing: 
“For real though . . . is this process not all written down somewhere?” and mocked Kabbage’s 
purported “See Something” “Say Something” approach to fraud escalation:608 
 
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On June 3, 2020, Kabbage’s Head of Portfolio Risk and Analytics instructed fraud 
reviewers in Kabbage’s internal “ppp fraud”-focused chat channel, “We should absolutely not 
clear any account for Fraud or KYC/KYB until 100% sure . . . it’s better to decline if we are not 
100% sure than actually approve with 90% confidence.”609  However, another supervising risk 
manager sent contrary instructions to the same chat group on July 16, 2020:  “[I]f someone sends 
in all the docs we have asked for and are not forged, then we need a convincing reason to decline 
them.  Simply ‘we think you’re fraudulent because you have a device match’ does not cut it.”610  
Kabbage employees responded to the latter advice by requesting “something in writing.” 
Another employee wrote that they wanted written guidance to “cover my rear end” in the event 
the guidance led them to approve fraudulent applications.611   
 
Concerns about Kabbage’s processes extended to the executive level.  In late April 2020, 
several weeks into the program, Kabbage’s Chief Technology Officer wrote to other executives:  
“[W]e need an end to end system.  [T]his is a wreck.  I don’t know what people are reviewing 
and under what rules . . . . it’s crazy to manage this volume in spreadsheets.”612  At the time of 
that discussion, Kabbage had already funded over 50,000 PPP loans.613  Kabbage’s antifraud 
program also lacked governance structures such as a committee focused on fraud and financial 
crime or minuted leadership meetings on fraud-related issues, even though these would be 
standard protocols in many similarly situated, directly-regulated financial institutions.614 
 
d. 
Multiple Banks Working with Kabbage Raised Concerns About Fraud in 
Kabbage-Approved Loans, but Kabbage Did Not Appear to Take Steps to 
Mitigate Those Concerns  
 
A number of banks working with Kabbage—both as lending partners and as recipient 
institutions for PPP funds—raised concerns about fraud among Kabbage-approved loans.  
 
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Both Cross River and Customers Bank stopped working with Kabbage after the PPP’s 
first round.  When asked about its experience with Kabbage during the PPP, Cross River 
indicated that it ended its partnership with Kabbage in August 2020.  Among other factors, Cross 
River described concerns surrounding Kabbage’s application reviews, including “process and 
documentation issues” that made it “a prudent risk management decision not to work with 
Kabbage during the 2021 PPP.”615  
 
Wells Fargo, which processed fund transfers for Kabbage during the first round of the 
PPP, developed what one Kabbage executive referred to as a “contentious relationship” with the 
fintech over its approval of fraudulent applications.616  Wells Fargo requested in July 2020 that 
Kabbage transition to a different bank for its fund transfer services.617  A representative of Wells 
Fargo wrote to executives at Kabbage on July 17, 2020:  “As discussed on the call today, we are 
concerned about the significant increase in the fraudulent transactions confirmed by Kabbage 
over the past few days, including $18MM of new transactions that were flagged yesterday.”618  
Kabbage executives dismissed Wells Fargo’s concerns.  In a July 17, 2020, exchange, Kabbage’s 
Head of Capital Markets passed along to other Kabbage executives a question from Wells Fargo 
about whether Kabbage knew about, or informed the FBI about, an applicant who had been 
arrested after obtaining a PPP loan from Kabbage.  The company’s Head of Strategy responded 
internally:  “I doubt anyone would ever confirm or deny any of that …. so sure what the hell … 
we called them.”  He added: “It’s not like we’d be able to comment on anything if we did.  I’m 
not going to even look to see if we filed any reports on that one.”619  Kabbage’s General Counsel 
responded to the email chain:  “good grief[.]  OK you got me it was me – I’m behind [fraudulent 
applicant] little piglet soap company.”620  
 
Kabbage also appears to have failed to address fraud flags raised by recipient financial 
institutions.  On July 31, 2020, a senior vice president for fraud prevention at Citi Bank emailed 
Kabbage’s Head of Strategy with the subject line “Incoming Kabbage SBA Loan to Citibank---
Possible Fraud,” marked as “High” importance.  The executive explained in the email that an 
incoming PPP loan for $20,833—the maximum available to a sole proprietor—was sent to an 
individual who did not own a business, and offered:  “I have some of the funds still on hold if 
you guys want them back.”621  In a follow up email to Kabbage’s Head of Strategy on September 
22, 2020, regarding another potentially fraudulent loan, the executive noted:  “[U]nfortunately, I 
wasn’t able to hold the funds on the last loan because I never got a response from anyone at 
Kabbage.”622 
 
2. 
The Select Subcommittee’s Investigation Confirmed That Suspicious Kabbage-
Funded Loans Identified by News Organizations Were Approved Despite 
Multiple Red Flags 
 
The structure of the PPP, in which the SBA and American taxpayers assumed all the risk, 
while lenders (and, by extension, their partners) were paid for all loans issued but not for 
applications reviewed and rejected as ineligible, meant that fintechs like Kabbage were not 
incentivized to utilize robust anti-fraud systems.  The Select Subcommittee obtained previously 
undisclosed documents revealing failures in Kabbage’s fraud checks.  This evidence confirms 
prior reporting by ProPublica and illustrates that the fintech overlooked significant red flags 
when it approved apparently fraudulent farm loans.  The documents show that the improbable 
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locations of the farms were only part of the story—rather, many of the loans included multiple 
significant fraud indicators. 
 
In one example, “Deely Nuts” was approved for and issued a $20,833 loan (the maximum 
for sole proprietorships) in August 2020.623  ProPublica previously reported that, although Deely 
Nuts’ principal business was described as “tree nut farming,” the business claimed to be located 
on a sandbar in New Jersey.  Loan application documents obtained by the Select Subcommittee 
indicate that the applicant filed the incorrect tax schedule form for farms624 and also listed the 
business’ Principal Business or Professional Activity Code (a numerical code based on North 
American Industry Classification System (NAICS) codes) as “999999”—a default number for 
“Unclassified establishments” (rather than any of the codes under the “Agriculture, Forestry, 
Hunting, & Fishing” category).625  The application documents also list zero expenses for wages 
or contract labor or for purchases of supplies that would typically be required to operate a 
farm.626  The “Cost of Goods Sold” section of the tax documents cite no expenses for “Materials 
and supplies” or “labor.”627  In contrast to the average gross margin of 13.61 percent for farms in 
the United States,628 data from the Deely Nuts supporting documents indicate a gross margin of 
82 percent.629  The Select Subcommittee also determined that the business address listed 
throughout the PPP Borrower Application Form is that of a beachfront vacation rental cottage in 
coastal New Jersey.630   
 
 
Kabbage approved an application for Shaila Big Fresh Oranges in August 2020 for a 
$17,931 loan.631  ProPublica and other outlets previously reported that the principal business for 
this applicant was described as “Orange Groves,” even while the application listed a business 
address in Minnesota.632  Documents obtained by the Select Subcommittee reveal additional red 
flags, including that the purported farm claimed to have a single employee, listed no wages or 
contract labor on its application, listed no supply purchases within its expenses, used the 
incorrect tax form for farms, cited a miscellaneous 999999 NAICs code rather than a code 
appropriate for farms, and included data indicating an unusual gross margin of 84 percent.633  
The Select Subcommittee also determined that the business address previously flagged by Pro 
Publica was a three bedroom, single family home.634   
 
In the case of Strawberry Joseph Schrempp, which Kabbage approved for a loan of 
$19,829 in June 2020, ProPublica previously reported that the application listed the home of a 
bank president who denied owning a strawberry farm.  Internal Kabbage documents obtained by 
the Select Subcommittee show that Kabbage flagged the application for a “fake passport” two 
weeks after it was approved and its SBA note signed for disbursement.635  Despite the 
disbursement approval, notes on Kabbage’s LexisNexis analysis of the application include “Risk 
Indicators” such as “Unable to verify business name, address, TIN and phone on business 
records;” “The input business address may be a residential address (single family dwelling); 
“Unable to verify phone number;” “The input phone number and input zip code combination is 
invalid;” and “The input name and address return a different phone number.”  Nevertheless, the 
application’s “Verification Status” was listed as “Verified.”636  A website tracking and analyzing 
PPP loan data from the SBA notes that “PPP recipients in th[e strawberry farming] industry 
report an average of 43 employees, 4200% higher than Strawberry Joseph Schrempp’s reported 1 
employees [sic], and received an average PPP loan of $230,326, 1,062 percent higher than this 
company’s loan of $19,829.”637 
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Many of these patterns—including tax documents not typically used by farms, 
miscellaneous 999999 NAICs codes, a lack of labor expenses, business addresses for single-
family homes in residential neighborhoods, gross margins exceeding 70 percent and sometimes 
approaching 90 percent, and email addresses using persons’ names other than the name of the 
applicant contact—appeared in the applications of three other purported farms that were reported 
by ProPublica, including a tomato farm that Kabbage approved for $12,739; a “Wheat farming 
wheat farming [sic] field and seed production” that Kabbage approved for $20,833; and a “Beef 
cattle ranching and farming” business (which ProPublica noted had been registered to the home 
address of the mayor of Long Beach, New Jersey) approved by Kabbage for $20,567.638  Internal 
Kabbage emails indicate that each of these businesses had been confirmed as fraudulent in 
March 2021, seven to eight months after the loans were funded, and that Kabbage had failed to 
recover any of the funds.639 
 
These issues were sometimes accompanied by other red flags, such as loans sought for 
exactly the amount available through the PPP to sole proprietors.  For example, the Ritter Wheat 
Club application’s payroll calculations added up to exactly $20,833, which was the maximum 
loan amount for a single proprietor with one employee.640  Internal correspondence indicates that 
Kabbage had discussed whether loans for $20,833 were suspicious as early as May 2020, but that 
Kabbage’s Head of Policy had opined, “I don’t think that’s suspicious given we’re serving these 
markets, nor do I think it’s fraud.”641  At that point, Kabbage had already approved nearly 9,000 
loans for that amount, collectively worth over $183 million dollars.642   
 
 
 
Figure 7:  Google street view of the residential beachfront site of a supposed “Beef Cattle Ranching       
and Farming” business in New Jersey, on a PPP application approved by Kabbage.643 
 
 
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3. 
Kabbage Sold Its Primary Business to American Express Mid-Program, 
Capitalizing on PPP Profits While Leaving Legitimate Borrowers Without 
Effective Assistance with Forgiveness 
 
On October 16, 2020, Kabbage sold the majority of its assets to American Express 
Company for approximately $850 million.644  The entity currently known as “Kabbage” is now 
operated by American Express, while what remained of the original fintech was spun off into a 
business called “KServicing.”645  As part of these transactions, the majority of Kabbage’s key 
employees, data, documents, and systems were transferred to American Express.646  However, 
American Express did not assume the company’s PPP liabilities.  In communications with the 
Select Subcommittee, American Express emphasized that the company “expressly did not 
acquire Kabbage’s liabilities arising under, resulting from, or related to Kabbage’s historical loan 
portfolio or the PPP portfolio.  Any regulatory obligations or issues related to Kabbage’s PPP 
loans belong solely to Kabbage.”647   
 
At the time of the acquisition and spinoff, Kabbage had already issued PPP loans to over 
a quarter million borrowers that would need ongoing servicing, including for forgiveness 
processing.  Without clear regulatory penalties for poor servicing of funded loans, Kabbage and 
its new owner left these borrowers to a severely under-resourced company with fewer than 12 
full-time employees to help service those loans.648  Although public estimates put Kabbage’s 
PPP fee earnings at over $300 million at the time of the acquisition,649 KServicing was unable to 
tell the Select Subcommittee how much funding it had at its disposal post-acquisition to provide 
services to PPP borrowers.650  However, KServicing told the Select Subcommittee that its 
resources were “limited.”651   
 
KServicing also retained only contractual use of American Express’ data and systems, to 
which they had to request access in order to perform forgiveness services for borrowers.652  
Public reports detailed borrowers struggling to obtain their second-draw loan funds from 
KServicing after the spin-off.653  In March 2022, the Miami Herald also reported that 
Kabbage/KServicing saw the lowest forgiveness rate of any major lender in the first year of the 
PPP.654 
 
Even after Kabbage was sold and KServicing was left with a skeleton staff, KServicing 
continued to fund loans.  KServicing informed the Select Subcommittee that, following the 
October 2020 acquisition, only “one Kabbage employee was dedicated full time and exclusively 
to AML [anti-money laundering], BSA [Bank Secrecy Act], or fraud compliance from October 
16, 2020 to May 2021, at which point this employee was transferred to American Express.”655  
As of mid-June 2021, “[t]here [were] no Kabbage employees that [were] dedicated full time 
exclusively to AML, BSA, or fraud compliance,” although some employees did such work part-
time.  Kabbage claimed to have contracted a third-party firm to support the part-time 
employees.656  Nevertheless, Kabbage continued to fund loans; in the time in which Kabbage 
claimed to have only one full-time anti-fraud employee, Kabbage funded over 50,000 loans 
within a 13-week period.  Loans continued to be funded even after Kabbage lost that 
employee.657   
 
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While American Express obtained Kabbage’s PPP profits, KServicing was left with its 
responsibilities to service borrowers’ loans and the portfolio’s liabilities, including multiple 
Department of Justice investigations into whether Kabbage’s review of PPP applications was 
consistent with federal fraud laws, as well as an investigation by the Federal Trade Commission 
into potential deceptive and unfair practices.658  KServicing eventually filed for Chapter 11 
bankruptcy on October 3, 2022.659   
 
Upon filing for bankruptcy, KServicing disclosed that it faced allegations from SBA that 
it had made excess loan payments to borrowers, as well as accusations from Customer Bank that 
it had failed to perform required loan servicing.660  In the same filing, KServicing accused 
American Express, which continues to manage and publicize Kabbage’s primary lending 
business,661 of failing to honor its commitments to provide KServicing with the data it needed to 
run it PPP business, including access to the platform used by borrowers.662  While Kabbage’s 
sale left the company with fewer staff to prevent fraudulent loans and protect taxpayer dollars, 
and borrowers with limited assistance with forgiveness servicing, American Express, Kabbage, 
and its executives were left free from liability and responsibility.  
 
F. 
Bluevine Initially Faced Significant Fraud Rates, but Its Longstanding 
Partners Intervened to Improve Fraud Prevention over the Course of the 
Program 
 
The story of another fintech, Bluevine, demonstrates that it was possible to reduce the 
amount of fraud in the PPP with adequate diligence measures.  
 
1. 
Bluevine Attracted and Facilitated Significant Amounts of Fraud Early in the PPP 
 
Bluevine, a fintech headquartered in California, was founded in 2013 to facilitate loans 
for small businesses.  Between its entry into the PPP in April 2020 and the end of the program in 
May 2021, Bluevine worked exclusively with two preexisting bank partners—Celtic Bank and 
Cross River Bank.  Bluevine estimated that it had facilitated approximately $2 billion in funds 
for at least 20,000 small businesses over its approximately seven-year pre-pandemic history.  
Over the course of the PPP, Bluevine assisted in delivering $8.9 billion in PPP funds to over 
300,000 small businesses.663  In other words, during its participation in the PPP, Bluevine 
facilitated over four times the amount of funds it had worked with in its entire prior history, for 
at least 15 times the total number of businesses it had previously worked with. 
 
As with other PPP facilitators, numerous fraudulent applications passed through 
Bluevine’s systems.  In one case, Bluevine approved a loan application for $1.9 million in May 
2020 for a Florida man who claimed to operate a scrap metal company employing 69 people out 
of his home address.664  The purported business had no internet presence, and the application 
included IRS forms that cited identical information concerning the number of employees, 
compensation, and federal income tax over four consecutive quarters.665  Another applicant was 
initially rejected by Bluevine after submitting falsified bank statements in May 2020, only for 
Bluevine to approve a second fraudulent application, for the same business from the same IP 
address for $841,000, a week later.666   
 
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Fraud rings appear to have singled out Bluevine for its susceptibility to fraud.  Court 
records show that Bluevine allegedly approved applications in May of 2020 even after its 
systems linked multiple applications to a single IP address, which was later identified as the 
home address of a fraud ring participant.667  A member of the ring allegedly sent text messages to 
his accomplices referring to Bluevine by name and complaining on June 5, 2020 that the fintech 
was “out of cash.”668  Another convicted fraudster, who received 17 years in prison for leading a 
$20 million coronavirus-related fraud scheme, texted a co-conspirator:  “10k guaranteed...they 
don't check for s---...it’s all automated,” and “I did 7 [applications] last night and 4 of them got 
email that it’s funded...I’m telling you to apply [to] Bluevine.”669 
 
Minutes from Celtic Bank’s internal Risk Committee meetings obtained by the Select 
Subcommittee show that loans processed by Bluevine had higher fraud rates than those 
processed by Celtic acting alone or in conjunction with other partners, including other fintechs or 
fintech-owned companies.670  As of mid-May 2021, Celtic’s analysis of PPP fraud indicated that 
Celtic had confirmed 1,723 cases of fraud, 1,557 of which were associated with Bluevine-
processed loans.671  As shown in figure 8, Celtic’s Risk and Compliance Committees also 
tracked fraud in PPP loans, with fraud statistics broken out by partner fintech.  These records 
show that Bluevine had an estimated gross fraud rate of seven percent, as compared to under five 
percent for Celtic’s direct loans and lower amounts for those loans processed through other 
fintech partners. 
 
 
Figure 8:  Celtic’s assessment of PPP fraud, broken down by partner, throughout the PPP (as of May 11, 2021).672 
 
2. 
Federally-Regulated Bank Partners Successfully Pressured Bluevine to Improve 
Its Controls During the PPP, Likely Reducing Fraud  
 
Bluevine worked exclusively with preexisting bank partners to process PPP applications.  
Both Celtic and Cross River are well-established banks subject to federal anti-fraud regulations, 
including the Bank Secrecy Act.  Each had a history of working with both SBA and fintech 
companies prior to the pandemic.  Celtic had previously partnered with both Bluevine and 
Kabbage, among others, to provide other lending products, and had been an authorized SBA 
lender for two decades.673  Cross River, a small bank with 350 employees, had partnered with 
fintechs such as Bluevine on various products since 2010.674  
 
Because SBA rules—unchanged when largely unregulated fintechs became major players 
in the PPP—allowed lenders to delegate fraud controls to contractors, these banks appear to have 
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been the primary outside source of accountability for Bluevine’s anti-fraud work.675  Bluevine 
appears to have benefited from the regulated banks’ influence both before and during the PPP.  
By virtue of Bluevine’s relationships with the banks, Bluevine’s approximately 80 risk and 
compliance employees already received regular annual training on customer identification 
protocols and red flags for identity theft before the pandemic.676  The banks’ relative success in 
pressuring Bluevine to improve its controls over time also suggests that the PPP would have 
benefited from rigorous oversight of entities responsible for fraud controls and/or from rules 
restricting delegation of anti-fraud controls, in particular, to well-regulated entities.  SBA’s 
general lack of direct oversight of third-party service providers,677 in combination with 
participation by lenders who had varying regulatory obligations and experience and who largely 
delegated compliance controls to third parties, created varying degrees of oversight by private 
lenders responsible for their contractors’ actions.   
 
Consistent with risk management guidance from the Office of the Comptroller of the 
Currency (OCC), both Celtic and Cross River appear to have undertaken “due diligence . . . 
before selecting and entering into contracts” specific to the PPP, rather than “rely[ing] solely on 
experience with or prior knowledge of the third party as a proxy for an objective, in-depth 
assessment of the third party’s ability to perform the activity in compliance with all applicable 
laws and regulations.”678  The banks also ensured that the contracts “clearly define[d] 
expectations and responsibilities of the third party.”679  Bluevine informed the Select 
Subcommittee that its bank partners “regularly review and approve Bluevine’s compliance and 
risk policies and procedures, and can direct Bluevine to make changes in these policies, 
including any underwriting policies, both before engaging Bluevine to provide third-party 
services and throughout the course of the business relationship.”680  Internal correspondence 
among Bluevine, Celtic, and Cross River indicates that Bluevine made multiple enhancements to 
its fraud controls over the course of the program in response to requests and pressure from its 
regulated bank partners.  These improvements indicate that the presence of a strong regulatory 
structure applicable to fintechs or other entities managing anti-fraud controls may have improved 
fraud rates across the board during the PPP. 
 
 
By May 2, 2020, Celtic was “originating annual program volumes in mere days,” 
according to internal correspondence among Celtic executives and Bluevine staff.681  Celtic 
representatives informed Select Subcommittee staff that they discovered more fraud than they 
had expected in the first round of the PPP, particularly with respect to the submission of 
manipulated documents by PPP applicants.682   
 
Celtic’s formal governance structure assisted it in tracking and acting on fraud that came 
through Bluevine.  From early in the program, Celtic’s Compliance and Risk Committees, made 
up of executives experienced in risk and fraud-detection operations or other aspects of the 
financial industry, closely tracked actionable information concerning fraud in Celtic-funded PPP 
loans.683  Materials from this committee show that Celtic tracked the number and value of 
fraudulent applications, as well as progress on investigations into fraud, broken down by fintech 
partner to help Celtic track each partners’ anti-fraud performance.684   
 
Celtic representatives had ongoing, regular meetings with Bluevine’s compliance and risk 
teams from the beginning of the program, initially on a daily basis and subsequently three times 
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per week, to discuss fraud trends, individual cases, and potential control enhancements.685  
Correspondence obtained by the Select Subcommittee confirms that Celtic personnel gauged the 
effectiveness of Bluevine’s fraud controls in real time and pressed Bluevine to enact increasingly 
rigorous standards.686   
 
Correspondence between Celtic and Bluevine in the first three months of the PPP indicate 
that Bluevine introduced new software and manual review processes in response to requests or 
pressure by Celtic, which was actively monitoring its own fraud risk (and by extension, the fraud 
risks created by its partnerships) to ensure ongoing compliance with anti-fraud statutes 
applicable to banks.  In response to the bank’s request, Bluevine also conducted an analysis of 
the new checks, which indicated that the controls would have caught 78% of previously-
approved fraudulent applications had they been implemented earlier.687  Data subsequently 
collected by Celtic suggests that the fraud incidence in Celtic’s loans (the majority of which were 
originated by Bluevine) began to decline at the time that these fraud prevention measures were 
implemented.688  These real-time analyses indicate that the bank’s active oversight of its fintech 
partner, consistent with its own regulatory obligations, may have reduced fraud after new 
controls were implemented. 
 
 
Figure 9:  Data from Celtic Bank’s internal chart of PPP fraud cases per month in all Celtic-funded loans (as of 
May 11, 2021), indicating a steep decline in Bluevine fraud incidents following the addition of new controls in June 
2020 (and again after further changes for the 2021 round of PPP).  Although these figures represent all Celtic PPP 
loans, nearly three-quarters of PPP funds issued by Celtic’s PPP funding were ultimately done through Bluevine 
applications.689 
 
Celtic continued to engage closely with Bluevine on fraud controls throughout 2020 and, 
in a renewed partnership limited to second-draw loans, into 2021.690  In board materials for 
Celtic’s Compliance Committee in April 2021, toward the end of the PPP, Celtic estimated that 
Bluevine’s 8.54 percent rate of fraudulent loan funds in first-draw loans had declined to a 0.08 
percent rate of fraudulent loan funds in second-draw loans based on then-available data.691  
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Celtic attributed the improvement to “Process Enhancements” including “Increased front-end 
controls at Bluevine.”692 
 
 
Figure 10: Events demonstrating the influence of Celtic Bank’s oversight of Bluevine’s fraud prevention efforts.693 
 
Bluevine’s second partner bank, Cross River, also negotiated the authority to review and 
require changes to Bluevine’s fraud policies and procedures.694  Cross River appears to have 
performed such reviews of Bluevine’s fraud controls periodically, including in advance of each 
new PPP round.  In addition to the April 2020 due diligence discussed above, Cross River 
requested and reviewed a list of enhancements to anti-fraud detection and prevention measures 
that Bluevine was making in preparation for PPP reopening in 2021.695  Cross River continued to 
conduct periodic reviews of partners’ fraud policies until late in the PPP.696  However, 
contemporaneous correspondence from Cross River obtained by the Select Subcommittee 
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generally did not reflect the same rigorous and consistent oversight efforts as Celtic’s emails 
with Bluevine.  In a briefing with Select Subcommittee staff, Bluevine acknowledged that Celtic 
was “more hands on” than Cross River with regard to fraud concerns.697  This difference shows 
how, without direct oversight of third-party service providers by SBA, even experienced and 
regulated lenders varied significantly in their ability and willingness to supervise the agents 
responsible for protecting billions in taxpayer dollars from fraud.  
 
Available data indicates that Cross River’s comparatively less hands-on approach to its 
partners may have led it to approve somewhat riskier loans than Celtic, again suggesting that 
active oversight of the unregulated fintechs may have correlated with reduced fraud risk.  The 
University of Texas graph shows that nearly 20 percent of Cross River’s loans had at least one 
suspicious indicator, as compared to approximately 10 percent of Celtic’s (which was below 
average across PPP lenders).698  Lenders that worked with Blueacorn and Womply who were less 
than diligent in monitoring their fintech partners had even higher rates of suspicious loans.699  
The apparent distinction between Celtic’s and Cross River’s results suggest that diligent 
oversight processes (or the relative lack thereof) may have materially impacted the quantity of 
fraud in the program.   
 
3. 
Bluevine Struggled to Provide Timely QARs, Underscoring That Oversight Was 
Required to Ensure Unregulated Fintechs Complied with Applicable Rules  
 
In order to file required Suspicious Activity Reports (or SARs)—reports that alerted 
regulators to fraudulent loans and related patterns—banks relied on Bluevine to investigate 
potential fraud associated with Bluevine-processed loans and to provide them with Questionable 
Activity Reports (QARs) summarizing the issues identified.700  Emails and documents reviewed 
by the Select Subcommittee show that at least one bank had significant difficulty, throughout the 
program, in obtaining timely cooperation from Bluevine on QARs to meet applicable legal 
reporting deadlines under the Bank Secrecy Act (i.e., the filing of a SAR no later than 30 
calendar days after suspicious activity is first detected701), an issue that did not improve for much 
of the program.702  This suggests that significant oversight was sometimes required to ensure that 
fintechs complied with standard regulations for financial institutions, including regulations 
critical to keeping law enforcement informed about fraud patterns. 
 
Celtic’s internal Compliance Committee minutes from early in the PPP flagged that “PPP 
Fraud has increased QAR/SAR volumes significantly,” and noted the “Highest concentration [of 
SARs] is with Bluevine.”703  In July 2020, Celtic emailed Bluevine’s Compliance and Risk 
leadership to reiterate the bank’s need for timely-filed QARs within ten days of confirmed 
fraud.704   
 
 
Figure 11:  Item in October 2020 deck for Celtic’s Compliance Committee, noting late filings of Suspicious Activity 
Reports to law enforcement, due in part to “[d]elays in reviews by Bluevine.”705 
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These delays continued well into 2021.  On March 30, 2021, Bluevine’s Vice President 
of Compliance wrote to Bluevine’s compliance and risk teams: 
 
[W]e have growing concern about the timeliness and completeness of investigations and 
QARs from Bluevine.  … Recently, we have had a lot of back and forth on incomplete 
QARs and this is putting us behind on our timeframes [for SAR reporting]. …  We need 
to avoid this at all costs because it is a direct violation of law.706   
 
 
 
In response to the pressure from Celtic, Bluevine reallocated resources in 2021, including 
by hiring “an additional full-time employee … to specifically help support PPP fraud 
reviews.”707 
 
Even with heavy oversight by its regulated partner and its apparent success in reducing 
fraud rates, the “surge in fraud associated with PPP” appears to have overwhelmed Bluevine, 
causing its partners to miss legal reporting requirements designed to help law enforcement 
identify, and respond to, fraud in real time.  These requirements were even more critical in the 
PPP, given the speed at which taxpayer funds were spent and the rapidly evolving strategies of 
criminal fraud rings.  This example raises concerns about adequate and full reporting of PPP 
fraud by other third-party service providers—especially those who lacked experience in filing 
SARs—who were facing the same fraud surge but may have had less attentive and experienced 
lending partners. 
 
 
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I. 
RECOMMENDATIONS 
 
A. 
SBA’s Office of Inspector General Should, in Addition to Its Ongoing Work 
to Assess the Precise Amount of Fraud Committed Against the PPP, Conduct 
a Comprehensive Review for Waste, Fraud, and Abuse by Lenders and Their 
Service Providers in the PPP.  
 
The Select Subcommittee’s investigation determined that certain lenders and service 
providers implemented ineffective identity verification programs while collecting billions of 
dollars in taxpayer-funded loan fees, and that certain fintech principals may have abused their 
position in the PPP to charge unauthorized fees or to obtain PPP loans for themselves, their 
businesses, and their family members.  A comprehensive review of lenders and their third-party 
service providers will be crucial for lawmakers to better understand what worked and what failed 
in the PPP so as to incorporate those lessons into future relief programs.  This type of review will 
inform decisions by government agencies when selecting private partners for government 
programs.   
 
As part of its review, SBA OIG should examine allegations that Blueacorn executive 
Stephanie Hockridge charged borrowers fees as part of Blueacorn’s “VIPPP” operation in 
violation of SBA policy.708  SBA OIG should also examine lender approvals of PPP loans 
awarded to the principals of and businesses owned by Womply and Blueacorn, other businesses 
owned by their principals and family members of those principals, and businesses owned by 
Blueacorn subcontractor Elev8 Advisors’ principals and their family members.  The Select 
Subcommittee’s findings make clear that, while SBA OIG previously identified billions of 
dollars of PPP funds approved and disbursed to ineligible applicants, taxpayers still do not know 
the precise extent of fraud committed against the PPP.  Confirming the full scope and nature of 
such fraud is vital to determine best practices for ongoing and future SBA programs, and to 
reduce future emergency programs’ vulnerability to financial crime.  
 
Based on the findings of its review, SBA OIG should refer any potential criminal 
violations to appropriate law enforcement agencies and refer instances of program 
noncompliance or ineligible loans to SBA, so that SBA can assess whether to demand repayment 
of individual loans, suspend or revoke the privileges of certain lenders and LSPs from 
participating in SBA programs,709 and/or demand that the lenders responsible for approving 
preventable, fraudulent loans return PPP processing fees.  SBA OIG should also publish its 
general findings to improve government agency decision-making about, and public 
accountability for, lenders and their subcontractors participating in SBA programs. 
 
B. 
SBA OIG Should Revisit and Update Its 2015 Examination of the SBA’s 
Oversight of Lender Service Providers to Assess Systemic Risks Posed by the 
Involvement of Fintechs and Other Underregulated Entities in SBA 
Programs, and SBA Lenders’ Delegation of Major Compliance-Related 
Responsibilities to Those Entities. 
 
In light of the conduct uncovered by the Select Subcommittee, SBA OIG should revisit 
and update its 2015 audit, summarized in Report Number 15-06, Improvement Is Needed in 
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SBA’s Oversight of Lender Service Providers.710  The Select Subcommittee’s investigation 
identified multiple instances of lenders delegating fraud prevention and eligibility verification 
controls, nearly in full, to third parties not overseen by SBA, while failing to responsibly 
“exercise day-to-day responsibility for evaluating, processing, closing, disbursing, servicing, 
liquidating, and litigating its SBA portfolio” as contemplated by SBA’s Standard Operating 
Procedures.711  These concerns were enhanced by the involvement of fintechs, which used 
automation to dramatically increase the number of PPP loans being processed for such lenders.   
 
SBA OIG’s updated review should examine systemic risks posed by (1) the involvement 
of fintechs and similarly underregulated entities in SBA programs, and (2) the current framework 
for SBA lenders’ participation in the 7(a) program, which permits SBA lenders to delegate major 
compliance-related responsibilities to third parties (whether or not categorized as LSPs) that are 
not overseen by SBA.  The Select Subcommittee’s findings also suggest the oversight 
mechanisms previously examined by SBA OIG—including tracking LSPs, approving LSP 
contracts, and responding to referrals of potential policy violations by LSPs and lenders—are 
insufficient to protect taxpayers, particularly as applied to very prolific third-party service 
providers and those responsible for compliance controls.  OIG should provide any further 
recommendations to facilitate ongoing, proactive SBA oversight of third-party service providers 
(and/or oversight of the efforts of SBA lenders to supervise them) that may be warranted in light 
of their performance in the PPP.  OIG should also publish its findings to inform potential future 
programs, legislation, or SBA rules.712 
 
C. 
SBA and SBA OIG Should Investigate the Retention and Use of PPP 
Applicant Data by Lenders, Fintechs, and Other Third Parties That 
Obtained PPP Applicant Data on Behalf of Lenders.   
 
The Select Subcommittee found that at least one fintech, Womply, likely retained and 
transferred PPP applicant data to a new company operated by Womply’s leadership, Solo Global, 
Inc., after the conclusion of the PPP, apparently for future commercial use.  This practice may 
not have been limited to Womply.  In light of this finding, SBA OIG should investigate the 
retention and use of PPP applicant data by lenders, fintechs, and other third-parties that obtained 
PPP applicant data for consistency with applicable rules and statutes, such as the Privacy Act of 
1974.713  As approximately 5,500 private sector entities including banks, credit unions, fintechs, 
and community-based financial institutions participated in originating, underwriting, and 
servicing PPP loans, the SBA must have clear guidance in place on what those private companies 
can do with the borrower data they collected as part of facilitating those loans.  SBA should 
consider any recommendations that may be warranted to protect the data and privacy of 
American citizens who must provide their information to private companies in order to 
participate in government relief programs. 
  
 
 
 
 
 
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D. 
SBA Should Promptly Issue and Enforce Guidelines That Clarify the 
Responsibilities of Lenders and Their Service Providers, Particularly in 
Regard to Underwriting, Fraud Screening, and Suspicious Activity 
Reporting.  
 
The Select Subcommittee’s investigation identified multiple instances of lenders 
delegating fraud prevention and eligibility verification controls, nearly in full, to third parties not 
overseen by SBA, while failing to responsibly “exercise[] day-to-day responsibility for 
evaluating, processing, closing, disbursing, servicing, liquidating, and litigating its SBA 
portfolio” as contemplated by SBA’s Standard Operating Procedures.714  The Select 
Subcommittee found no public record of actions being taken against PPP lenders for insufficient 
due diligence into or oversight of the LSPs and agents that approved significant numbers of 
fraudulent applications.  SBA guidelines should more clearly require participating financial 
institutions to thoroughly and continuously vet third-party service providers—including 
fintechs—that perform underwriting, conduct eligibility verification checks, and screen for fraud 
to ensure that their experience, operational capacities, and integrity are aligned with program 
requirements.  Compliance with such rules should be monitored and enforced by SBA to 
encourage more stringent oversight of LSPs and agents—including fintechs—by lenders and to 
ensure that only appropriately resourced LSPs and agents participate in federal programs. 
 
The Select Subcommittee determined that Womply categorized itself as a technological 
service provider, potentially to avoid rules or guidance that would apply to LSPs and agents, 
despite performing services that were similar or identical to those traditionally performed by 
LSPs, as described by SBA.  SBA should clarify the categories of third-party service providers 
as needed to prevent private companies from avoiding oversight or compliance with 
requirements specific to LSPs and agents, and should conduct oversight of lenders participating 
in SBA programs to confirm that existing categories are being appropriately applied by their 
third-party contractors. 
 
E. 
Any Plans by the SBA to Again Open 7(a) Participation to Fintechs and 
Other Unregulated, Non-Depository Institutions Must Be Accompanied by a 
Well-Defined, More Rigorous, and Better-Resourced Initial Review Process, 
and Such Entities Should Be Subject to Continuous Monitoring to Confirm 
Their Adherence to SBA Rules and Industry Best Practices. 
 
The Select Subcommittee’s investigation found that some of the fintechs that participated 
in the PPP and took significant responsibility for its fraud controls lacked experience, resources, 
established policies and procedures for escalating and mitigating fraud, or good governance 
programs.  For example, Blueacorn and its consultant Elev8 Advisors processed PPP loans 
without first implementing a functioning structure to facilitate effective eligibility screening and 
fraud detection, with the result that reviewers reported approving loans they suspected or knew 
to be fraudulent. 
 
The SBA’s 7(a) program requires private sector companies to act in a position of public 
trust to administer federal programs.  The Select Subcommittee’s findings indicate that new 
entrants—including companies acting in a service provider or agent capacity that involves 
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stewardship of taxpayer funds—should be thoroughly reviewed to ensure that they have 
appropriate conflict-of-interest policies and procedures, well-developed mechanisms to identify 
and report fraud to law enforcement, management with appropriate qualifications and a history 
of business integrity, an adequately developed governance structure, and sufficient capitalization 
and capabilities to achieve satisfactory performance.  In addition, SBA should conduct ongoing 
monitoring of lenders and (whether directly or by requiring information from lending partners) 
of third-party service providers for unlawful or unethical conduct and compliance with SBA 
rules.  Any entities found to engage in unlawful or unethical conduct should be disqualified from 
participation in SBA programs. 
 
F. 
The SBA Should Consider Suspending or Revoking the Privileges of Any 
Participant Found to Have Participated in Unlawful or Unethical Conduct 
While Participating in the PPP. 
 
SBA should suspend or revoke the privilege of any lender or third-party service provider 
(however categorized and including successor companies) found to have engaged in unlawful or 
unethical conduct to participate in 7(a) programs, consistent with 13 CFR § 103.3, 13 CFR § 
120.1500, or other applicable rules.  The unethical conduct of Blueacorn, Womply, their current 
and former owners and leaderships, and their successor companies raise concerns about their 
involvement in 7(a) programs or any future relief programs.  SBA should also consider whether 
the lenders that relied on these fintechs conducted adequate due diligence and oversight of their 
service providers to merit suspension or revocation of their privileges to conduct business with 
SBA.  
 
G. 
In Any Future Emergency Financial Assistance Programs That Prioritize 
Speed of Loan Issuance, the SBA Must Conduct Aggressive and Large-Scale 
Reviews of Loans Prior to Their Forgiveness to Detect Fraudulent and 
Ineligible Loans. 
 
Despite widespread reports of fraud in PPP loans, the SBA forgave many loans before 
reviewing them for eligibility and fraud.  SBA OIG has previously “expressed concerns 
regarding the impact this change will have on SBA’s ability to recover funds for forgiven loans 
later determined to be ineligible.”715  In any future relief programs involving forgivable loans, 
the SBA must ensure that loans are fully reviewed for eligibility and fraud before granting 
forgiveness so that taxpayer dollars are safeguarded and fraudulent loans are identified for 
prosecution.  
 
H. 
The SBA OIG Should Investigate Suspicious Loans to Fintech Executives, 
Their Families, and Associates as Identified in the Select Subcommittee’s 
Report.   
 
The Select Subcommittee also uncovered significant evidence that the owners of 
Blueacorn and Blueacorn’s primary financial crime consultant, Elev8 Advisors, may have 
committed PPP fraud themselves while working on the eligibility verification and anti-fraud 
aspects of the program.  The SBA OIG should investigate the potentially fraudulent loans 
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applied for and awarded to Ms. Hockridge, Mr. Reis, the Spencers, and family members of the 
Spencers and refer them to law enforcement if appropriate.   
 
I. 
The Department of Justice Should Continue to Aggressively Prosecute PPP 
Fraud, with an Increased Focus on Fraud Committed by Individuals in 
Positions of Trust and Authority Related to the Program, Such as Lenders, 
LSPs, and Other Agents. 
 
The PPP heavily relied on private companies to facilitate the program, and their failures 
to be good stewards significantly harmed taxpayers.  To the extent that these companies or 
individuals affiliated with these companies themselves committed, aided, or encouraged PPP 
fraud, they should be prosecuted to the fullest extent of the law to discourage future abuse of 
government programs.  
 
 
Such investigations and prosecutions should include, but not be limited to, the potentially 
criminal conduct detailed in this report.  The Select Subcommittee’s investigation identified not 
only cases where fintech principals may have committed PPP fraud, but instances where fintech 
principals, executives, or managers acknowledged that they were aware of a risk of fraud in the 
loans that they were approving, but directed that employees continue to approve such loans.  
DOJ should therefore also investigate whether these fintechs or their employees and principals 
knowingly made, or caused to be made or used, false statements in connection with PPP 
applications that they submitted or processed, in violation of the False Claims Act.716   
 
J. 
Congress Should Continue to Fund and Support Community Lenders—
Including Community Development Financial Institutions (CDFIs), Minority 
Depository Institutions (MDIs), and Others—So That They Can Increase 
Their Capacity to Directly Serve Underserved Communities and Small 
Businesses While Performing Intensive Oversight of Any Firms That They 
Hire to Perform Important Services on Their Behalf. 
 
The Select Subcommittee’s investigation identified several instances in which CDFIs, 
overwhelmed by the needs of customers that were underserved by the traditional banking system, 
delegated their responsibilities heavily to fintech firms.  These institutions sometimes lacked the 
resources and experience to oversee those fintechs, leaving their loans vulnerable to fraud.  At 
the same time, CDFIs and similar community lenders were essential to dramatically increasing 
the reach of the PPP to customers that otherwise lacked access to credit, including many of the 
small businesses and underserved markets that the PPP was designed to support.  In order for 
community lenders to effectively participate in future government programs (and to more 
generally improve equitable access to credit across the nation), they must be supported with 
adequate resources to participate effectively. 
 
 
 
 
 
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K. 
Congress Should Consider Additional Federal Regulations for Non-
Bank/Non-Depository Fintechs Considering Their Increasing Role in the 
Financial Industry, Including Clearer Standards on Financial Crime 
Responsibilities. 
 
Fintechs are claiming an increasingly large role in the financial industry, from providing 
application portals to borrowers as they did in the PPP, to housing encrypted transactions on 
complex networks.  Although fintechs often behave like banks and traditional depository 
institutions, they are not subject to banking regulations such as the Bank Secrecy Act, which 
would require them to implement certain processes and structures to ensure the safety and 
soundness of their operations.  The Select Subcommittee’s findings suggest that fintechs 
subjected to these requirements via their lending partners, such as Bluevine under the oversight 
of Celtic Bank, were more successful at adapting to fraud risks than those that did not.  As the 
fintech industry grows and develops, Congress must thoughtfully regulate the industry to better 
protect consumers and prevent financial crime. 
 
 
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1 $2 Trillion Coronavirus Stimulus Bill Is Signed into Law, New York Times (Mar. 27, 2020) (online at 
https://www.nytimes.com/2020/03/27/us/politics/coronavirus-house-voting.html). 
2 National Bureau of Economic Research, The $800 Billion Paycheck Protection Program: Where Did the 
Money Go and Why Did It Go There? (Jan. 2022) (online at 
https://www.nber.org/system/files/working_papers/w29669/w29669.pdf). 
3 Id.  
4 Id. 
5 Id. 
6 Minority Entrepreneurs Struggled to Get Small-Business Relief Loans, New York Times (Apr. 4, 2021) 
(online at https://nytimes.com/2021/04/04/business/ppp-loans-minority-businesses.html). 
7 Small Business Administration, 7(a) Loans (online at www.sba.gov/funding-programs/loans/7a-loans) 
(accessed Oct. 6, 2022). 
8 Department of the Treasury, Paycheck Protection Program (PPP) Information Sheet Lenders (online at 
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf) (accessed Oct. 
6, 2022). 
9 Department of the Treasury, Press Release:  With $349 Billion in Emergency Small Business Capital 
Cleared, Treasury and SBA Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds (Mar. 31, 
2020) (online at https://home.treasury.gov/news/press-releases/sm961). 
10 Id. 
11  PPP 2 Years Later:  Analyzing the Legacy and Impact of the $800B Government Relief Program, 
Banking Dive (May 4, 2022) (online at https://bankingdive.com/news/ppp-sba-small-business-lending-banks-
analyzing-legacy-impact-800b-paycheck-protection-program/623160/). 
12 Department of the Treasury, Paycheck Protection Program (PPP) Information Sheet Lenders (online at 
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf) (accessed Oct. 
6, 2022). 
13 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0).  
14 Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection 
Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (interim final rule). 
15 Id.  Self-employed workers, independent contractors, or sole proprietorships were also eligible for PPP 
loans and required to submit documentation corroborating their eligibility.  
16 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0); 13 C.F.R. §§ 103.1 (2022). 
17 13 C.F.R. §§ 103.1 (2022); see also Small Business Administration, Office of Capital Access, Lender 
and Development Company Loan Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-
50-10-lender-development-company-loan-programs-0). 
18 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0); see also 13 C.F.R. § 103.1(a) and (d) (2022). 
 
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19 Small Business Administration, Office of Inspector General, Improvement Is Needed in SBA’s Oversight 
of Lender Service Providers (Mar. 12, 2015) (Rept. No. 15-06) (online at https://oversight.gov/sites/default/files/oig-
reports/OIG_Report_15-06_Lender_Service_Providers.pdf). 
20  Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0). A March 12, 2015, SBA OIG Report noted that, “due to insufficient resources or 
inexperience with the complexities of SBA lending requirements, many lending institutions contract with LSPs to 
provide services in connection with originating, closing, servicing, or liquidating SBA business loans” and that 
“LSPs are deeply involved in all phases of the loan life cycle, including originating, closing, servicing, and 
liquidating SBA business loans.” Small Business Administration, Office of Inspector General, Improvement Is 
Needed in SBA’s Oversight of Lender Service Providers (Mar. 12, 2015) (Rept. No. 15-06) (online at 
https://oversight.gov/sites/default/files/oig-reports/OIG_Report_15-06_Lender_Service_Providers.pdf).  
21 13 C.F.R. §§ 103.3, 120.1500 (2022). 
22 Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection 
Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (interim final rule). 
23  Department of the Treasury, Paycheck Protection Program (PPP) Information Sheet Lenders (online at 
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf) (accessed Oct. 
27, 2022). 
24 Id. 
25 Big Banks Generated Billions in PPP Fees, Miami Herald (Dec. 3, 2020) (online at 
https://miamiherald.com/news/coronavirus/article247562870.html). 
26 Small Business Administration, SBA Procedural Notice (Feb. 8, 2021) (online at 
www.sba.gov/sites/default/files/2021-02/Procedural%20Notice%205000-20091%20-
%202nd%20Updated%20PPP%20Processing%20Fee%20and%201502%20Reporting.pdf). 
27 Id. 
28 Id. 
29 RegTech Consulting LLC, PPP Round 2 – Why Will It Cost $6 Billion More Than Round 1? (Mar. 31, 
2021) (online at https://regtechconsulting.net/general-business-risk-and-life/ppp-round-2-why-will-it-cost-6-billion-
more-than-round-1/). 
30 Id. 
31 Brookings Institution, Congressional Oversight of the CARES Act Could Prove Troublesome (Apr. 15, 
2020) (online at https://brookings.edu/blog/fixgov/2020/04/15/congressional-oversight-of-the-cares-act-could-
prove-troublesome/). 
32 Trump Pushes Back Against Congressional Oversight for $500 Billion Bailout Fund, CNBC (Mar. 28, 
2020) (online at https://cnbc.com/2020/03/28/trump-pushes-back-against-congressional-oversight-for-500-billion-
bailout-fund.html). 
33 “Biggest Fraud in a Generation”: The Looting of the Covid Relief Plan Known as PPP, CNBC (Mar. 28, 
2022) (online at https://nbcnews.com/politics/justice-department/biggest-fraud-generation-looting-covid-relief-
program-known-ppp-n1279664); Congressional Research Service, Presidential Objections to Special Investigator 
General for Pandemic Recovery Reporting Requirements (May 12, 2020) (LSB10463) (online at 
https://crsreports.congress.gov/product/pdf/LSB/LSB10463); The White House, Statement by the President (Mar. 
27, 2020) (online at https://web.archive.org/web/20200401135001/https:/www.whitehouse.gov/briefings-
statements/statement-by-the-president-38/).  
 
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34 Small Business Administration, Office of Inspector General, White Paper:  Risk Awareness and Lessons 
Learned from Prior Audits of Economic Stimulus Loans (Apr. 3, 2020) (Rept. No. 20-11) (online at 
https://sba.gov/sites/default/files/2020-04/SBA_OIG_WhitePaper_20-11_508.pdf). 
35 Id. 
36 Inspectors General Warn That Trump Administration Is Blocking Scrutiny of Coronavirus Rescue 
Programs, Washington Post (June 15, 2020) (online at www.washingtonpost.com/business/2020/06/15/inspector-
general-oversight-mnuchin-cares-act/).  
37 Id. 
38 Members of Congress Took Small-Business Loans – and the Full Extent Is Unknown, Politico (June 16, 
2020) (online at www.politico.com/news/2020/06/16/congress-small-business-loan-320625).  
39 Id.  
40 Senator Marco Rubio, Op-Ed: The Data Is Clear – the Paycheck Protection Program Is a Success, 
CNBC (Dec. 10, 2020) (online at https://cnbc.com/2020/12/10/marco-rubio-op-ed-the-paycheck-protection-
program-is-a-success.html). 
41 Democrats’ PPP Disclosure Bill Fails Senate Vote, Credit Union Times (May 6, 2020) (online at 
https://cutimes.com/2020/05/06/democrats-ppp-disclosure-bill-fails-senate-vote-413-
167916/?slreturn=20221022104419). 
42 Small Business Administration, Office of Inspector General, SBA’s Handling of Potentially Fraudulent 
Paycheck Protection Program Loans (May 26, 2022) (Rept. No. 22-13) (online at 
https://oversight.gov/sites/default/files/oig-reports/SBA/SBA-OIG-Report-22-13.pdf). 
43 Government Accountability Office, Report to the Congress:  COVID-19 – Opportunities to Improve 
Federal Response and Recovery Efforts (June 2020) (GAO-20-625) (online at https://gao.gov/assets/gao-20-
625.pdf). 
44 Id. 
45 Id. 
46 Id. 
47 Id. 
48 Id. 
49 Id. 
50 Id. 
51 Memorandum from Majority Staff to Members of the Select Subcommittee on the Coronavirus Crisis, 
Preliminary Analysis of Paycheck Protection Program Data (Sept. 1, 2020) (online at 
https://coronavirus.house.gov/sites/democrats.coronavirus.house.gov/files/2020-09-
01.PPP%20Interim%20Report.pdf). 
52 Government Accountability Office, COVID-19:  Urgent Actions Needed to Better Ensure an Effective 
Federal Response (Nov. 30, 2020) (GAO-21-191) (online at https://files.gao.gov/reports/GAO-21-191/index.html). 
53 Government Accountability Office, Report to Congressional Committees:  COVID-19 – Critical Vaccine 
Distribution, Supply Chain, Program Integrity, and Other Challenges Require Focused Federal Attention (Jan. 2021) 
(GAO-21-265) (online at https://gao.gov/assets/gao-21-265.pdf). 
54 Id. 
 
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55 Government Accountability Office, Report to Congressional Addressees:  Paycheck Protection Program 
– SBA Added Program Safeguards, But Additional Actions Are Needed (July 2021) (GAO-21-577) (online at 
https://gao.gov/assets/gao-21-577.pdf). 
56 Video: SBA Inspector General Hannibal Ware Discusses COVID Relief Fraud, Pursuit Magazine (Nov. 
24, 2020) (online at https://pursuitmag.com/hannibal-ware-discusses-covid-loan-fraud/). 
57 Id. 
58 Banks Report Record Spike in Fraud as U.S. Business-Aid Flows, Bloomberg (Sept. 24, 2020) (online at 
https://bloomberg.com/news/articles/2020-09-24/banks-report-record-spike-in-fraud-as-u-s-business-aid-flows). 
59 Id. 
60 Project on Government Oversight, Spike in Suspected Business Loan Fraud Reports Coincided with 
Paycheck Protection Program (Sept. 20, 2020) (online at https://pogo.org/investigation/2020/09/spike-in-suspected-
business-loan-fraud-reports-coincided-with-paycheck-protection-program). 
61 Project on Government Oversight, The Great Pandemic Swindle:  Feds Botched Review of Billions in 
Suspect PPP Loans (Oct. 6, 2022) (online at https://pogo.org/investigation/2022/10/the-great-pandemic-swindle-
feds-botched-review-of-billions-in-suspect-ppp-loans). 
62 Id. 
63 Id. 
64 Id. 
65 John M. Griffin, Samuel Kruger, and Prateek Mahajan, Did FinTech Lenders Facilitate PPP 
Fraud?, Journal of Finance, Forthcoming (Aug. 15, 2022) (online at http://dx.doi.org/10.2139/ssrn.3906395). 
66 Id. 
67 Pair Is Arrested on First Fraud Charges Tied to Small-Business Loan Program, New York Times (May 
5, 2020) (online at https://nytimes.com/2020/05/05/us/politics/virus-fraud-justice-department.html). 
68 Email from Staff, Department of Justice, to Majority Staff, Select Subcommittee on the Coronavirus 
Crisis (Oct. 9, 2022).  
69 Id.  
70 The Start-Up Enemies of Wall Street Are Booming, New York Times (Mar. 29, 2021) (online at 
https://nytimes.com/2021/03/29/technology/fintech-startups-wall-street.html); What Are Fintechs and How Can 
They Help Small Business?, New York Times (June 10, 2020) (online at 
https://nytimes.com/2020/06/10/business/economy/fintechs-loan-small-business.html). 
71 Federal Reserve Bank of St. Louis, Regulating Fintech:  One Size Does Not Fit All (Feb. 24, 2021) 
(online at https://stlouisfed.org/on-the-economy/2021/february/regulating-fintech-one-size-does-not-fit-
all#:~:text=Fintech%20Regulation%20101,agency%20that%20oversees%20fintech%20companies). 
72 Id. 
73 Id. 
74 The Start-Up Enemies of Wall Street Are Booming, New York Times (Mar. 29, 2021) (online at 
https://nytimes.com/2021/03/29/technology/fintech-startups-wall-street.html); What Are Fintechs and How Can 
They Help Small Business?, New York Times (June 10, 2020) (online at 
https://nytimes.com/2020/06/10/business/economy/fintechs-loan-small-business.html). 
75 The Fintech Revolution Is Here. Can It Help Build a Better Economy?, Forbes (Feb. 22, 2019) (online at 
https://forbes.com/sites/jenniferpryce/2019/02/22/the-fintech-revolution-is-here-can-it-build-a-better-
economy/?sh=2e1d5d875fda). 
 
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76 Department of the Treasury, Office of the Comptroller of the Currency, Acting Comptroller of the 
Currency Michael J. Hsu Remarks at the TCH + BPI Annual Conference, “Safeguarding Trust in Banking:  An 
Update” (Sept. 7, 2022) (online at https://occ.gov/news-issuances/speeches/2022/pub-speech-2022-106.pdf). 
77 World Bank, 2020 Global COVID-19 FinTech Market Rapid Assessment Study (Dec. 3, 2020) (online at 
www.worldbank.org/en/news/press-release/2020/12/03/fintech-market-reports-rapid-growth-during-covid-19-
pandemic). 
78 Financial Innovation Now, FIN Calls on Congress to Help Small Businesses ASAP – Use Speedy 
Alternative Lenders to Distribute Stimulus Loans (Mar. 19, 2020) (online at 
http://web.archive.org/web/20220523145910/https://financialinnovationnow.org/2020/03/19/fin-calls-on-congress-
to-help-small-businesses-asap-use-speedy-alternative-lenders-to-distribute-stimulus-loans/). 
79 Id. 
80 Innovative Lending Platform Association, Government Must Do More to Ensure Small Business Access 
to Capital During Crisis (online at https://innovativelending.org/government-must-do-more-to-ensure-small-
business-access-to-capital-during-crisis/) (accessed Oct. 7, 2022). 
81 Id. 
82 Lending Startups Are Angling for New Business from the COVID-19 Bailout, TechCrunch (Apr. 2, 2020) 
(online at https://techcrunch.com/2020/04/02/lending-startups-are-angling-for-new-business-from-the-covid-19-
bailout/). 
83 PayPal, Square Start Lending to Small Businesses Hurt by Virus, Bloomberg (Apr. 14, 2020) (online at 
https://bloomberg.com/news/articles/2020-04-14/paypal-square-start-lending-to-small-businesses-hurt-by-
virus#xj4y7vzkg); Lendistry Receives Capital from Goldman Sachs to Provide PPP Loans to Underserved 
Businesses, Doubles Footprint to 12 States, GlobeNewswire (Apr. 23, 2020) (online at 
https://globenewswire.com/en/news-release/2020/04/23/2021007/0/en/Lendistry-Receives-Capital-From-Goldman-
Sachs-To-Provide-PPP-Loans-To-Underserved-Businesses-Doubles-Footprint-To-12-States.html); Magic Johnson 
Offering $100 Million in Loans to Minority-Owned Businesses Left Out of PPP Loans, CNBC (May 19, 2020) 
(online at https://cnbc.com/2020/05/19/magic-johnson-offering-100-million-in-loans-to-minority-owned-
businesses.html); Bluevine, Bluevine Approved as Direct Lender for Paycheck Protection Program (online at 
https://bluevine.com/newsroom/bluevine-becomes-direct-lender-for-ppp/) (accessed Oct. 7, 2022); Kabbage, 
Kabbage Partners with SBA-Authorized Bank to Deliver Paycheck Protection Program Loans to Small Businesses 
(Apr. 7, 2020) (online at https://newsroom.kabbage.com/news/kabbage-partners-with-sba-authorized-bank-to-
deliver-paycheck-protection-program-loans-to-small-businesses/); Celtic Bank, Utah-Based SBA Lender Celtic Bank 
Punches Above Its Weight with $2.5 Billion in PPP Funding (Dec. 21, 2020) (online at 
https://celticbank.com/releases/celtic-ppp-funding); Cross River Bank, Press Release:  Cross River One of Top 
Paycheck Protection Program (PPP) Lenders in the Country (June 9, 2020) (online at https://crossriver.com/cross-
river-one-top-paycheck-protection-program-ppp-lenders-country). 
84 Capital Plus Financial Partners with Blueacorn to Expedite PPP Loan Relief to Small Businesses, 
Cision PR Newswire (Jan. 11, 2021) (online at https://prnewswire.com/news-releases/capital-plus-financial-
partners-with-blueacorn-to-expedite-ppp-loan-relief-to-small-businesses-301204999.html); Womply, Womply 
Launches PPP Fast Lane to Help Under-Served Businesses Access the Paycheck Protection Program (PPP) (Feb. 
23, 2021) (online at https://womply.com/press/womply-launches-ppp-fast-lane-to-help-under-served-businesses-
access-the-paycheck-protection-program-ppp/) (This link now redirects to Solo Global’s website.). 
85 Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals Through 
5/31/2021 (May 31, 2021) (online at https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-
508.pdf). 
86 Id. 
87 Id. 
 
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88 Innovative Lending Platform Association, ILPA Applauds Confirmation of New SBA Administrator (Mar. 
16, 2021) (online at https://innovativelending.org/ilpa-applauds-confirmation-of-new-sba-administrator/). 
89 Fintech Lenders Are Critical to Small Businesses Accessing PPP, The Hill (June 24, 2021) (online at 
https://thehill.com/opinion/finance/560133-fintech-lenders-are-critical-to-small-businesses-accessing-ppp/). 
90 Id. 
91 Call between Staff, Small Business Administration, Office of Inspector General, and Majority Staff, 
Select Subcommittee on the Coronavirus Crisis (May 5, 2022). 
92 PPP Scammers Made Fintech Companies Their Lenders of Choice, Bloomberg (Oct. 7, 2020) (online at 
https://bloomberg.com/news/articles/2020-10-07/ppp-loans-scammers-used-fintech-companies-to-carry-out-
fraud?leadSource=uverify%20wall#xj4y7vzkg). 
93 Lamborghinis, Strip Clubs, Bogus Companies, and Lies, Project on Government Oversight (Oct. 8, 2020) 
(online at https://pogo.org/investigation/2020/10/lamborghinis-strip-clubs-bogus-companies-and-lies). 
94 15% of Paycheck Protection Program Loans Could Be Fraudulent, Study Shows, New York Times (Oct. 
11, 2021) (online at https://nytimes.com/2021/08/17/business/ppp-fraud-covid.html); John M. Griffin, Samuel 
Kruger, and Prateek Mahajan, Did FinTech Lenders Facilitate PPP Fraud?, Journal of Finance, Forthcoming (Aug. 
15, 2022) (online at http://dx.doi.org/10.2139/ssrn.3906395). 
95 John M. Griffin, Samuel Kruger, and Prateek Mahajan, Did FinTech Lenders Facilitate PPP Fraud?, 
Journal of Finance, Forthcoming (Aug. 15, 2022) (online at http://dx.doi.org/10.2139/ssrn.3906395). 
96 Id. 
97 Id. 
98 Id. 
99 Id. 
100 Select Subcommittee on the Coronavirus Crisis, Press Release:  Select Subcommittee Launches 
Investigation into Role of FinTech Industry In PPP Fraud (May 28, 2021) (online at 
https://coronavirus.house.gov/news/press-releases/select-subcommittee-launches-investigation-role-fintech-industry-
ppp-fraud). 
101 Select Subcommittee on the Coronavirus Crisis, Press Release:  Select Subcommittee Expands 
Investigation Into Role of FinTech Industry In PPP Fraud (Nov. 23, 2021) (online at 
https://coronavirus.house.gov/news/press-releases/select-subcommittee-expands-investigation-role-fintech-industry-
ppp-fraud); John M. Griffin, Samuel Kruger, and Prateek Mahajan, Did FinTech Lenders Facilitate PPP 
Fraud?, Journal of Finance, Forthcoming (Aug. 15, 2022) (online at http://dx.doi.org/10.2139/ssrn.3906395). 
 102 Email from Chief Risk Officer, Cross River Bank, to Staff, Cross River Bank (Apr. 3, 2020) 
(CRB_Subcom_0003205-07).  
103 Email from Chief Executive Officer, Celtic Bank, to President and Chief Operating Officer, Celtic Bank 
(Oct. 30, 2020) (Celtic_SSCC_001179-80).  
104 Email from BSA Officer, Celtic Bank, to Chief Risk Officer and Senior Compliance Manager, Celtic 
Bank (Nov. 5, 2020) (Celtic_SSCC_001350-51).  
105 Email from Vice President - Compliance, Celtic Bank, to Staff, Celtic Bank and Bluevine Inc. (Mar. 30, 
2021) (BV_SSCC_0001028-30). 
106 Email from President/Chief Operating Officer, Celtic Bank, to President, Utah Bank, (Aug. 12, 2020) 
(Celtic_SSCC_001393-95).  
107 Email from Head of Policy, Kabbage, Inc., to Head of Capital Markets, Kabbage, Inc. (July 18, 2020) 
(AMEX-SSCC-00020140-45).  
 
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108 Letter from Head of Policy, Kabbage, Inc., to Staff, Kabbage, Inc. (Sept. 8, 2020) (AMEX-SSCC-
00020045-47).  
109 Slack Messages between Staff, Kabbage, Inc. (July 16, 2020) (AMEX-SSCC-00019821-25). 
110 Id. 
111  Email from Chief Executive Officer, Celtic Bank, to Staff, Celtic Bank (May 8, 2020) 
(Celtic_SSCC_001189-91). 
112 Email from Bernie Navarro, Founder and President, Benworth Capital Partners, LLC to Toby Scammell, 
Founder and Chief Executive Officer, Womply (May 7, 2021) (BWSSCCResp0000038-42). 
113 Email from Head of Policy, Kabbage, Inc. (Sept. 30, 2020) (AMEX-SSCC-00017302-04). 
114 Email from President and Chief Operating Officer, Celtic Bank, to President, Utah Bankers Association 
(Aug. 12, 2020) (Celtic_SSCC_001393-95). 
115 Blueacorn, Blueacorn’s Role in PPP (online at https://blueacorn.co/about-ppp/) (accessed Nov. 14, 
2022); How Two Start-ups Reaped Billions in Fees on Small Business Relief Loans, N.Y. Times (June 27, 2021) 
(online at www.nytimes.com/2021/06/27/business/ppp-relief-loans-blueacorn-womply.html). 
116 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Mar. 25, 2022).  Blueacorn engaged a second compliance consultant, Everett Advisors, that 
worked with Elev8 Advisors.  Everett Advisors reviewed training and guidance materials and created an AML/BSA 
training presentation.  Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (February 4, 2022); Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select 
Subcommittee on the Coronavirus Crisis (June 30, 2022). 
117 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022).  
118 Blueacorn Pitch Deck Provided to Capital Plus Financial (SSCC-CPF-0000457-65); Blueacorn Pitch 
Deck Customized for Prestamos CDFI (PRE-0000119-58). 
119 Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals Through 
5/31/2021 (May 31, 2021) (https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-508.pdf) (Capital 
Plus and Prestamos issued 472,036 and 494,415 PPP loans in 2021 for a total of $15,258,132,373 in PPP loans); 
Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Apr. 
25, 2022) (approximately 434,000 loans processed by Prestamos were originated through the Blueacorn platform 
between April 14, 2021 and the end of round three in June 2021); Email from Counsel, Capital Plus Financial LLC, 
to Majority Staff, Select Subcommittee on the Coronavirus Crisis (July 22, 2022) (Blueacorn submitted a total of 
521,221 loan applications to the SBA on behalf of Capital Plus.) 
120 Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals Through 
5/31/2021  (May 31, 2021) (online at https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-
508.pdf). 
121 Id. 
122 Email from Counsel, Capital Plus Financial LLC, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022) (“Capital Plus relied on Blueacorn’s technological solutions to determine 
borrower eligibility and combat fraud efficiently and at scale.”); Letter from Prestamos CDFI to Chairman James E. 
Clyburn, Select Subcommittee on the Coronavirus Crisis (Apr. 25, 2022) (“Prestamos CDFI recognized it did not 
have the capability to process PPP applications at scale, but Blueacorn’s PPP platform could, by integrating multiple 
layers of well-established fraud detection and prevention tools and artificial intelligence (‘AI’) capabilities, as 
detailed in Blueacorn’s marketing materials, policies, and procedures[.]”). 
123 Blueacorn Group January 1, 2021 – February 28, 2022, Simplified Cash Flow Statement (BA-SSCC-
0000121-22). 
 
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124 Call between Staff, Small Business Administration, Office of Inspector General, and Majority Staff, 
Select Subcommittee on the Coronavirus Crisis (May 5, 2022). 
125 Florida drug dealers received PPP loans, many from a Blueacorn lending partner, for non-existent 
businesses.  According to local police, “[o]ne of the reasons they were able to fund their [drug] operation was 
because they were using these [PPP] loans from the government that they had received fraudulently.” COVID Relief 
Cash Funded Florida Drug Dealers Day to Day Operations:  Police, Newsweek (Nov. 17, 2021) (online at 
https://newsweek.com/covid-relief-cash-funded-florida-drug-dealers-day-day-operations-police-1650453); 
FederalPay.org, PPP Loan Data – Kenneth Davis Jr., Saint Petersburg, FL (online at 
https://federalpay.org/paycheck-protection-program/kenneth-davis-jr-saint-petersburg-fl) (accessed Nov. 27, 2022); 
FederalPay.org, PPP Loan Data – Dante Payne, Saint Peterburg, FL (online at  https://federalpay.org/paycheck-
protection-program/dante-payne-saint-petersburg-fl) (accessed Nov. 27, 2022). Loans were issued by Blueacorn 
partners to an ineligible gang member and to an individual who, during the time that he claimed to run an eligible 
business, was in fact incarcerated for money laundering and drug dealing. Fraudster Who Bilked $131K in COVID-
19 Benefits Sent to Prison, Times Union (July 25, 2022) (online at https://timesunion.com/news/article/Fraudster-
who-bilked-131K-in-COVID-19-benefits-17326950.php); FederalPay.org, PPP Loan Data – Hector Sanchez, 
Rensselaer, NY (online at https://federalpay.org/paycheck-protection-program/hector-sanchez-rensselaer-ny) 
(accessed Nov. 27, 2022); Mobile Murder Suspect Pleads Guilty to Committing PPP Loan Fraud, Advance Local 
(Mar. 2, 2022) (online at https://al.com/news/mobile/2022/03/mobile-murder-suspect-pleads-guilty-in-connection-
with-ppp-loan-fraud.html); FederalPay.org, PPP Loan Data – Demetrius Richardson, Mobile, AL (online at 
https://federalpay.org/paycheck-protection-program/demetrius-richardson-mobile-al) (accessed Nov. 27, 2022). 
126 They Promised Quick and Easy PPP Loans. Often, They Only Delivered Hassle and Heartache, 
ProPublica (Jan. 14, 2022) (online at https://propublica.org/article/they-promised-quick-and-easy-ppp-loans-often-
they-only-delivered-hassle-and-heartache). 
127 See, e.g., Facebook, Blueacorn (Apr. 22, 2021) (online at 
www.facebook.com/blueacornco/posts/pfbid0svrpDueZjCvK1KmvPKttquMKPwrao8r2V5jxgZxgfoYLvgKaFtYkH
fRdnZUrbtE8l?__cft__[0]=AZUeCMqsCH7amSOetcA8qmiW5WOo9sOts8pUWldZ54PKsqBctibFg8KswdQVp2E
v2y0azP9qxJJ67kQHwgkEzyV-qIqmoBMlT_m2lbkesDp9rravbu8UWqvw1eY7Ns_4U131f-
GFheOuZuUxaA7c9td0fLY35xOmfUjMn_uwVcYVTF0En-74QMMuJCi1nns4Ra0HvePgoYC0TDF-
hL4kf7W6&__tn__=%2CO%2CP-R). 
128 Blueacorn Group January 1, 2021 – February 28, 2022, Simplified Cash Flow Statement (BA-SSCC-
0000121-22). 
129 Blueacorn, Blueacorn’s Role in PPP (online at https://blueacorn.co/about-ppp/) (accessed June 6, 2022). 
130 Blueacorn, Sobre Nostros (online at https://blueacorn.co/sobre-nosotros/) (accessed Nov. 14, 2022); 
Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis 
(Feb. 4, 2022); LinkedIn, Nate Reis (online at https://linkedin.com/in/nathanreis/) (accessed Nov. 15, 2022). 
131 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Feb. 4, 2022); Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the 
Coronavirus Crisis (Aug. 3, 2022). 
132 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022). 
133 Blueacorn, Blueacorn’s Role in PPP (online at https://blueacorn.co/about-ppp/) (accessed June 6, 2022). 
134 Id. 
135 Federal Reserve Board, Federal Reserve Statistical Release:  Large Commercial Banks (June 30, 2022) 
(online at https:/federalreserve.gov/releases/lbr/current/); JP Morgan Chase issued 158,345 PPP loans in 2021 
totaling over $12.1 billion. Small Business Administration, Paycheck Protection Program (PPP) Report – 
Approvals Through 5/31/2021 (May 31, 2021) (online at https://sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf).  
 
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136 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Dec. 23, 2021). 
137 Lender Service Provider Agreement Between Capital Plus Financial LLC and FIN CAP, INC. (Oct. 23, 
2020) (BA-SSCC-0000026-40).  According to Blueacorn, the fintech entered into the Capital Plus LSPA through its 
wholly-owned subsidiary, Fin Cap, Inc. The original Capital Plus LSPA was executed in January 2021, with an 
effective date of October 23, 2020, and was updated in February 2021. Letter from Blueacorn PPP, LLC to 
Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Jan. 12, 2022). 
138 Lender Service Provider Agreement Between Capital Plus Financial LLC and FIN CAP, INC. (Oct. 23, 
2020) (BA-SSCC-0000026-40); According to Blueacorn, the fintech entered into the Capital Plus LSPA through its 
wholly-owned subsidiary, Fin Cap, Inc. The original Capital Plus LSPA was executed in January 2021, with an 
effective date of October 23, 2020, and was updated in February 2021. Letter from Blueacorn PPP, LLC, to 
Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Jan. 12, 2022). 
139 Lender Service Provider Agreement Between Prestamos CDFI, LLC and BA PPP Fin, LLC (Apr. 14, 
2021) (BA-SSCC-0000001-15). 
140 See, e.g., Blueacorn Pitch Deck Customized for Prestamos CDFI (PRE-0000119-58). 
141 Blueacorn Pitch Deck Provided to Capital Plus Financial (SSCC-CPF-0000457-65). 
142 Id. 
143 Id. 
144 Blueacorn Pitch Deck Customized for Prestamos CDFI (PRE-0000119-58). 
145 Id. 
146 Call between Staff, Prestamos CDFI, and Staff, Select Subcommittee on the Coronavirus Crisis (Mar. 
31, 2022). 
147 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Dec. 23, 2021).  
148 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Jan. 12, 2022).  
149 Anchor, Sessions by Monster Chats, Episode #25 - The Paycheck Protection Program with Stephanie 
Hockridge Reis (online at https://anchor.fm/sessions-monster-chats/episodes/Episode-25---The-Paycheck-
Protection-Program-with-Stephanie-Hockridge-Reis-eedc2s).  
150 Id. 
151 Are PPP Loan Companies Legit? PPP Loans Are Being Aggressively (And I Suspect Deceptively) 
Marketed, Medium (Mar. 23, 2021) (online at https://medium.com/web-design-web-developer-magazine/are-ppp-
loan-companies-legit-ppp-loans-are-being-aggressively-and-i-suspect-deceptively-marketed-2fa99e7ec6fb). 
152 Blueacorn Group January 1, 2021 – February 28, 2022, Simplified Cash Flow Statement (BA-SSCC-
0000121-22). 
153 Id. 
154 In a letter to the Select Subcommittee, Blueacorn described the fee structure with its partners: 
“Blueacorn’s compensation from Capital Plus consisted of: (i) an initial 20% share of SBA fees received by Capital 
Plus for each loan (with 50% of this amount held back until the borrower applied for SBA forgiveness for the 
underlying loan), which compensated Blueacorn for the amount that Blueacorn paid marketers to advertise on the 
internet; and (ii) 41% of the remaining SBA fees (and 8% for two of Blueacorn’s initial founders, who had since 
exited), which, among other things, compensated Blueacorn for its various operating costs and expenses (including 
personnel costs for the application review process, expenses related to technological development, costs associated 
with the provision of customer support for borrowers, and other technology costs such as DocuSign). . . . Blueacorn 
 
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earned 70% of the SBA fees received by Prestamos for each loan, with 10% of Blueacorn’s share held back until the 
borrower either completed a forgiveness application or the loan matured. Although not broken out into a separate 
reimbursement item as it was in the Capital Plus LSPA, this arrangement similarly compensated Blueacorn for its 
expense of paying the entire cost associated with marketing on the internet, along with all of the other operating 
costs and expenses associated with Blueacorn’s various responsibilities.” Letter from Blueacorn PPP, LLC to 
Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Jan. 12, 2022).  See also Lender 
Service Provider Agreement Between Prestamos CDFI, LLC and BA PPP Fin, LLC (Apr. 14, 2021) (BA-SSCC-
0000001-15); Lender Service Provider Agreement Between Capital Plus Financial LLC and FIN CAP, INC. (Oct. 
23, 2020) (BA-SSCC-0000026-40).   
155 Text messages communications from Nate Reis provided to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
156 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000631). 
157 Barry Calhoun, Interview of Michael Faulkender (June 21, 2022) (online at 
https://medium.com/@barry_calhoun). 
158 Jimmy Flores (@JimmyMFlores), Twitter (Apr. 26, 2020) (online at 
https://twitter.com/JimmyMFlores/status/1254548298683215873). 
159 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000614). 
160 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis; Conversation with former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis; Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on 
the Coronavirus Crisis; Letter from Blueacorn PPP, LLC, to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (June 6, 2022). 
161 Letter from Blueacorn PPP, LLC, to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 6, 2022); LinkedIn, Jack Snyder (online at https://linkedin.com/in/jack-snyder-57852268/) 
(accessed Nov. 15, 2022); LinkedIn, Robert Conley (online at https://linkedin.com/in/robert-conley/) (accessed Nov. 
15, 2022). 
162 Blueacorn Pitch Deck Provided to Capital Plus Financial (SSCC-CPF-0000457-65). 
163 LinkedIn, Jack Snyder (online at https://linkedin.com/in/jack-snyder-57852268/) (accessed Nov. 15, 
2022). 
164 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis; Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on 
the Coronavirus Crisis. 
165 LinkedIn, Robert Conley (online at https://linkedin.com/in/robert-conley/) (accessed June 7, 2022). 
166 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 6, 2022); LinkedIn, Robert Conley (online at https://linkedin.com/in/robert-conley/) 
(accessed June 7, 2022); LexisNexis Records for Robert Conley (accessed June 8, 2022). 
167 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Sept. 9, 2022).  
168 Id.  
169 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Jan. 12, 2022). 
170 Id. 
171 See Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Jan. 12, 2022). 
 
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172 Paycheck Protection Program Loan Forgiveness Application Form 3508S for Adam Spencer (Aug. 25, 
2021) (PRE-0000413-16). 
173 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022). 
174 Id. 
175 Id. 
176 Id. 
177 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
178 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022). 
179 Id. 
180 Id. 
181 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
182 Id. 
183 Slack Messages Between Blueacorn IT employee and Kristen Spencer (ELEV8_00000585). 
184 Complaint from former Blueacorn employee to Small Business Administration, Office of Inspector 
General (Complaint No. 20210331k636); Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the 
Coronavirus Crisis (Aug. 3, 2022). 
185 Complaint from former Blueacorn employee to Small Business Administration, Office of Inspector 
General (Complaint No. 20210331k636). 
186 Underwriting History for Paycheck Protection Program First Draw Loan (BA-PSI-0005456-7) (Showing 
the Spencers’ son as an “underwriter”); Email from Adam Spencer to Adam Spencer (Apr. 5, 2021) 
(ELEV8_00000011-13) (A welcome email from Adam Spencer to Elev8 Advisors reviewers sent to relatives Craig 
Owensby, Heather Owensby, Jane Owensby, Jordan Spencer, and Jarred Spencer). 
187 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
188 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000626, 
ELEV8_00000666). 
189 Blueacorn Group January 1, 2021 – February 28, 2022, Simplified Cash Flow Statement (BA-SSCC-
0000121-22). 
190 Id.; Complaint, Fin Cap Inc. and Blueacorn PPP, LLC v. Pay Nerd LLC and PayNerdier LLC, No. 
N21C-12-118 AML (Del. Super. Ct. 2022) (BA-SSCC-0000089-120); Blueacorn Pitch Deck Customized for 
Prestamos CDFI (PRE-0000119-58). 
191 Blueacorn Group January 1, 2021 – February 28, 2022, Simplified Cash Flow Statement (BA-SSCC-
0000121-22). 
192 Id. 
193 Id. 
194 Id. 
 
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195 Id. PPP applicants waiting for emergency funds reported that customer service representatives, even 
when reachable, gave out incorrect and inconsistent information or did not follow through with promised actions.  
At one point, Blueacorn was so inundated with complaints on its Facebook portal that the company shut down its 
Facebook Comments section altogether as it could not handle the inflow of complaints.  Blueacorn made a 
“promise[] to do better,” yet the company’s internal financial statements show that it never allocated the funding 
necessary to properly resource its customer service apparatus. Facebook, Blueacorn (Apr. 22, 2021) (online at 
www.facebook.com/blueacornco/posts/pfbid0svrpDueZjCvK1KmvPKttquMKPwrao8r2V5jxgZxgfoYLvgKaFtYkH
fRdnZUrbtE8l?__cft__[0]=AZUeCMqsCH7amSOetcA8qmiW5WOo9sOts8pUWldZ54PKsqBctibFg8KswdQVp2E
v2y0azP9qxJJ67kQHwgkEzyV-qIqmoBMlT_m2lbkesDp9rravbu8UWqvw1eY7Ns_4U131f-
GFheOuZuUxaA7c9td0fLY35xOmfUjMn_uwVcYVTF0En-74QMMuJCi1nns4Ra0HvePgoYC0TDF-
hL4kf7W6&__tn__=%2CO%2CP-R); They Promised Quick and Easy PPP Loans. Often, They Only Delivered 
Hassle and Heartache, ProPublica (Jan. 14, 2022) (online at https://propublica.org/article/they-promised-quick-and-
easy-ppp-loans-often-they-only-delivered-hassle-and-heartache). 
196 Id. 
197 Email from Adam Spencer, Elev8 Advisors Group, to Barry Calhoun, Matt Yahes, and Noah Spirakus, 
Blueacorn PPP, LLC (Apr. 15, 2021) (ELEV8_00000210-12). 
198 Id. 
199 Excerpts of the Operating Agreement of Blueacorn PPP, LLC (May 26, 2021) (online at XXX). 
200 Video and Geolocation Data of Nate Reis (Dec. 12, 2021) obtained by Majority Staff, Select 
Subcommittee on the Coronavirus Crisis. 
201 Open Corporates, Lender Service Consultants, LLC (online at 
https://opencorporates.com/companies/pr/464827-1511) (accessed Nov. 15, 2022).  
202 Video and Geolocation Data of Nate Reis, dated Oct. 8, 2021, obtained by Majority Staff, Select 
Subcommittee on the Coronavirus Crisis. 
203 Text messages communications obtained by Majority Staff, Select Subcommittee on the Coronavirus 
Crisis 
204 Id. 
205 Id. 
206 Complaint from former Blueacorn employee to Small Business Administration, Office of Inspector 
General (Complaint No. 20210331k636). 
207 Id. 
208 Id. 
209 Id. 
210 Id. 
211 Id. 
212 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
213 Id. 
214 Id. 
215 Id. 
216 Id. 
 
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217 Id. 
218 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
219 Id. 
220 Id. 
221 Id. 
222 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
223 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
224 Id. 
225 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
226 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (May 12, 2022); Blueacorn, Paycheck Protection Program Loan Processing Script (BA-PSI-
0011447). 
227 Blueacorn, Paycheck Protection Program Loan Processing Script (BA-PSI-0011447). 
228 Id. 
229 Id. 
230 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 6, 2022). 
231 Id. 
232 Id. 
233 Blueacorn, Paycheck Protection Program Loan Processing Script (BA-PSI-0011447). 
234 Id. 
235 Id. 
236 Id. 
237 Id. 
238 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 6, 2022). 
239 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022); Blueacorn, Paycheck Protection Program Loan Processing Script (BA-PSI-
0011447). 
240 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022). 
241 Slack Messages Between Blueacorn IT Employee and Kristen Spencer (ELEV8_00000581). 
242 Id. 
243 Slack Messages Between Blueacorn IT Employee and Kristen Spencer (ELEV8_00000614). 
 
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244 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
245 Text messages communications obtained by Majority Staff, Select Subcommittee on the Coronavirus 
Crisis. 
246 Email from President, Business Warrior, to Matt Yahes, Blueacorn PPP, LLC (ELEV8_00000039-41). 
247 Emails between President, Business Warrior, Matt Yahes, Chief Operating Officer, and Noah Spirakus, 
Founder, Blueacorn PPP, LLC (ELEV8_00000039-41); Emails between President, Business Warrior, Matt Yahes, 
Chief Operating Officer, and Noah Spirakus, Founder, Blueacorn PPP, LLC (ELEV8_00000125-27). 
248 Email from President, Business Warrior, to Matt Yahes, Blueacorn PPP, LLC (ELEV8_00000039-41). 
249 Blueacorn, Blueacorn Helps Process Over $14 billion in Loans Throughout the Paycheck Protection 
Program (online at https://blueacorn.co/2022/05/25/blueacorn-helps-process-over-14-billion-in-loans-throughout-
the-paycheck-protection-program) (accessed June 6, 2022). 
250 Blueacorn Pitch Deck Customized for Prestamos CDFI (PRE-0000119-58). 
251 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 6, 2022). 
252 Id. 
253 Id. 
254 Id. 
255 Select Subcommittee on the Coronavirus Crisis, Press Release:  New PPP Report Shows Trump 
Administration and Big Banks Left Behind Struggling Small Businesses (Oct. 16, 2020) (online at 
https://coronavirus.house.gov/news/press-releases/new-ppp-report-shows-trump-administration-and-big-banks-left-
behind-struggling). 
256 Id. 
257 Small Business Administration, Press Release:  SBA Prioritizes Smallest of Small Businesses in the 
Paycheck Protection Program (Feb. 22, 2021) (online at https://sba.gov/article/2021/feb/22/sba-prioritizes-smallest-
small-businesses-paycheck-protection-program). 
258 McGraw Hill, Two Start-Ups Stepped in When Big Lenders Wouldn’t for P.P.P. Loans (Aug. 2021) 
(online at https://mheducation.com/highered/ideas/articles/two-start-ups-stepped-in-when-big-lenders-wouldn-t-for-
p-p-p-loans). 
259 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000658). 
260 Id. 
261 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000656). 
262 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022); see also Email from Kristen Spencer, Director of Operations, Blueacorn PPP, LLC, to Adam Spencer, 
Managing Partner, Ele8 Advisors Group (Mar. 17, 2021) (ELEV8_00000091-92). 
263 Email from Kristen Spencer, Director of Operations, Blueacorn PPP, LLC, to Adam Spencer, Managing 
Partner, Ele8 Advisors Group (Mar. 17, 2021) (ELEV8_00000091-92). 
264 Reddit, Destiny Ligon Response to VIPPP Questions (accessed Nov. 16, 2022). 
265 Id. 
266 Id. 
267 Id. 
 
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268 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Sept. 8, 
2022). 
269 Id. 
270 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000658). 
271 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000717). 
272 Id. 
273 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000717). 
274 Id. 
275 Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection 
Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (interim final rule); Department of the Treasury, Paycheck Protection 
Program (PPP) Information Sheet Lenders (online at 
https://home.treasury.gov/system/files/136/PPP%20Lender%20Information%20Fact%20Sheet.pdf) (accessed Nov. 
15, 2022). 
276 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022); Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Sept. 8, 2022). 
277 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Sept. 8, 
2022). 
278 Id. 
279 Id. 
280 ProPublica - Tracking PPP, Nathan Reis (Apr. 27, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-3510607208); ProPublica - Tracking PPP, 
Nathan Reis (Jan. 26, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-
5993658309); ProPublica – Tracking PPP, Stephanie Hockridge (May 1, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-9174497307); ProPublica – Tracking 
PPP, Stephanie Hockridge (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-6291968406); ProPublica – Tracking 
PPP, Body Politix, LLC (June 24, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/body-
politix-llc-3391698009); ProPublica – Tracking PPP, Body Politix, LLC (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-6349828403); ProPublica – Tracking PPP, 
Juuice, Inc. (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-
9174317310); ProPublica – Tracking PPP, Juuice, Inc. (Feb. 12, 2021) (online at  
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-7467358410); ProPublica – PPP Tracking, 
Juuice, LLC (June 19, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-
9055237906); ProPublica – PPP Tracking, Juuice, LLC (Feb. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-8143118406); ProPublica – Tracking PPP, 
Elev8 Advisors Group LLC (June 30, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/elev8-advisors-group-llc-6824408003); ProPublica – 
Tracking PPP, Adam Spencer (July 16, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-4627438101); ProPublica – Tracking PPP, 
Adam Spencer (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-
6232778604); ProPublica – Tracking PPP, Kristen Spencer (Mar. 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-3090888602); ProPublica – Tracking PPP, 
Kristen Spencer (July 21, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-
6269958102); ProPublica – Tracking PPP, Jarred Spencer (Mar. 12, 2021) 
(https://projects.propublica.org/coronavirus/bailouts/loans/jarred-spencer-9383918501); ProPublica – Tracking PPP, 
Jordan Spencer (Mar. 15, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-
 
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2616498604); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); ProPublica – Tracking 
PPP, Sweet P Designs (May 21, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-
designs-4924429003); ProPublica – Tracking PPP, Rebecca Owensby (Mar. 25, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/rebecca-owensby-9150558608); ProPublica – Tracking 
PPP, Carmen Hartin (Mar. 13, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/carmen-
hartin-1688898600); ProPublica – Tracking PPP, Men’s Revival LLC (Mar. 17, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/men-s-revival-llc-3427758605); ProPublica – Tracking 
PPP, Lincoln Jore (Jan. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/lincoln-jore-
2361038309); ProPublica – Tracking PPP, Bluume LLC (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/bluume-llc-6430348507).  
281  ProPublica - Tracking PPP, Nathan Reis (Apr. 27, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-3510607208); ProPublica - Tracking PPP, 
Nathan Reis (Jan. 26, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-
5993658309); ProPublica – Tracking PPP, Stephanie Hockridge (May 1, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-9174497307); ProPublica – Tracking 
PPP, Stephanie Hockridge (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-6291968406); ProPublica – Tracking 
PPP, Body Politix, LLC (June 24, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/body-
politix-llc-3391698009); ProPublica – Tracking PPP, Body Politix, LLC (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-6349828403); ProPublica – Tracking PPP, 
Juuice, Inc. (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-
9174317310); ProPublica – Tracking PPP, Juuice, Inc. (Feb. 12, 2021) (online at  
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-7467358410); ProPublica – PPP Tracking, 
Juuice, LLC (Feb. 13, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-
8143118406); ProPublica – PPP Tracking, Juuice, LLC (June 19, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-9055237906). 
282 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
283 ProPublica - Tracking PPP, Nathan Reis (Jan. 26, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-5993658309 ); Paycheck Protection Program 
Second Draw Borrower Application Form for Nathan Reis (Feb. 5, 2021) (SSCC-CPF-00000058-64). 
284 ProPublica – PPP Tracking, Juuice, LLC (Feb. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-8143118406); Paycheck Protection Program 
Borrower Application Form for Juuice, LLC (Jan. 27, 2021) (PRE-0000479-84). 
285 ProPublica – Tracking PPP, Juuice, Inc. (Feb. 12, 2021) (online at  
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-7467358410); Juuice, INC Payroll Report Jan. 
1, 2020 – Dec. 31, 2020 (SSCC-CPF-00000197); Paycheck Protection Program Loan Forgiveness Application Form 
for Juuice, Inc. (Jan. 30, 2021) (CDC Response00040-52). 
286 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 30, 2022) (Providing Blueacorn files related to loans made to Nathan Reis and Juuice, 
Inc.); ProPublica – PPP Tracking, Juuice, LLC (Feb. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-8143118406). 
287 ProPublica – Tracking PPP, Stephanie Hockridge (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-6291968406); Paycheck Protection 
Program Borrower Application Form for Stephanie Hockridge (Feb. 5, 2021) (SSCC-CPF-00000150-56). 
288 Paycheck Protection Program Second Draw Borrower Application Form for Body Politix, LLC (Feb. 5, 
2021) (SSCC-CPF-00000162-68); ProPublica – Tracking PPP, Body Politix, LLC (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-6349828403). 
 
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289 Juuice, INC Payroll Report Jan. 1, 2020 – Dec. 31, 2020 (SSCC-CPF-00000197). 
290 ProPublica – Tracking PPP, Stephanie Hockridge (May 1, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-9174497307); ProPublica – Tracking 
PPP, Stephanie Hockridge (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-6291968406); ProPublica – Tracking 
PPP, Body Politix, LLC (June 24, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/body-
politix-llc-3391698009); ProPublica – Tracking PPP, Body Politix, LLC (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-6349828403); ProPublica – Tracking PPP, 
Juuice, Inc. (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-
9174317310); ProPublica – Tracking PPP, Juuice, Inc. (Feb. 12, 2021) (online at  
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-7467358410); ProPublica – PPP Tracking, 
Juuice, LLC (Feb. 13, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-
8143118406); Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 30, 2022). 
291 ProPublica – Tracking PPP, Nathan Reis (Apr. 27, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-3510607208); ProPublica – Tracking PPP, 
Nathan Reis (Jan. 26, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-
5993658309); ProPublica – Tracking PPP, Stephanie Hockridge (May 1, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-9174497307); ProPublica – Tracking 
PPP, Stephanie Hockridge (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-hockridge-6291968406); ProPublica – Tracking 
PPP, Body Politix, LLC (June 24, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/body-
politix-llc-3391698009); ProPublica – Tracking PPP, Body Politix, LLC (Feb. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-6349828403); ProPublica – Tracking PPP, 
Juuice, Inc. (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-
9174317310); ProPublica – Tracking PPP, Juuice, Inc. (Feb. 12, 2021) (online at  
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-7467358410); ProPublica – PPP Tracking, 
Juuice, LLC (Feb. 13, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-
8143118406); ProPublica – PPP Tracking, Juuice, LLC (June 19, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-9055237906). 
292 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42).  
293 ProPublica – Tracking PPP, Men’s Revival LLC (Mar. 17, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/men-s-revival-llc-3427758605); ProPublica – Tracking 
PPP, Lincoln Jore (Jan. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/lincoln-jore-
2361038309); Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42); 
Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis 
(July 22, 2022); Trendsetter to Know:  Lincoln Jore (Dec. 15, 2020) (online at 
https://arizonafoothillsmagazine.com/people/entrepreneurs/trendsetter-to-know-lincoln-jore). 
294 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42). 
295 Call between Counsel, Capital Plus Financial LLC, and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (May 10, 2022). 
296 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42). 
297 Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Feb. 5, 2021) 
(SSCC-CPF-00000105-07) (Nathan Reis); Paycheck Protection Program Lender’s Application for Capital Plus 
Financial, LLC (Feb. 5, 2021) (SSCC-CPF-00000157-59) (Stephanie Hockridge);  
298 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42). 
 
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299 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42); 
Call between Counsel, Capital Plus Financial LLC, and Majority Staff, Select Subcommittee on the Coronavirus 
Crisis (May 10, 2022). 
300 ProPublica – Tracking PPP, Nathan Reis (Apr. 27, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-reis-3510607208); ProPublica – Tracking PPP, 
Stephanie Hockridge (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/stephanie-
hockridge-9174497307); ProPublica – Tracking PPP, Body Politix, LLC (June 24, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/body-politix-llc-3391698009); ProPublica – Tracking PPP, 
Juuice, Inc. (May 1, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-inc-
9174317310); ProPublica – PPP Tracking, Juuice, LLC (Feb. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-8143118406); ProPublica – PPP Tracking, 
Juuice, LLC (June 19, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/juuice-llc-
9055237906). 
301 Paycheck Protection Program Second Draw Borrower Application Form for Nathan Reis (Feb. 5, 2021) 
(SSCC-CPF-00000058-64). 
302 Paycheck Protection Program Loan Forgiveness Application for Nathan Reis (Feb. 22, 2021) (BOA-
20220607-USHR-0000001-07); Paycheck Protection Program Loan Forgiveness Application Form for Juuice, Inc. 
(Jan. 30, 2021) (CDC Response00040-52). 
303 Biden Readies Changes to PPP to Prioritize Small, Minority-Owned Businesses, The Hill (Feb. 22, 
2021) (online at https://thehill.com/homenews/administration/539811-biden-readies-changes-to-ppp-to-prioritize-
small-minority-owned/); The White House (@WhiteHouse), Twitter (Jan. 10, 2021) (online at 
https://twitter.com/WhiteHouse/status/1348403213200990209). 
304 Schedule C for Nathan J. Reis Submitted to Bank of America (2019) (BOA-20220607-USHR-0000008-
09); Invoice From Nate Reis to Stephanie Hockridge, Body Politix LLC (Dec. 1, 2019) (BOA-20220607-USHR-
0000010); Nathan Reis, Recipient, and Body Politix, LLC, Payer, Form 1099-MISC Copy B (2019) (BOA-
20220607-USHR-0000011) (showing $96,000 in non-employment compensation and listing the “Payer” as Body 
Politix LLC and the “Recipient” as Nathan Reis.); Invoice From Nate Reis to Stephanie Hockridge, Body Politix 
LLC (Jan. 1, 2020) (BOA-20220607-USHR-0000013) (January 2020 Invoice From Nate Reis to Body Politix LLC 
for $8,000 for “agency consulting.”); Invoice From Nate Reis to Stephanie Hockridge, Body Politix LLC (Jan. 1, 
2020) (SSCC-CPF-00000102) (January 2020 Invoice From Nate Reis to Body Politix LLC for $8,000 for “agency 
consulting” submitted to Cap Plus as part of PPP loan application); Schedule C for Nathan J. Reis Submitted to 
Capital Plus Financial, LLC (2019) (SSCC-CPF-00000108-09) (2019 Schedule C Submitted to Cap Plus). 
305 Bank Statement of Nathan J. Reis, Jan. 30, 2020 – Feb. 26, 2020 (SSCC-CPF-00000098-101).  
306 Schedule C of Body Politix LLC (2019) (SSCC-CPF-00000178). In addition to reporting “Total 
expenses” of less than $20,000, Body Politix left Line 11 (Contract Labor) blank indicated that they had no expenses 
meeting this criterion.  According to IRS instructions for filling out a Schedule C, Line 11 includes “payments to 
persons you do not treat as employees (for example, independent contractors) for services performed for your trade 
or business.”  IRS guidance also states that contract labor could be deducted elsewhere on the Schedule C on lines 
17, 21, 26, or 37. These lines are all blank on Body Politix LLC’s Schedule C indicating that the company had no 
contract labor expenses. 
307 Paycheck Protection Program Borrower Application Form for Stephanie Hockridge (Feb. 5, 2021) 
(SSCC-CPF-00000150-56); Paycheck Protection Program Second Draw Borrower Application Form for Body 
Politix, LLC (Feb. 5, 2021) (SSCC-CPF-00000162-68); Paycheck Protection Program Second Draw Borrower 
Application Form for Nathan Reis (Feb. 5, 2021) (SSCC-CPF-00000058-64); Paycheck Protection Program 
Borrower Application Form for Body Politix, LLC (June 19, 2020) (PRE-0000389-92); Paycheck Protection 
Program Borrower Application Form for Juuice, LLC (June 17, 2020) (PRE-0000444-47); Paycheck Protection 
Program Borrower Application Form for Juuice, Inc. (May 9, 2020) (CDC Response00001-04). 
 
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308 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42); 
Call between Counsel, Capital Plus Financial LLC, and Majority Staff, Select Subcommittee on the Coronavirus 
Crisis (May 10, 2022). 
309 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000675). 
310 Id. 
311 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000733). 
312 Id. 
313 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000734-38). 
314 ProPublica – Tracking PPP, Adam Spencer (Mar. 20, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-6232778604); ProPublica – Tracking PPP, 
Kristen Spencer (Mar. 16, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-
spencer-3090888602); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); Letter from Blueacorn 
PPP, LLC, to Chair James Clyburn, Select Subcommittee on the Coronavirus Crisis (July 22, 2022).  Although 
mentioned in message between Stephanie Hockridge and Kristen Spencer, Elev8 Advisors Group, LLC did not 
receive a loan through Blueacorn as their loan application was withdrawn at the request of the Spencers.  However, 
Sweet P Designs, Adam Spencer, and Kristen Spencer each received PPP loans through Blueacorn in 2021. 
315 ProPublica – Tracking PPP, Adam Spencer (Mar. 20, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-6232778604); ProPublica – Tracking PPP, 
Kristen Spencer (Mar. 16, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-
spencer-3090888602); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); ProPublica – Tracking 
PPP, Jarred Spencer (Mar. 12, 2021) (https://projects.propublica.org/coronavirus/bailouts/loans/jarred-spencer-
9383918501); ProPublica – Tracking PPP, Jordan Spencer (Mar. 15, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-2616498604); ProPublica – Tracking PPP, 
Rebecca Owensby (Mar. 25, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/rebecca-
owensby-9150558608); ProPublica – Tracking PPP, Carmen Hartin (Mar. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/carmen-hartin-1688898600). 
316 ProPublica – Tracking PPP, Adam Spencer (Mar. 20, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-6232778604); ProPublica – Tracking PPP, 
Kristen Spencer (Mar. 16, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-
spencer-3090888602); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); ProPublica – Tracking 
PPP, Jarred Spencer (Mar. 12, 2021) (https://projects.propublica.org/coronavirus/bailouts/loans/jarred-spencer-
9383918501); ProPublica – Tracking PPP, Jordan Spencer (Mar. 15, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-2616498604); ProPublica – Tracking PPP, 
Rebecca Owensby (Mar. 25, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/rebecca-
owensby-9150558608); ProPublica – Tracking PPP, Carmen Hartin (Mar. 13, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/carmen-hartin-1688898600). 
317 ProPublica – Tracking PPP, Sweet P Designs (May 21, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-4924429003).  
318 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022); Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select 
Subcommittee on the Coronavirus Crisis (June 30, 2022). 
319 ProPublica – Tracking PPP, Bluume LLC (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/bluume-llc-6430348507); Business Warrior Helping 
Deploy Thousands of PPP Loans to SMB’s, Newsfile (Jan. 21, 2021) (online at 
https://www.newsfilecorp.com/release/72469/Business-Warrior-Helping-Deploy-Thousands-of-PPP-Loans-to-
 
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SMBs) Business Warrior, Leader in Small Business Software Now Publicly Traded Under Ticker Symbol KDNG 
(Feb. 12, 2020) (online at https://businesswarrior.com/business-warrior-goes-public/); Business Warrior Reports 
1,331% Annual Financial Growth, Yahoo! (Dec. 1, 2021) (online at https://finance.yahoo.com/news/business-
warrior-reports-1-331-130000227.html); ProPublica – Tracking PPP, Rhett Doolittle (June 30, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/rhett-doolittle-6490248002). 
320 ProPublica – Tracking PPP, Elev8 Advisors Group LLC (June 30, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/elev8-advisors-group-llc-6824408003); ProPublica – 
Tracking PPP, Adam Spencer (Jul. 16, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-4627438101); ProPublica – Tracking PPP, 
Adam Spencer (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-
6232778604); ProPublica – Tracking PPP, Kristen Spencer (Mar. 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-3090888602); ProPublica – Tracking PPP, 
Kristen Spencer (July 21, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-
6269958102); ProPublica – Tracking PPP, Jarred Spencer (Mar. 12, 2021) 
(https://projects.propublica.org/coronavirus/bailouts/loans/jarred-spencer-9383918501); ProPublica – Tracking PPP, 
Jordan Spencer (Mar. 15, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-
2616498604); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); ProPublica – Tracking 
PPP, Sweet P Designs (May 21, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-
designs-4924429003).  
321 Elev8 Advisors provided a spreadsheet listing Adam Spencer, Jarred Spencer, Jordan Spencer, Kristen 
Spencer, Elev8 Advisors Group LLC, Carmen Hartin, Rebecca Owensby, and Sweet P Designs as both having 
Blueacorn loan numbers and a “partner code” associated with Elev8 Advisors. Spreadsheet from Elev8 Advisors 
Group Listing Status of Blueacorn PPP, LLC Loans (ELEV8_00000565). 
322 Paycheck Protection Program Borrower Application Form for Elev8 Advisors Group LLC (June 26, 
2020) (PRE-0000413-16). 
323 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022). 
324 Paycheck Protection Program Borrower Application Form for Sweet P Designs (Mar. 2, 2021) (SSCC-
CPF-00000133-38). 
325 Paycheck Protection Program Second Draw Borrower Application Form for Kristen Spencer (Mar. 15, 
2021) (SSCC-CPF-00000427-33). 
326 Paycheck Protection Program Second Draw Borrower Application Form for Adam Spencer (Mar. 18, 
2021) (SSCC-CPF-00000114-20). 
327 Sweet P Designs, Recipient, and Vital Card Inc., Payer, Form 1099-MISC Copy B (2019) (PRE-
0000349); Paycheck Protection Program Loan Application Form for Kristen Spencer (July 20, 2020) (PRE-
0000345-46); Schedule C for Kristen Spencer (2019) (PRE-0000357-58). 
328 Sweet P Designs, Recipient, and Vital Card Inc., Payer, Form 1099-MISC Copy B (2019) (PRE-
0000349); WeWork, Office at 214 West 29th Street, New York, NY 10001 (online at 
https://wework.com/buildings/214-w-29th-st--new-york-city--NY) (accessed Nov. 16, 2022); Paycheck Protection 
Program Loan Application Form for Kristen Spencer (July 20, 2020) (PRE-0000345-46); Schedule C for Kristen 
Spencer (2019) (PRE-0000357-58). 
329 Bank Statement of Kristen Spencer d/b/a Sweet P Designs, Feb. 29, 2020 – Mar. 31, 2020 (PRE-
0000347-48). 
330 Schedule C for Kristen Spencer (2020) (SSCC-CPF-00000142). 
 
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331 New York University, Stern School of Business, Margins by Sector (US) (Jan. 2022) (online at 
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html) (showing online retail net profit 
margin at 7.26 percent and apparel industry net profit margin of 7.06 percent). 
332 Facebook, Sweet P Designs (online at https://www.facebook.com/sweetpdesigns617/) (accessed Nov. 
27, 2022) 
333 Schedule C for Kristen Spencer (2020) (SSCC-CPF-00000142). 
334 Money at 30:  Vital Card Review – What You Need to Know, Dyer News (June 19, 2019) (online at 
https://dyernews.com/vital-card-review/); Facebook, Vital Card (online at 
https://www.facebook.com/vitalcreditcard/) (accessed Nov. 16, 2022) (In 2021, VitalCard claimed in a Facebook 
comment that the Vital Card product would launch “Q2 2021”).  
335 Adam Spencer, Recipient, and Vital Card Inc., Payer, Form 1099-MISC Copy B (2019) (PRE-0000318). 
336 Schedule C for Adam Spencer (2020) (SSCC-CPF-00000124-25). 
337 Conversation between former Blueacorn employee and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis. 
338 ProPublica – Tracking PPP, Elev8 Advisors Group LLC (June 30, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/elev8-advisors-group-llc-6824408003); ProPublica – 
Tracking PPP, Adam Spencer (Feb. 20, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-2295108503); ProPublica – Tracking PPP, 
Adam Spencer (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/adam-spencer-
6232778604); ProPublica – Tracking PPP, Kristen Spencer (Mar. 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-3090888602); ProPublica – Tracking PPP, 
Kristen Spencer (July 21, 2020) (online at https://projects.propublica.org/coronavirus/bailouts/loans/kristen-spencer-
6269958102); ProPublica – Tracking PPP, Jarred Spencer (Mar. 12, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/jarred-spencer-9383918501); ProPublica – Tracking PPP, 
Jordan Spencer (Mar. 15, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-
2616498604); ProPublica – Tracking PPP, Sweet P Designs (Mar. 3, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-designs-6265518505); ProPublica – Tracking 
PPP, Sweet P Designs (May 21, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/sweet-p-
designs-4924429003); ProPublica – Tracking PPP, Rebecca Owensby (Mar. 25, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/rebecca-owensby-9150558608); ProPublica – Tracking 
PPP, Carmen Hartin (Mar. 13, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/carmen-
hartin-1688898600). 
339 Proffer by Elev8 Advisors Group to Staff, Select Subcommittee on the Coronavirus Crisis (Aug. 3, 
2022). Representatives of Elev8 Advisors told the Select Subcommittee that the consultancy received millions in 
compensation but would not share specifics due to the terms of a settlement agreement with Blueacorn. 
340 Mediterranean-Style Home in Scottsdale’s Silverleaf Sells for Nearly $8M, AZCentral (Aug. 23, 2021) 
(online at https://azcentral.com/picture-gallery/money/real-estate/done-deals/2021/08/23/mediterranean-style-home-
scottsdales-silverleaf-sells-nearly-8-m/8184909002/). 
341 Arizona State Real Property Records (accessed Nov. 17, 2022). 
342 Arizona Motor Vehicle Registration Records; April 20, 2022 Instagram Post by OverDrive Motor Group 
(@OMGLeasing); Kelley Blue Book, 2021 Porsche Taycan Turbo (online at 
https://www.kbb.com/porsche/taycan/2021/turbo/) (accessed Nov. 17, 2022).  
343 ProPublica – Tracking PPP, Nathan Sampson (Mar. 15, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/nathan-sampson-2542228600); ProPublica – Tracking 
PPP, Jarred Spencer (Mar. 12, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/jarred-
spencer-9383918501); ProPublica – Tracking PPP, Jordan Spencer (Mar. 15, 2021) (online at 
 
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https://projects.propublica.org/coronavirus/bailouts/loans/jordan-spencer-2616498604); ProPublica – Tracking PPP, 
Andrea Ortega (Mar. 1, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/andrea-ortega-
5616688508); ProPublica – Tracking PPP, Jaime Virkus (Mar. 24, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/jaime-virkus-8252298609); ProPublica – Tracking PPP, 
Breanna Adams (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/breanna-
adams-5509808610); ProPublica – Tracking PPP, Zachary King (Mar. 15, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/zachary-king-2706068608); ProPublica – Tracking PPP, 
Beth Khoundara (Apr. 7, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/beth-khoundara-
8683918705); ProPublica – Tracking PPP, Racksany Volrath (Apr. 22, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/racksany-volrath-7701378807); ProPublica – Tracking 
PPP, Mina Sobati (Apr. 11, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/mina-fatima-
sobati-2208328807); ProPublica – Tracking PPP, Kareem Sobati (Apr. 11, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/kareem-sobati-2213408801 ); ProPublica – Tracking PPP, 
Byron Copeland (Mar. 10, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/byron-
copeland-8493198506); ProPublica – Tracking PPP, Tamara Garcia (Mar. 27, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/tamara-garcia-1752068702); ProPublica – Tracking PPP, 
Michael Nupoff (May 14, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/michael-nupoff-
1909969010); ProPublica – Tracking PPP, Erin Raven (Mar. 10, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/erin-raven-8771958510); ProPublica – Tracking PPP, 
Chaz Mattison (Mar. 31, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/chaz-mattison-
3714188701); List of Elev8 Contractors (June 30, 2022) (ELEV8_00000578). 
344 Conversation between former Blueacorn employee and Staff, Select Subcommittee on the Coronavirus 
Crisis. 
345 Id. 
346 Id. 
347 Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (June 30, 2022) (Listing Blueacorn loan files for Body Politix LLC, Bluume LLC (Business 
Warrior), Carmen Hartin, Stephanie Hockridge, Juuice, Inc. Rebecca Owensby, Nathan Reis, Adam Spencer, Jarred 
Spencer, Jordan Spencer, Kristen Spencer); Letter from Blueacorn PPP, LLC to Chairman James E. Clyburn, Select 
Subcommittee on the Coronavirus Crisis (July 22, 2022) (Listing Blueacorn loan files for Elev8 Advisors Group 
LLC (withdrawn), Lincoln Jore, Men’s Revival, LLC, and Sweet P Designs). 
348 Slack Messages Between Stephanie Hockridge and Kristen Spencer (ELEV8_00000733-38). 
349 Id. 
350 Id. 
351 Id. 
352 Crossroads Systems Inc., Annual Report for the Period Ending October 31, 2021 (the “Reporting 
Period”) (Jan. 27, 2022) (online at https://crossroads.com/wp-content/uploads/2022/01/FY-2021-Annual-
Disclosure-Statement_CRSS.pdf); Email from Counsel, Capital Plus Financial LLC, to Majority Staff, Select 
Subcommittee on the Coronavirus Crisis (July 22, 2022). 
353 Email from Counsel, Capital Plus Financial LLC, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022).  
354 Id. 
355 Id. 
356 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0). 
 
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357 Email from Counsel, Capital Plus Financial LLC, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022). 
358 Id. 
359 Id. 
360 Id. 
361 Id. 
362 Id. 
363 Id. 
364 Email from Counsel, Capital Plus Financial LLC, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (July 22, 2022). 
365 Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Feb. 5, 2021) 
(SSCC-CPF-00000105-07) (Nathan Reis); Paycheck Protection Program Lender’s Application for Capital Plus 
Financial, LLC (Feb. 5, 2021) (SSCC-CPF-00000157-59) (Stephanie Hockridge); Paycheck Protection Program 
Lender’s Application for Capital Plus Financial, LLC (Feb. 5, 2021) (SSCC-CPF-00000169-71) (Body Politix, 
LLC); Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Feb. 5, 2021) (SSCC-
CPF-00000198-200) (Juuice, Inc.). 
366 Letter from Fin Cap, Inc. to Capital Plus Financial LLC (June 23, 2021) (SSCC-CPF-00000439-42); 
see, e.g., Schedule C for Body Politix, LLC (2019) (SSCC-CPF-00000178-79) (Schedule C for Body Politix, LLC); 
Paycheck Protection Program Second Draw Borrower Application Form for Body Politix, LLC (Feb. 5, 2021) 
(SSCC-CPF-00000162-68) (PPP application form for Body Politix); Juuice, INC Payroll Report Jan. 1, 2020 – Dec. 
31, 2020) (SSCC-CPF-00000197) (Payroll Report for Juuice Inc.). 
367 Paycheck Protection Program Second Draw Borrower Application Form for Nathan Reis (Feb. 5, 2021) 
(SSCC-CPF-00000058-64); Blueacorn Internal Dashboard for Nathan Reis Loan (SSCC-CPF-00000066-67).  
368 See, e.g., Paycheck Protection Program Lender’s Application – Second Draw Loan Guaranty (Feb. 5, 
2021) (SSCC-CPF-00000105-07). 
369 Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Mar. 12, 2021) 
(SSCC-CPF-00000013-15) (Carmen Hartin); Paycheck Protection Program Lender’s Application for Capital Plus 
Financial, LLC (Mar. 14, 2021) (SSCC-CPF-00000029-31) (Jordan Spencer); Draft Schedule C for Jordan Spencer 
(2020) (SSCC-CPF-00000032-33); Paycheck Protection Program Lender’s Application for Capital Plus Financial, 
LLC (Mar. 18, 2021) (SSCC-CPF-00000121-23) (Adam Spencer); Paycheck Protection Program Lender’s 
Application for Capital Plus Financial, LLC (Mar. 2, 2021) (SSCC-CPF-00000139-41) (Sweet P Designs); 
Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Mar. 24, 2021) (SSCC-CPF-
00000211-13) (Rebecca Owensby); Paycheck Protection Program Lender’s Application for Capital Plus Financial, 
LLC (Mar. 9, 2021) (SSCC-CPF-00000227-29) (Jarred Spencer); Schedule C for Jarred Spencer (2020) (SSCC-
CPF-00000230-31); Paycheck Protection Program Lender’s Application for Capital Plus Financial, LLC (Mar. 15, 
2021) (SSCC-CPF-00000434-36 (Kristen Spencer). 
370 Email from Counsel, Capital Plus Financial, LLC, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (May 19, 2022). 
371 Call between Counsel, Capital Plus Financial, LLC, and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (May 10, 2022).  
372 Crossroads Systems Inc., Press Release:  Crossroads Systems Reports Fiscal Second Quarter 2021 
Financial Results (June 14, 2021) (online at http://crossroads.mediaroom.com/2021-06-14-Crossroads-Systems-
Reports-Fiscal-Second-Quarter-2021-Financial-Results). 
373 Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals Through 
5/31/2021 (May 31, 2021) (https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-508.pdf). 
 
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374 Crossroads Systems Inc., Annual Report for the Period Ending October 31, 2021 (the “Reporting 
Period”) (Jan. 27, 2022) (online at https://crossroads.com/wp-content/uploads/2022/01/FY-2021-Annual-
Disclosure-Statement_CRSS.pdf). 
375 Id. 
376 Prestamos CDFI, About Us (online at https://prestamosloans.org/about-prestamos/) (accessed Nov. 16, 
2022). 
377 Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals Through 
5/31/2021 (May 31, 2021) (https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-508.pdf). 
378 Id. 
379 Chicanos Por La Causa, Economic Development - Small Business Lending (online at 
http://web.archive.org/web/20190603170701/https://www.cplc.org/econ/lending.php) (accessed Nov. 16, 2022). 
380 Briefing by Staff, Prestamos CDFI, to Staff, Select Subcommittee on the Coronavirus Crisis (Mar. 31, 
2022); Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis 
(Apr. 5, 2022); Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Aug. 18, 2022). 
381 Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 5, 2022); Briefing by Staff, Prestamos CDFI, to Staff, Select Subcommittee on the Coronavirus Crisis 
(Mar. 31, 2022). 
382 Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 5, 2022). 
383 Briefing by Staff, Prestamos CDFI, to Staff, Select Subcommittee on the Coronavirus Crisis (Mar. 31, 
2022).  
384 Letter from Prestamos CDFI to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 25, 2022). 
385 Briefing by Staff, Prestamos CDFI, to Staff, Select Subcommittee on the Coronavirus Crisis (Mar. 31, 
2022). 
386 Id. 
387 Id. 
388 Id. 
389 Emails Between Toby Scammell, Founder and Chief Executive Officer, Womply, Inc., and Cory 
Capoccia, Womply, Inc, and Bernie Navarro, Benworth Capital Partners, LLC (Apr. 8, 2021 – May 10, 2021) 
(BWSSCCResp0000034-52). 
390 Call between Staff, Fountainhead Commercial Capital, and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis Conversation (May 2, 2022). 
391 Email from Chief Operations and Innovation Officer, DreamSpring, to Cory Cappocia, President, 
Womply and Vice President of Partnerships, Womply, Inc. (Mar. 30, 2021) (House_Select_000013734-35); Call 
between Staff, Small Business Administration, Office of Inspector General, and Majority Staff, Select 
Subcommittee on the Coronavirus Crisis (May 5, 2022).  
392 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022); Oto Analytics, Inc. d/b/a Womply Presentation to the House Select Subcommittee on the 
Coronavirus Crisis (May 4, 2022) (House_Select_000012782-835); Womply, The Smart Way to Get More Happy 
Customers (online at https://web.archive.org/web/20190709041424/https://www.womply.com/) (accessed Nov. 16, 
2022). 
 
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393 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022); Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis (Apr. 29, 2022). 
394 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022). 
395 Id.; Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022). 
396 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022). 
397 Oto Analytics, Inc. d/b/a Womply Presentation to the House Select Subcommittee on the Coronavirus 
Crisis (May 4, 2022) (House_Select_000012782-835). 
398 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022). 
399 Id. Womply denies that the fintech provided underwriting services, although its activities, as described 
to the Select Subcommittee by its lending partners and by Womply itself, clearly meets the definition of 
underwriting under the PPP rules.  Further discussion of Womply’s extensive efforts to miscategorize itself as a 
“technology service provider” is found in Section C. 5.   
400 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022); Oto Analytics, Inc. d/b/a Womply Presentation to the House Select Subcommittee on the 
Coronavirus Crisis (May 4, 2022) (House_Select_000012782-835). 
401 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022); Small Business Administration, Paycheck Protection Program (PPP) Report – Approvals 
Through 5/31/2021 (May 31, 2021) (https://sba.gov/sites/default/files/2021-06/PPP_Report_Public_210531-
508.pdf). 
402 Oto Analytics, Inc. d/b/a Womply Presentation to the House Select Subcommittee on the Coronavirus 
Crisis (May 4, 2022) (House_Select_000012782-835). 
403 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022). 
404 Id. 
405 Id. 
406 Id. 
407 Id. 
408 Id. 
409 Womply’s primary PPP lending partners Harvest, Benworth, and Fountainhead jointly issued over $16 
billion in PPP loans in 2021. Small Business Administration, Paycheck Protection Program (PPP) Report – 
Approvals Through 5/31/2021 (May 31, 2021) (https://sba.gov/sites/default/files/2021-
06/PPP_Report_Public_210531-508.pdf). 
410 Plaintiff’s First Amended Complaint, Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, LLC, 
Crossroads Systems, Inc., Eric Donnelly, BA Fin Orion, LLC d/b/a Blueacorn, and Barry Calhoun, No. 3:21-cv-
02636-B (N.D. Tex. Dec. 23, 2021). 
411 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022). 
 
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412 Call between Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC, and Staff, 
Select Subcommittee on the Coronavirus Crisis (Apr. 4, 2022). 
413 Call between Staff, Fountainhead Commercial Capital and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (May 2, 2022). 
414 Letter from Benworth Capital Partners, LLC to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (Aug. 5, 2022). 
415 Id. 
416 Id. 
417 Id. 
418 See, e.g., PPP Loan Referral Agreement between Oto Analytics, Inc. d/b/a Womply and Fountainhead 
SBF (Feb. 9, 2021) (House_Select_000003690-94); Amended and Restated PPP Loan Referral Agreement between 
Oto Analytics, Inc. d/b/a Womply and Harvest Small Business Finance, LLC (Apr. 21, 2021) 
(House_Select_000003780-84); House_Select_000003769; Agent Agreement between Benworth Capital Partners, 
LLC and Oto Analytics, Inc. (Feb. 2021) (House_Select_000003577-97); Womply Developer Order Form between 
Oto Analytics, Inc. d/b/a Womply and Benworth Capital Partners, LLC (Apr. 14, 2021) (House_Select_000003604-
06); Womply Developer Order Form between Oto Analytics, Inc. d/b/a Womply and Harvest Small Business 
Finance, LLC (Apr. 21, 2021) (House_Select_000003786-89); Letter from Benworth Capital Partners, LLC to 
Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Nov. 21, 2022). 
419 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Apr. 14, 2022). 
420 Id. 
421 Womply Developer Order Form between Oto Analytics, Inc. d/b/a Womply and Benworth Capital 
Partners, LLC (Apr. 14, 2021) (House_Select_000003604-06); Womply Developer Order Form between Oto 
Analytics, Inc. d/b/a Womply and Harvest Small Business Finance, LLC (Apr. 21, 2021) 
(House_Select_000003786-89). 
422 Call between Fountainhead Commercial Capital, and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis Conversation (May 2, 2022). 
423 Id. 
424 Email from Metta Smith, Chief Lending and Client Experience Officer, DreamSpring, to Connie 
Spencer-Adams, Vice President of Partnerships, Womply, Inc. (Mar. 20, 2021) (House_Select_000013707-08). 
425 Email from Francisco Lopez, Chief Operations and Innovation Officer, DreamSpring, to Cory Cappocia 
and Connie Spencer-Adams, Womply, Inc. (Mar. 30, 2021) (House_Select_000013734-35). 
426 Id. 
427 Id. 
428 Email from Francisco Lopez, Chief Operations and Innovation Officer, DreamSpring, to Cory Capoccia, 
Womply, Inc. (Mar. 31, 2021) (House_Select_000013734-35). 
429 Email from Cory Capoccia, Womply, Inc., to Connie Spencer-Adams, Womply, Inc. (Apr. 13, 2021) 
(House_Select_000013897-907). 
430 Email from Francisco Lopez, Chief Operations and Innovation Officer, DreamSpring, to Cory Capoccia, 
Womply, Inc. (Apr. 13, 2021) (House_Select_000013897-907). 
431 Id. 
432 Id. 
 
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433 Email from Everett K. Sands, Chief Executive Officer, Lendistry, to Adam Seery, Harvest Small 
Business Finance, LLC, and Toby Scammell, Womply, Inc. (June 8, 2021) (House_Select_000013805). 
434 Email from Adam Seery, Harvest Small Business Finance, LLC, to Everett K. Sands, Chief Executive 
Officer, Lendistry (June 8, 2021) (House_Select_000013805). 
435 Emails Between Toby Scammell, Founder and Chief Executive Officer, Womply, Inc., to Cory 
Capoccia, Womply, Inc, and Bernie Navarro, Benworth Capital Partners, LLC (Apr. 8, 2021 – May 10, 2021) 
(BWSSCCResp0000034-52). 
436 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Toby Scammell, Womply, Inc. (May 
10, 2021) (BWSSCCResp0000034-52). 
437 Id. 
438 Id. 
439 Email from Bernie Navarro, Benworth Capital Partners, LLC, Toby Scammell, Womply, Inc. (May 7, 
2021) (BWSSCCResp0000034-52). 
440 Id. 
441 Id. 
442 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Toby Scammell, Womply, Inc. (May 
10, 2021) (BWSSCCResp0000034-52). 
443 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Toby Scammell, Womply, Inc. (May 7, 
2021) (BWSSCCResp0000034-52). 
444 Email from Toby Scammell, Founder and Chief Executive Officer, Womply, Inc., to Bernie Navarro, 
Benworth Capital Partners, LLC (Apr. 8, 2021) (BWSelect SubcommitteeResp0000034-52). 
445 Id. 
446 Email from Toby Scammell, Founder and Chief Executive Officer, Womply, Inc., to Bernie Navarro, 
Benworth Capital Partners, LLC (Apr. 8, 2021) (BWSelect SubcommitteeResp0000034-52). This warning email 
was widely mocked on PPP applicant internet message boards. Reddit, r/EIDLPPP (online at 
https://reddit.com/r/EIDLPPP/comments/n44i19/this_is_whats_going_on_theyre_being_investigated/?utm_source=s
hare&utm_medium=web2x&context=3) (accessed Nov. 17, 2022); Reddit, r/EIDLPPP (online at 
https://reddit.com/r/EIDLPPP/comments/n2h2ka/womply_email/?utm_source=share&utm_medium=web2x&contex
t=3) (accessed Nov. 17, 2022). 
447 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Toby Scammell, Womply, Inc. (May 
10, 2021) (BWSSCCResp0000034-52). 
448 Id. 
449 Letter from Benworth Capital Partners, LLC to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (Aug. 5, 2022). 
450 Id. 
451 Id. 
452 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Toby Scammell, Womply, Inc. (May 7, 
2021) (BWSSCCResp0000034-52). 
453 13 C.F.R. § 103.4(f) (2022) states: “Engaging in any conduct indicating a lack of business integrity or 
business honesty, including debarment, criminal conviction, or civil judgment within the last seven years for fraud, 
embezzlement, theft, forgery, bribery, falsification or destruction of records, false statements, conspiracy, receiving 
 
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stolen property, false claims, or obstruction of justice” is good cause for suspension or revocation of the privilege to 
conduct business with the SBA. 
454 Opinion of the Commission, In the Matter of Toby G. Scammell, No. 3-15271 (S.E.C. Oct. 29, 2014). 
455 Letter from Oto Analytics, Inc., d/b/a Womply, to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (Apr. 14, 2022). 
456 Federal Bureau of Investigations, Bay Area Man Sentenced to Federal Prison for Insider Trading in the 
Walt Disney Company’s Acquisition of Marvel Entertainment in August 2009 (Aug. 7, 2014) (online at 
https://fbi.gov/contact-us/field-offices/losangeles/news/press-releases/bay-area-man-sentenced-to-federal-prison-for-
insider-trading-in-the-walt-disney-companys-acquisition-of-marvel-entertainment-in-august-2009). 
457 Securities and Exchange Commission, SEC Charges Former Investment Fund Associate with Insider 
Trading (Aug. 11, 2011) (online at https://sec.gov/litigation/litreleases/2011/lr22066.htm). 
458 Judgement of Permanent Injunction and Other Relief as to Defendant Toby G. Scammell, Securities and 
Exchange Commission v. Toby G. Scammell, No. 2:11-cv-6597 (C.D. Cal. June 15, 2012). 
459 Opinion of the Commission, In the Matter of Toby G. Scammell, No. 3-15271 (S.E.C. Oct. 29, 2014); 
San Francisco Man Gets Jail for Insider Trading, Associated Press (Aug. 7, 2014) (online at 
https://apnews.com/article/a684fc4c3532487588dd9e39c5ee6aa5); Bureau of Prison, Find an Inmate – Bureau of 
Prison Register Number 67087-112 (online at www.bop.gov/mobile/find_inmate/byname.jsp#inmate_results) 
(accessed Nov. 18, 2022) (According to the Bureau of Prisons website, Toby G Scammell (Bureau of Prison 
Register Number: 67087-112) was released from federal prison on December 18, 2014).  
460 Opinion of the Commission, In the Matter of Toby G. Scammell, No. 3-15271 (S.E.C. Oct. 29, 2014).  
461 Id. (indicating that the start-up company that Scammell was now involved in was Womply).  
462 Division of Enforcement’s Memorandum of Points and Authorities in Opposition to Respondent’s 
Motion for Summary Disposition, In the Matter of Toby G. Scammell, No. 3-15271 (S.E.C. Aug. 5, 2013). Stating 
that Scammell's assertions regarding his financial condition at the time of the insider trading were false; Scammell's 
purported explanations for his interest in Marvel were contradicted by the evidence; and Scammell's arguments 
regarding the timing of his girlfriend's work on the Marvel acquisition were misleading, among other falsehoods. 
463 Division of Enforcement’s Memorandum of Points and Authorities in Opposition to Respondent’s 
Motion for Summary Disposition, In the Matter of Toby G. Scammell, No. 3-15271 (S.E.C. Aug. 5, 2013).   
464 Id.   
465 Id.   
466 13 C.F.R. § 103.4(f) (2022). 
467 Emails between Michael Bland, Chief Operating Officer, Fountainhead Small Business Finance, and 
Staff, Staff, Small Business Administration, Office of Inspector General (June 7, 2021) (House_Select_000006059-
65). 
468 Email from Toby Scammell, Womply, Inc., to Michael Bland, Fountainhead Commercial Capital (June 
10, 2021) (House_Select_000006066-69). 
469 Email from Staff, Small Business Administration, Office of Inspector General, to Michael Bland, 
Fountainhead Commercial Capital, (June 7, 2021) (House_Select_000006059-65); Email from Toby Scammell, 
Womply, Inc., to Staff, Small Business Administration, Office of Inspector General (May 24, 2021) 
(House_Select_000007380-83). In another incident, Benworth required data from Womply to aid the SBA OIG in 
an investigation and Womply again resisted providing the information to Benworth. In correspondence to the SBA 
OIG, Toby Scammell wrote that, “We provide certain data to lenders already, and in general if additional info is 
requested beyond that (especially if research services are needed) then we need to receive a request from the 
government to obtain that info.” In response, a counsel with the SBA emphasized to Womply that the fintech was 
required to provide information directly to the lenders and wrote, “The information on borrowers, IP addresses and 
 
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documentation--while gathered and apparently retained by Womply- belongs to the lenders. Lenders bear the 
primary responsibility for cooperating with SBA and meeting their BSA/AML requirements, including establishing 
risk parameters and profiles that will identify fraud. This would include conducting active searches of IP addresses 
to identify fraudulent activity.  Thus, I recommend that all requests for information under 13 CFR 120.197 be made 
directly to the lenders vs. Womply. Lenders should be directing Womply to gather this information.” 
470 Email from Michael Bland, Fountainhead Commercial Capital, to Toby Scammell, Cory Capoccia, and 
Connie Spencer-Adams, Womply, Inc. (June 10, 2021) (House_Select_000006066-69). 
471 Email from Toby Scammell, Womply, Inc., to Michael Bland, Fountainhead Commercial Capital (June 
10, 2021) (House_Select_000006066-69). 
472 Id. 
473 Id. 
474 Email from Michael Bland, Fountainhead Commercial Capital, to Toby Scammell, Womply, Inc. (June 
11, 2021) (House_Select_000006066-69). 
475 Email from Michael Bland, Fountainhead Commercial Capital, to Staff, Small Business Administration 
(June 16, 2021) (House_Select_000006750-51). 
476 Email from Staff, Small Business Administration, to Toby Scammell, Womply, Inc. (June 16, 2021) 
(House_Select_000006750-51). 
477 Id. 
478 Call between Staff, Fountainhead Commercial Capital, and Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (May 2, 2022). 
479 Id. 
480 Email from Staff, Small Business Administration, Office of Inspector General, to Bernie Navarro, 
Benworth Capital Partners, LLC (Apr. 27, 2021) (House_Select_000008800-03). 
481 Email from Bernie Navarro, Benworth Capital Partners, LLC, to Staff, Small Business Administration, 
Office of Inspector General (Apr. 27, 2021) (House_Select_000008800-03). 
482 Email from Staff, Small Business Administration, Office of Inspector General, to Connie Spencer-
Adams, Womply, Inc. (May 17, 2021) (House_Select_000008800-03). 
483 Email from Chief Compliance Officer, Benworth Capital Partners, LLC, to Staff, Small Business 
Administration, Office of Inspector General (May 21, 2021) (House_Select_000007444-46). 
484 Email from Staff, Small Business Administration, Office of Inspector General, to Toby Scammell, 
Founder and Chief Executive Officer, Womply, Inc. (May 24, 2021) (House_Select_000007444-46). 
485 Email from Counsel, Womply, Inc., to Staff, Small Business Administration (June 17, 2021) 
(House_Select_000006754-62). 
486 Letter from Staff, Small Business Administration, to Toby Scammell, Founder and Chief Executive 
Officer, Womply, Inc. (June 11, 2021) (House_Select_000006717-18). 
487 Id. 
488 Id. 
489 Id. 
490 Call between Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC, and Staff, 
Select Subcommittee on the Coronavirus Crisis (Apr. 4, 2022).  
491 13 C.F.R. § 103.4(d) (2022) states that unlawful or unethical activity. which is good cause for 
suspension or revocation of the privilege to conduct business with the SBA. includes: “Implying or stating that the 
 
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work to be performed for an Applicant will include use of political or other special influence with SBA. Examples 
include indicating that the entity is affiliated with or paid, endorsed or employed by SBA, advertising using the 
words Small Business Administration or SBA in a manner that implies SBA’s endorsement or sponsorship, use of 
SBA’s seal or symbol…”.  
492 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022). 
493 Id. 
494 Facebook, Womply (Jan. 26, 2021) (House_Select_000011862); Facebook, Womply 
(House_Select_000009813). 
495 Text Message from Toby Scammell, Founder and Chief Executive Officer, Womply, Inc., to William 
Briggs (Jan. 15, 2021) (House_Select_000009270). 
496 Call between Staff, Small Business Administration, Office of Inspector General, and Staff, Select 
Subcommittee on the Coronavirus Crisis (Apr. 13, 2022). 
497 Id. 
498 Id. 
499 Id. 
500 Call between Staff, Small Business Administration, Office of Inspector General, and Majority Staff, 
Select Subcommittee on the Coronavirus Crisis (May 5, 2022). 
501 Id. 
502 Call between Staff, Small Business Administration, and Staff, Select Subcommittee on the Coronavirus 
Crisis (June 9, 2022).  
503 Letter from Oto Analytics, Inc., d/b/a Womply to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (May 20, 2022). Womply is currently expending significant resource as part of a legal battle 
against Blueacorn and Capital Plus to secure for itself $75 million more taxpayer dollars related to the PPP program. 
Plaintiff’s First Amended Complaint, Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, LLC, Crossroads 
Systems, Inc., Eric Donnelly, BA Fin Orion, LLC d/b/a Blueacorn, and Barry Calhoun, No. 3:21-cv-02636-B (N.D. 
Tex. Dec. 23, 2021). 
504 Letter from Oto Analytics, Inc., d/b/a Womply to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (May 20, 2022). 
505 Id. 
506 Excerpt from IRS e-file Signature Authorization for Form 1120 for Oto Analytics, Inc. (Oct. 10, 2019) 
(HARVEST_SSCC_000008). 
507 ProPublica – Tracking PPP, Oto Analytics, Inc. (Apr. 13, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/oto-analytics-inc-5187557106); Promissory Note for Oto 
Analytics, Inc., d/b/a Womply Loan (Apr. 24, 2020) (HARVEST_SSCC_002472-80) (Note for PPP loan in the 
amount of $3,103,440, signed by Toby Scammell and dated April 24, 2020, with accompanying payment 
instructions to Oto Analytics.); ProPublica – Tracking PPP, Oto Analytics, Inc. (Feb. 7, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/oto-analytics-inc-4959988403). 
508 Paycheck Protection Program Borrower Application Form for Oto Analytics, Inc. (Apr. 6, 2020) 
(HARVEST_SSCC_000001-04). 
509 ProPublica – Tracking PPP, Oto Analytics, Inc. (Apr. 13, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/oto-analytics-inc-5187557106); ProPublica – Tracking 
 
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PPP, Oto Analytics, Inc. (Feb. 7, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/oto-
analytics-inc-4959988403).  
510 Email from Toby Scammell, Chief Executive Officer, Womply, Inc., to Jeremy Osaki, Senior Vice 
President, Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC (May 12, 2020) 
(HARVEST_SSCC_002465-68) (Scammell emailing Adam Seery and other Harvest executives about the loan 
application); Email from Jeremy Osaki, Senior Vice President, Harvest Small Business Finance, LLC, to Toby 
Scammell, Chief Executive Officer, Womply, Inc. (Apr. 23, 2020) (HARVEST_SSCC_002471); Email from Cory 
Capoccia, President, Womply, Inc., to Staff, Harvest Small Business Finance, LLC (Feb. 11, 2021) 
(HARVEST_SSCC_002508-20) (Mr. Capoccia was notified that Womply’s PPP loan was approved and he 
responded, “Great news.”) Email from Toby Scammell, Chief Executive Officer, Womply, Inc., to Jeremy Osaki, 
Senior Vice President, Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC (May 13, 2020) 
(HARVEST_SSCC_002525-28). 
511 SBA to Drop Its Review of PPP Loans of $2 Million and Above, Inc. Magazine (July 9, 2021) (online 
at https://inc.com/diana-ransom/small-business-administration-ppp-loan-necessity-questionnaire.html); Department 
of the Treasury, Paycheck Protection Program Loans Frequently Asked Questions (FAQs) (July 29, 2021) (online at 
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Frequently-Asked-Questions.pdf). 
512 Paycheck Protection Program PPP Loan Forgiveness Application Form for Oto Analytics, Inc. (Aug. 19, 
2021) (HARVEST_SSCC_001293-95); Email from Brian Sheffield, Senior Assistant Controller, Womply, Inc, to 
Staff, Harvest Small Business Finance, LLC (Aug. 23, 2021) (HARVEST_SSCC_002410-22); Email from Brian 
Sheffield, Senior Assistant Controller, Womply, Inc., to Staff, Harvest Small Business Finance, LLC (Aug. 24, 
2021) (HARVEST_SSCC_002423-34). 
513 Paycheck Protection Program PPP Loan Forgiveness Application Form for Oto Analytics, Inc. (Sept. 10, 
2021) (HARVEST_SSCC_001657-59). 
514 Letter from Small Business Administration, Office of Capital Access, to Staff, Harvest Small Business 
Finance, LLC Regarding SBA Loan No. 4959988403 (Sept. 1, 2022); Letter from Small Business Administration, 
Office of Capital Access, to Staff, Harvest Small Business Finance, LLC Regarding SBA Loan No. 5187557106 
(Sept. 1, 2022). 
515 Letter from Small Business Administration, Office of Capital Access, to Staff, Harvest Small Business 
Finance, LLC Regarding SBA Loan No. 4959988403 (Sept. 1, 2022); Letter from Small Business Administration, 
Office of Capital Access, to Staff, Harvest Small Business Finance, LLC Regarding SBA Loan No. 5187557106 
(Sept. 1, 2022). 
516 Letter from Small Business Administration, Office of Capital Access, to Staff, Harvest Small Business 
Finance, LLC Regarding SBA Loan No. 5187557106 (Sept. 1, 2022). 
517 Letter from Small Business Administration, Office of Capital Access, to Staff, Harvest Small Business 
Finance, LLC Regarding SBA Loan No. 4959988403 (Sept. 1, 2022); Letter from Small Business Administration, 
Office of Capital Access, to Staff, Harvest Small Business Finance, LLC Regarding SBA Loan No. 5187557106 
(Sept. 1, 2022). 
518 Letter from Small Business Administration, Office of Capital Access, to Staff, Harvest Small Business 
Finance, LLC Regarding SBA Loan No. 4959988403 (Sept. 1, 2022); Letter from Small Business Administration, 
Office of Capital Access, to Staff, Harvest Small Business Finance, LLC Regarding SBA Loan No. 5187557106 
(Sept. 1, 2022). 
519 ProPublica – Tracking PPP, Oto Analytics, Inc. (Apr. 13, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/oto-analytics-inc-5187557106); ProPublica – Tracking 
PPP, Oto Analytics, Inc. (Feb. 7, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/oto-
analytics-inc-4959988403); ProPublica – Tracking PPP, Chasm LLC (May 6, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/chasm-llc-2717287407); ProPublica – Tracking PPP, Cory 
Capoccia (March 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-
 
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5769978600); ProPublica – Tracking PPP, Cory Capoccia (April 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-4874638807). 
520 Letter from Oto Analytics, Inc., d/b/a Womply to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (May 20, 2022). 
521 The ownership shares provided by Womply to the SBA as part of their PPP applications differ from the 
ownership shares provided by Womply to the Select Subcommittee.  Womply would not tell the Select 
Subcommittee the identity of their shareholders and only provided anonymized data.  Nonetheless, Womply stated 
that “Shareholder 1” owned 16.47% of the company.  The Select Subcommittee staff assesses that Shareholder 1 is 
most likely Mr. Scammell, who in his company’s PPP application claims to own 18% of Womply.  Womply 
identified the second largest shareholder, “Shareholder 2,” as holding 9.5% of the company.  The Select 
Subcommittee staff assesses that Shareholder 2 is likely Mr. Capoccia since Mr. Capoccia listed himself as the 
second largest shareholder in Womply’s PPP application documents.  The Select Subcommittee used the ownership 
percentages reported by Womply to the SBA in their PPP applications when estimating the amount that Scammell 
and Mr. Capoccia stood to personally gain in profits from the PPP. Paycheck Protection Program Second Draw 
Borrower Application Form for Oto Analytics (Jan. 18, 2021) (HARVEST_SSCC_002486-91); Letter from Oto 
Analytics, Inc., d/b/a Womply to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (May 
20, 2022); Email from Staff, Harvest Small Business Finance, LLC, to Thom Keyes, Director of Finance, Womply, 
Inc. (Jan. 17, 2021) (HARVEST_SSCC_002481-85) (Email from Harvest to Womply confirming that Scammell 
owned 18% of the company). 
522 ProPublica – Tracking PPP, Chasm LLC (May 6, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/chasm-llc-2717287407).  
523 Cory Capoccia Loan Support Documents (Fountainhead_SSCC_01-12); ProPublica - Tracking PPP, 
Cory Capoccia (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-
5769978600); ProPublica - Tracking PPP, Cory Capoccia (Apr. 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-4874638807). 
524 Letter from Womply, Inc, to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022); ProPublica – Tracking PPP, Chasm LLC (May 6, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/chasm-llc-2717287407). 
525 Cory Capoccia Loan Support Documents (Fountainhead_SSCC_01-12); ProPublica - Tracking PPP, 
Cory Capoccia (Mar. 20, 2021) (online at https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-
5769978600); ProPublica - Tracking PPP, Cory Capoccia (Apr. 16, 2021) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/cory-capoccia-4874638807); Letter from Womply, Inc, to 
Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Jan. 14, 2022). 
526 Letter from Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis, to Mr. Toby 
Scammell, Womply, Inc (June 27, 2022); Letter from Chairman James E. Clyburn, Select Subcommittee on the 
Coronavirus Crisis, to Mr. Cory Capoccia, Womply, Inc (June 27, 2022). 
527 Email from Counsel, Womply, Inc., to Majority Staff, Select Subcommittee on the Coronavirus Crisis 
(July 6, 2022) (“During our call, we also shared that our client would be unavailable on that date because he would 
be in Europe. From July 10 – July 20, he is hosting an in-person summit – an event that has been planned for a year.  
He will be staying in Europe beyond that time to continue working on a product launch that is scheduled for August 
and to visit family.”). 
528 Solo Global, Inc., About (online at https://solo.co/about/) (accessed Nov. 17, 2022). 
529 Id.; Open Corporates, Solo Global, Inc. (online 
at https://opencorporates.com/companies/us_nv/E21220962022-2) (accessed Nov. 23, 2022).  
530 Womply, Inc., Privacy Policy (May 20, 2022) (online at https://www.womply.com/legal/privacy/). 
 
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531 Email from Toby Scammell, Chief Executive Officer, Womply, Inc., to Staff, Small Business 
Administration, Office of Inspector General (Apr. 26, 2021) (House_Select_000000234-38). 
532 Womply, Inc., Privacy Policy (May 20, 2022) (online at https://womply.com/legal/privacy/). 
533 5 U.S.C. § 552a; Department of Justice, Office of Privacy and Civil Liberties, Overview of the Privacy 
Act of 1974: 2020 Edition (Oct. 12, 2022) (online at https://justice.gov/opcl/overview-privacy-act-1974-2020-
edition) (summarizing protections); Small Business Administration, Privacy Act (online at www.sba.gov/about-
sba/open-government/privacy-act) (accessed Nov. 17, 2022).   
534  5 U.S.C. 552a; Small Business Administration, Paycheck Protection Program Borrower Application 
Form (Mar. 18, 2021) (online at www.sba.gov/sites/default/files/2021-
03/BorrowerApplication2483ARPrevisions%20%28final%203-18-21%29-508.pdf).   
535 See Department of Justice, Office of Privacy and Civil Liberties, Overview of the Privacy Act: 2020 
Edition, Definitions (Oct. 22, 2022) (online at www.justice.gov/opcl/overview-privacy-act-1974-2020-
edition/definitions#agency) (summarizing cases). 
536 Email from Counsel, Oto Analytics, Inc. d/b/a Womply, to Majority Staff, Select Subcommittee on the 
Coronavirus Crisis (Sept. 15, 2022). 
537 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0); 13 C.F.R. § 103.1(d) (2022). 
538 See Section C.1. 
539 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0); see also 13 C.F.R. § 103.1(a) and (d) (2022). 
540 See Section C.1. 
541 Email from Toby Scammell, Chief Executive Officer, Womply, Inc., to Michael Bland, Fountainhead 
Commercial Capital (June 10, 2021) (House_Select_000006066-69). 
542 Letter from Womply, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Jan. 14, 2022).  
543 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0); 13 C.F.R. §§ 103.1 (2022); 13 C.F.R. § 103.4(f) (2022) 
544 Plaintiff’s First Amended Complaint, Oto Analytics, Inc. d/b/a Womply v. Capital Plus Financial, LLC, 
Crossroads Systems, Inc., Eric Donnelly, BA Fin Orion, LLC d/b/a Blueacorn, and Barry Calhoun, No. 3:21-cv-
02636-B (N.D. Tex. Dec. 23, 2021). 
545 Letter from Benworth Capital Partners, LLC to Chairman James E. Clyburn, Select Subcommittee on 
the Coronavirus Crisis (Nov. 21, 2022). 
546 Id. 
547 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022). 
548 Id. 
549 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022); Briefing by Adam Seery, Chief Operating Officer, Harvest Small 
Business Finance, LLC, to Staff, Select Subcommittee on the Coronavirus Crisis (Apr. 4, 2022). 
 
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550 Briefing by Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC, to Staff, 
Select Subcommittee on the Coronavirus Crisis (Apr. 4, 2022). 
551 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022). 
552 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0). 
553 Briefing by Adam Seery, Chief Operating Officer, Harvest Small Business Finance, LLC, to Staff, 
Select Subcommittee on the Coronavirus Crisis (Apr. 4, 2022). 
554 Id. 
555 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 31, 2022). 
556 Id. 
557 See Harvest Small Business Finance, LLC, Monthly Class A Member Meeting Notes 
(HARVEST_SSCC_002573-90). 
558 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 2, 2022). 
559 Letter from Harvest Small Business Finance, LLC to Chairman James E. Clyburn, Select Subcommittee 
on the Coronavirus Crisis (Aug. 31, 2022). 
560 Id. 
561 Id. 
562 Id. 
563 Harvest Small Business Finance, LLC, Monthly Class A Member Meeting Notes (May 20, 2020) 
(HARVEST_SSCC_002573-90) (Minutes of Harvest's Monthly Class A Members Meeting, May 20, 2020). 
564 Call between Staff, Small Business Administration, Office of Inspector General, with Majority Staff, 
Select Subcommittee on the Coronavirus Crisis (May 5, 2022).  
565  Id. 
566 Is Womply Getting Whomped with PPP Fraud?, Frank on Fraud (May 2, 2021) (online at 
https://frankonfraud.com/fraud-trends/is-womply-getting-whomped-with-ppp-fraud/). 
567 Id. 
568 Email from Toby Scammell, Chief Executive Officer, Womply, Inc., to Staff, Small Business 
Administration (May 3, 2021) (House_Select_000000157-61). 
569 Federal Aid for Businesses Struggling During Pandemic Helped Fund Orange County Gangs, Records 
Show, WFTV9 (Aug. 11, 2021) (online at https://wftv.com/news/local/orange-county/federal-aid-businesses-
struggling-during-pandemic-helped-fund-orange-county-gangs-records-
show/D5GVV4XO6REJVBKYD6ADTAB43U/). 
570 Id. 
571 Id. 
572 Metropolitan Bureau of Investigation Case Number:  20N-2049.  
573 Id. 
 
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574 Id. 
575 Id. 
576 Kabbage:  The Care and Feeding of a Fintech Unicorn, Forbes (Oct. 30, 2019) (online at 
www.forbes.com/sites/geristengel/2019/10/30/kabbage-the-care-and-feeding-of-a-fintech-
unicorn/?sh=4539667bc212); Small Business Loan Platform Kabbage Nabs $250M From Softbank, TechCrunch 
(Aug. 3, 2017) (online at https://techcrunch.com/2017/08/03/small-business-loan-platform-kabbage-nabs-250m-
from-softbank/).  
577 Kabbage:  The Care and Feeding of a Fintech Unicorn, Forbes (Oct. 30, 2019) (online at 
www.forbes.com/sites/geristengel/2019/10/30/kabbage-the-care-and-feeding-of-a-fintech-
unicorn/?sh=4539667bc212); Small Business Loan Platform Kabbage Nabs $250M From Softbank, TechCrunch 
(Aug. 3, 2017) (online at https://techcrunch.com/2017/08/03/small-business-loan-platform-kabbage-nabs-250m-
from-softbank/). 
578 CARES Act Section 1102 Lender Agreement for Kabbage, Inc. (Apr. 9, 2020) (AMEX-SSCC-
00000001-06). 
579 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Nov. 15, 2021). 
580 With the PPP Fintech Comes of Age, Fintech Nexus News (June 24, 2020) (online at 
https://news.fintechnexus.com/with-the-ppp-fintech-comes-of-age/). 
581 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (August 12, 2021). 
582 Project on Government Oversight, Lamborghinis, Strip Clubs, Bogus Companies, and Lies (Oct. 8, 
2020) (online at www.pogo.org/investigation/2020/10/lamborghinis-strip-clubs-bogus-companies-and-lies).  
583 How Newbie Firms Got PPP Loans Through Quickie Lender Kabbage, Miami Herald (Sept. 10, 2020) 
(online at www.miamiherald.com/news/state/florida/article245599035.html). 
584 Hundreds of PPP Loans Went to Fake Farms in Absurd Places, ProPublica (May 18, 2021) (online at 
www.propublica.org/article/ppp-farms).  
585 How Newbie Firms Got PPP Loans Through Quickie Lender Kabbage, Miami Herald (Sept. 10, 2020) 
(online at www.miamiherald.com/news/state/florida/article245599035.html). 
586 Criminal Indictment, United States of America v. Jason Lawrence Geiger, No. 4:22-CR-110 (E.D. Tex. 
May 12, 2022) (online at https://int.nyt.com/data/documenttools/power-ranger-charges/4e48d1f00476d0a7/full.pdf).  
587 Alvarez & Marsal Holdings, LLC, Paycheck Protection Program Assessment of Kabbage, Inc. (June 11, 
2020) (KAB_SUBC_0000000102-31). 
588 Id. 
589 Id. 
590 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Aug. 12, 2021). 
591 Alvarez & Marsal Holdings, LLC, Paycheck Protection Program Assessment of Kabbage, Inc. (June 11, 
2020) (KAB_SUBC_0000000102-31). 
592 Email from Staff, Kabbage, Inc., to Staff, Kabbage, Inc. (July 20, 2020) (AMEX-SSCC-00020140-45). 
593 Id. 
 
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594 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Aug. 12, 2021); Letter from American Express Travel Related Services Company, Inc. to Chairman James E. 
Clyburn, Select Subcommittee on the Coronavirus Crisis (July 28, 2021). 
595 Slack Messages between Staff, Kabbage, Inc. (July 16, 2020) (AMEX-SSCC-00019821-25). 
596 Id. 
597 Id. 
598 Id. 
599 Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection 
Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (interim final rule). 
600 How Kabbage Saved its Small Business Lending Operation in the Middle of the Pandemic, CNBC (June 
17, 2020) (online at www.cnbc.com/2020/06/17/kabbage-turned-to-doling-out-ppp-loans-to-save-its-lending-
business.html); Unforgiven:  Two Years Later, Small Businesses Still Waiting for Promised PPP Loan Forgiveness, 
Stars and Stripes (Mar. 2, 2022) (online at www.stripes.com/covid/2022-03-02/two-years-later-small-businesses-
wait-ppp-loan-forgiveness-coronavirus-5201865.html). 
601 Letter from American Express Travel Related Services Company, Inc. to Chairman James E. Clyburn, 
Select Subcommittee on the Coronavirus Crisis (Aug. 9, 2021). 
602 Id. 
603 Letter from American Express Travel Related Services Company, Inc. to Chairman James E. Clyburn, 
Select Subcommittee on the Coronavirus Crisis (July 28, 2021); Letter from American Express Travel Related 
Services Company, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Aug. 9, 
2021). 
604 Letter from American Express Travel Related Services Company, Inc. to Chairman James E. Clyburn, 
Select Subcommittee on the Coronavirus Crisis (Aug. 9, 2021); Briefing by Staff, KServicing, to Staff, Select 
Subcommittee on the Coronavirus Crisis (Mar. 29, 2022); Emails between Staff, Kabbage, Inc. (AMEX-SSCC-
00020672-76).  
605 Email from Staff, Kabbage, Inc., to Staff, Kabbage, Inc. (Apr. 8, 2020) (AMEX-SSCC-00020672-76). 
606 Email from Staff, Kabbage, Inc., to Spencer Robinson, Head of Strategy, Kabbage, Inc. (July 7, 2020) 
(AMEX-SSCC-00020917-18); Email from Spencer Robinson, Head of Strategy, Kabbage, Inc., to Staff, Kabbage, 
Inc. (July 8, 2020). 
607 Small Business Administration, Business Loan Program Temporary Changes; Paycheck Protection 
Program, 85 Fed. Reg. 20811 (Apr. 15, 2020) (interim final rule). 
608 Slack Messages between Staff, Kabbage, Inc. (June 26, 2020) (AMEX-SSCC-00018972-74). 
609 Slack Messages between Staff, Kabbage, Inc. (June 3, 2020) (AMEX-SSCC-00019816-20). 
610 Slack Messages between Staff, Kabbage, Inc. (June 16, 2020) (AMEX-SSCC-00019821-25). 
611 Id. 
612 Slack Messages between Staff, Kabbage, Inc. (Apr. 20, 2020) (AMEX-SSCC-00019569-78). 
 
613 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Aug. 12, 2021). 
614 In response to a request for American Express to confirm whether Kabbage had “committees, 
subcommittees, or formal meetings of any kind that addressed financial crime, financial crime compliance, or fraud 
risks,” American Express stated that it’s “current understanding from discussions with former Kabbage employees is 
the following: Although there were no committees at Kabbage dedicated solely to discussing and addressing fraud 
and financial crime-related issues, senior leadership at Kabbage did hold regular meetings discussing fraud-related 
 
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issues alongside other PPP-related issues.” Further American Express confirmed that there were no “minutes of 
senior leadership meetings.”  Letter from American Express Travel Related Services Company, Inc. to Chairman 
James E. Clyburn, Select Subcommittee on the Coronavirus Crisis (Nov. 4, 2021); see, e.g., Department of the 
Treasury, Office of the Comptroller of the Currency, Director’s Book:  Role of Directors for National Banks and 
Federal Savings Associations (Nov. 2020) (online at www.occ.gov/publications-and-resources/publications/banker-
education/files/pub-directors-book.pdf); Federal Deposit Insurance Corporation, Compliance Management System 
(online at www.fdic.gov/news/financial-institution-letters/2006/2cep_compliance.pdf) (accessed Nov. 17, 2022).  
615 Letter from Cross River Bank to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (Sep. 12, 2022), CRB_Subcom_0003445. 
616 Email from Deepesh Jain, Head of Capital Markets and Treasury, Kabbage, Inc. (July 18, 2020) 
(AMEX-SSCC-00020140-45). 
617 Id. 
618 Email from Staff, Wells Fargo Bank, to Deepesh Jain, Head of Capital Markets and Treasury, Kabbage, 
Inc. (July 17, 2020) (AMEX-SSCC-00020140-45). 
619 Email from Spencer Robinson, Head of Strategy, Kabbage, Inc., to Deepesh Jain, Head of Capital 
Markets and Treasury, Kabbage, Inc. (July 17, 2020) (AMEX-SSCC-00020160-61). 
620 Email from Scott Askins, General Counsel, Kabbage, Inc., to Deepesh Jain, Head of Capital Markets 
and Treasury, Kabbage, Inc. (July 17, 2020) (AMEX-SSCC-00020160-61). 
621 Email from Staff, Citibank, N.A., to Spencer Robinson Head of Strategy, Kabbage, Inc. (July 31, 2020) 
(AMEX-SSCC-00020876). 
622 Id. 
623 Email from Kabbage, Inc., to Deely Nuts (KAB_SUBC_0000002327-29). 
624 Department of the Treasury, Internal Revenue Service, 2021 Instructions for Schedule F (Dec. 16, 2021) 
(online at www.irs.gov/pub/irs-pdf/i1040sf.pdf).  
625 Schedule C for Deely Nuts (2019) (KAB_SUBC_000002332-33); Department of the Treasury, Internal 
Revenue Service, 2021 Instructions for Schedule C (Dec. 21, 2021) (online at www.irs.gov/pub/irs-pdf/i1040sc.pdf).  
626 Schedule C for Deely Nuts (2019) (KAB_SUBC_0000002332-33). 
627 Id. 
628 New York University, Operating and Net Margins (Jan. 2022) (online at 
https://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/margin.html).  
629 Schedule C for Deely Nuts (2019) (KAB_SUBC_000002332-33). 
630 Paycheck Protection Program Borrower Application Form for Deely Nuts (July 30, 2020) 
(KAB_SUBC_0000002394-401); Vacation Rentals LBI, Listing # 1933 (online at 
www.vacationrentalslbi.com/listing.1933#overview) (accessed Nov. 17, 2022).  
631 Email from Kabbage, Inc., to SHAILA BIG FRESH ORANGES (KAB_SUBC_0000004114-16). 
632 Hundreds of PPP Loans Went to Fake Farms in Absurd Places, ProPublica (May 18, 2021) (online at 
www.propublica.org/article/ppp-farms); Feds Approved PPP Loans for Likely Nonexistent Orange Groves in 
Minnesota, Alpha News (May 21, 2021) (online at https://alphanews.org/feds-approved-ppp-loans-for-likely-
nonexistent-orange-groves-in-minnesota/). 
633 Paycheck Protection Program Borrower Application Form for SHAILA BIG FRESH ORANGES (Aug. 
20, 2020) (KAB_SUBC_0000002717-25); Schedule C for SHAILA BIG FRESH ORANGES (2019) 
(KAB_SUBC_0000002738-39). 
 
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634 Schedule C for SHAILA BIG FRESH ORANGES (2019) (KAB_SUBC_0000002738-39); Zillow, 606 
Clay St, Mantorville, MN 55955 (online at www.zillow.com/homedetails/606-Clay-St-Mantorville-MN-
55955/106646454_zpid/) (accessed Nov. 17, 2022).  
635 Kabbage, Inc., Fraud Alert for Strawberry Joseph Schrempp – Fake Passport (July 29, 2020) 
(KAB_SUBC_0000003165-67); Small Business Administration, Promissory Note for Strawberry Joseph Schrempp 
PPP Loan (July 15, 2020) (KAB_SUBC_0000003179-84); Fraud Alert for Strawberry Joseph Schrempp – Business 
and Personal Risk Indicators (June 27, 2020) (KAB_SUBC_0000003185). 
636 Kabbage, Inc., Fraud Alert for Strawberry Joseph Schrempp – Fake Passport (July 29, 2020) 
(KAB_SUBC_0000003165-67); Small Business Administration, Promissory Note for Strawberry Joseph Schrempp 
PPP Loan (July 15, 2020) (KAB_SUBC_0000003179-84); Fraud Alert for Strawberry Joseph Schrempp – Business 
and Personal Risk Indicators (June 27, 2020) (KAB_SUBC_0000003185). 
637 FederalPay.org, PPP Loan Data – Strawberry Joseph Schrempp, Hartington, NE (online at 
www.federalpay.org/paycheck-protection-program/strawberry-joseph-schrempp-hartington-ne) (accessed Nov. 17, 
2022).  
638 Schedule C for STRAWBERRY JOSEPH SCHREMPP (2019) (KAB_SUBC_0000002337-38); 
Paycheck Protection Program Borrower Application Form for STRAWBERRY JOSEPH SCHREMPP (July 15, 
2020) (KAB_SUBC_0000003171-78); Email from Kabbage, Inc. to STRAWBERRY JOSEPH SCHREMPP 
(KAB_SUBC_0000003195-96); Schedule C for Tomato Cramber (2019) (KAB_SUBC_0000002343-44); Small 
Business Administration, Promissory Note for Tomato Cramber PPP Loan (Aug. 14, 2020) 
(KAB_SUBC_0000002526-33); Email from Kabbage, Inc. to Tomato Cramber (KAB_SUBC_0000003292-94 ); 
Schedule C for RITTER WHEAT CLUB (2019) (KAB_SUBC_0000002319-20); Schedule C for RITTER WHEAT 
CLUB (2019) (KAB_SUBC_0000002386-87); Small Business Administration, Promissory Note for RITTER 
WHEAT CLUB (July 9, 2020) (KAB_SUBC_0000002379-84); Email from Kabbage, Inc. to RITTER WHEAT 
CLUB (KAB_SUBC_0000003057-59); Paycheck Protection Program Borrower Application Form for BEEFY 
KING (Aug. 13, 2020) (KAB_SUBC_0000002488-93); Schedule C for BEEFY KING (2019) 
(KAB_SUBC_0000002364-65); Small Business Administration, Promissory Note for BEEFY KING PPP Loan 
(Aug. 13, 2020) (KAB_SUBC_0000002498-503); Email from Kabbage, Inc. to BEEFY KING 
(KAB_SUBC_0000003100-01).  
639 Email from Staff, Kabbage, Inc., to Danny Eidson, Chief Financial Officer, Kabbage, Inc. (May 19, 
2021) (KAB_SUBC_0000000686-90). 
640 Paycheck Protection Program Borrower Application Form for RITTER WHEAT CLUB (July 9, 2020) 
(KAB_SUBC_0000002371-72). 
641 Email from Sam Taussig, Head of Policy, Kabbage, Inc., to Paul Bernardini, Head of Communications, 
Kabbage, Inc. (May 19, 2020) (AMEX-SSCC-00023170-73). 
642 Id. 
643 Redfin, 143 W New Jersey Ave, Long Beach, NJ 08008 (online at www.redfin.com/NJ/Long-Beach/143-
W-New-Jersey-Ave-08008/home/37424523) (accessed Nov. 17, 2022); Schedule C for BEEFY KING (2019) 
(KAB_SUBC_0000002364-65). 
644 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 17, 2021); Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(Sept. 9, 2022); AmEx in Advanced Talks to Buy SoftBank-Backed Kabbage, Bloomberg (Aug. 11, 2020) (online at 
www.bloomberg.com/news/articles/2020-08-10/amex-said-to-be-in-advanced-talks-to-buy-softbank-backed-
kabbage?leadSource=uverify%20wall).  
645 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 17, 2021). 
646 Id. 
 
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647 Letter from American Express Travel Related Services Company, Inc. to Chairman James E. Clyburn, 
Select Subcommittee on the Coronavirus Crisis (May 20, 2022). 
648 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 17, 2021). 
649 How Newbie Firms Got PPP Loans Through Quickie Lender Kabbage, Miami Herald (Sept. 10, 2020) 
(online at www.miamiherald.com/news/state/florida/article245599035.html). 
650 Email from Counsel, KServicing, Inc., to Majority Staff, Select Subcommittee on the Coronavirus Crisis 
(Nov. 21, 2022) (“[T]he short answer is that KServicing just doesn’t have this information (funding, resources 
following Amex transaction).  The accounts KServicing was using post-Amex transaction were closed some time 
ago and they don’t have access to those records.”). 
651 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 17, 2021). 
652 Id. 
653 AmEx’s Purchase of Online Lender Kabbage Left Desperate PPP Borrowers in the Cold, CNBC (Apr. 
7, 2021) (online at www.cnbc.com/2021/04/07/amex-acquisition-of-online-lender-kabbage-hurt-ppp-
borrowers.html).  
654 Two Years Later, Small Business Still Await PPP Forgiveness, Miami Herald (Mar. 2, 2022) (online at 
www.miamiherald.com/news/business/banking/article258866193.html).  
655 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 17, 2021). 
656 Id. 
657 Letter from Kabbage, Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(Aug. 12, 2021). 
658 Declaration of Deborah Reiger-Paganis in Support of the Chapter 11 Petitioners and First-Day 
Pleadings, In re Kabbage, Inc. D/B/A KServicing, et al, No. 22-10951 (Bankr. D. Del. Oct. 4, 2022).  
659 Omni Agent Resolution, KServicing, Press Release: KServicing Announces It Will Implement Its 
Winddown Through Streamlined Chapter 11 Proceedings (Oct. 3, 2022) (online at 
https://casedocs.omniagentsolutions.com/cmsvol2/pub_47454/c90dc082-b15b-4cb7-a558-
efad86b79e04_kservicing-press-release.pdf).  
660 Declaration of Deborah Reiger-Paganis in Support of the Chapter 11 Petitioners and First-Day 
Pleadings, In re Kabbage, Inc. D/B/A KServicing, et al, No. 22-10951 (Bankr. D. Del. Oct. 4, 2022).  
661 American Express, Kabbage Funding From American Express (online at 
www.americanexpress.com/en-us/business/blueprint/business-line-of-credit/) (accessed Nov. 18, 2022).  
662 Declaration of Deborah Reiger-Paganis in Support of the Chapter 11 Petitioners and First-Day 
Pleadings, In re Kabbage, Inc. D/B/A KServicing, et al, No. 22-10951 (Bankr. D. Del. Oct. 4, 2022).  
663 BlueVine, About Us – Small Business Banking (online at www.bluevine.com/about/) (accessed Nov. 18, 
2022); BlueVine, About BlueVine (online at 
http://web.archive.org/web/20200220155357mp_/https:/www.bluevine.com/about/) (accessed Nov. 18, 2022); 
BlueVine, Paycheck Protection Program (online at www.bluevine.com/paycheck-protection-program/) (accessed 
Nov. 18, 2022); Letter from BlueVine Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
Crisis (June 11, 2021). 
664 Complaint, United States v. Keith Nicoletta, No. 8:20-MJ-02027-JSS (M.D. Fl. Oct. 9, 2020); 
ProPublica – Tracking PPP, West Coast Cores LLC (May 15, 2020) (online at 
https://projects.propublica.org/coronavirus/bailouts/loans/west-coast-cores-llc-6829417401). 
 
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665 Id. 
666 Report and Recommendation, United States v. Brenizer, No. 0:20-cr-00177-ECT-HB (D. Minn. Aug. 9, 
2021).  
667 Criminal Complaint, United States v. Augustin, No. 1:20-mj-02207-DAR (N.D. Ohio July 28, 2020). 
668 Criminal Complaint, United States v. Bellamy, No. 20-mj-6428-AOV (S.D. Fl. Sept. 10, 2020).  
669 “Biggest Fraud in a Generation”: The Looting of the Covid Relief Program Known as PPP, Yahoo! 
(Mar. 28, 2022) (online at www.yahoo.com/now/biggest-fraud-generation-looting-covid-195900725.html); 
Department of Justice, Office of Public Affairs, Press Release:  Seven Members of Los Angeles-Based Fraud Ring 
Sentenced for Multimillion-Dollar COVID-19 Relief Scheme (Nov. 16, 2021) (online at 
www.justice.gov/opa/pr/seven-members-los-angeles-based-fraud-ring-sentenced-multimillion-dollar-covid-19-
relief); Government’s Sentencing Position for Defendant Richard Ayvazyan, United States v. Ayvazyan, No. 2:20-cr-
00579-SVW (C.D.C. Nov. 10, 2021).  
670 Celtic Bank, Risk Committee Meeting Presentation (May 18, 2021) (Celtic_SSCC_000125-27). 
671 Id.; When asked by Select Subcommittee staff, Celtic representatives acknowledged that Bluevine had 
the highest rate of fraud among Celtic’s partners, but attributed that trend to Bluevine’s outreach to markets where 
neither Celtic nor Bluevine had a preexisting, known client base with historical customer data.  Briefing by Nissen 
Liddiard, Senior Vice President, and Todd Boren, President and Chief Operating Officer, Celtic Bank, to Staff, 
Select Subcommittee on the Coronavirus Crisis (Apr. 21, 2022). 
672 Celtic Bank, Risk Committee Meeting Presentation (May 18, 2021) (Celtic_SSCC_R_000125-27). 
673 Briefing by Nissen Liddiard, Senior Vice President, and Todd Boren, President and Chief Operating 
Officer, Celtic Bank, to Staff, Select Subcommittee on the Coronavirus Crisis (Apr. 21, 2022); Small Business 
Borrower Sues Kabbage, PYMNTS (Nov. 1, 2017) (online at https://pymnts.com/cryptocurrency/2022/ftx-uncovers-
1-24b-in-cash-ahead-of-bankruptcy-hearing/). 
674 The Tiny Bank That Got Pandemic Aid to 100,000 Small Businesses, New York Times (June 30, 2020) 
(online at www.nytimes.com/2020/06/23/business/paycheck-protection-program-cross-river-bank.html).  
675 Letter from BlueVine Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(Sept. 9, 2022) (noting that, despite Bluevine also being approved as a direct PPP lender, Bluevine was not aware of 
any outreach from SBA about its fraud controls outside of OIG requests for information concerning individual 
applicants under investigation).  
676 BlueVine Inc., Legal Team and Risk Team Employee Counts (BV_SSCC_0004092-93); BlueVine Inc., 
Employee Trainings (2019) (BV_SSCC_0004094-144); Letter from BlueVine Inc. to Chairman James E. Clyburn, 
Select Subcommittee on the Coronavirus Crisis (Aug. 20, 2021). 
677 Small Business Administration, Office of Inspector General, Improvement Is Needed in SBA’s Oversight 
of Lender Service Providers (Mar. 12, 2015) (Rept. No. 15-06) (online at www.sba.gov/document/report-15-06-
audit-report-15-06-improvement-needed-sbas-oversight-lender-service-providers).  
678 Department of the Treasury, Office of the Comptroller of the Currency, Third-Party Relationships: Risk 
Management Guidance (Oct. 30, 2013) (OCC Bulletin 2013-29) (online at www.occ.gov/news-
issuances/bulletins/2013/bulletin-2013-29.html).  See, e.g., Emails between Staff, BlueVine Inc., and Staff, Cross 
River Bank (Apr. 6, 2020) (BV_SSCC_0000414-15); Emails between Staff, BlueVine Inc., and Staff, Cross River 
Bank (Apr. 6, 2020) (BV_SSCC_0000416-18); Emails between Staff, BlueVine Inc., and Staff, Cross River Bank 
(Apr. 6, 2020) (BV_SSCC_0000425-27); Emails between Staff, BlueVine Inc., and Staff, Cross River Bank (Apr. 6, 
2020) (BV_SSCC_0000428-64); Email from Matt Janiga, Director of Regulatory and Product Legal, BlueVine Inc., 
to Leslie Rinaldi, General Counsel, Celtic Bank (Apr. 15, 2020) (BV_SSCC_0000489); Loan Program Agreement 
between Cross River Bank and BlueVine Capital Inc. (Apr. 5, 2020) (BV_SSCC_0001143-83). 
 
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679 Department of the Treasury, Office of the Comptroller of the Currency, Third-Party Relationships: Risk 
Management Guidance (Oct. 30, 2013) (OCC Bulletin 2013-29) (online at www.occ.gov/news-
issuances/bulletins/2013/bulletin-2013-29.html).  See e.g., Emails between Staff, BlueVine Inc., and Staff, Cross 
River Bank (Apr. 6, 2020) (BV_SSCC_0000414-415); Emails between Staff, BlueVine Inc., and Staff, Cross River 
Bank (Apr. 6, 2020) (BV_SSCC_0000416-18); Emails between Staff, BlueVine Inc., and Staff, Cross River Bank 
(Apr. 6, 2020) (BV_SSCC_0000425-27); Emails between Staff, BlueVine Inc., and Staff, Cross River Bank (Apr. 6, 
2020) (BV_SSCC_0000428-64); Email from Matt Janiga, Director of Regulatory and Product Legal, BlueVine Inc., 
to Leslie Rinaldi, General Counsel, Celtic Bank (Apr. 15, 2020) (BV_SSCC_0000489); Loan Program Agreement 
between Cross River Bank and BlueVine Capital Inc. (Apr. 5, 2020) (BV_SSCC_0001143-83);. 
680 Letter from BlueVine Inc. to Chairman James E. Clyburn, Select Subcommittee on the Coronavirus 
(June 11, 2021). 
681 Email from Shawn P. Brock, Vice President of Strategic Lending Partnerships, Celtic Bank, to Staff, 
BlueVine Inc. (May 2, 2020) (BV_SSCC_0000585-86). 
682 Briefing by Nissen Liddiard, Senior Vice President, and Todd Boren, President and Chief Operating 
Officer, Celtic Bank, to Staff, Select Subcommittee on the Coronavirus Crisis (Apr. 21, 2022). 
683 Celtic Bank Corporation Compliance Committee Meeting Minutes (July 20, 2020) 
(Celtic_SSCC_000014-15); Celtic Bank Corporation Compliance Committee Meeting Minutes (Oct. 23, 2020) 
(Celtic_SSCC_000018-19); Celtic Bank Corporation Compliance Committee Meeting Minutes (Jan. 22, 2021) 
(Celtic_SSCC_000022-23); LinkedIn, Todd Boren (online at www.linkedin.com/in/todd-boren-72818177) (accessed 
Nov. 17, 2022); Celtic Bank Corporation Risk Management Committee Meeting Minutes (Aug. 5, 2020) 
(Celtic_SSCC_000016-17); Celtic Bank Corporation Risk Management Committee Meeting Minutes (Nov. 20, 
2020) (Celtic_SSCC_000020-21); Celtic Bank Corporation Risk Management Committee Meeting Minutes (Feb. 9, 
2021) (Celtic_SSCC_000024-25); Celtic Bank, About Celtic Bank (online at www.celticbank.com/company) 
(accessed Nov. 17, 2022).  
684 See, e.g., Celtic Bank, Risk Committee Meeting Presentation (May 18, 2021) (Celtic_SSCC_R_000125-
27); Celtic Bank, Compliance Committee Presentation (July 20, 2020) (Celtic_SSCC_R_000098-101); Celtic Bank, 
Risk Committee Meeting Presentation (Aug. 5, 2020) (Celtic_SSCC_000102-04). 
685 Briefing by Nissen Liddiard, Senior Vice President, and Todd Boren, President and Chief Operating 
Officer, Celtic Bank, to Staff, Select Subcommittee on the Coronavirus Crisis (Apr. 21, 2022). 
686 Emails between Brad Ziegler, Vice President of Strategic Lending Partnerships, Celtic Bank, and Shawn 
Brock, Vice President of Strategic Lending Partnerships, Celtic Bank (May 15, 2020) (Celtic_SSCC_001063-64); 
Emails between Staff, Celtic Bank (Celtic_SSCC_001226-28); Emails between Staff, Celtic Bank, and Staff, 
BlueVine Inc. (Celtic_SSCC_001021-29); Calendar Invite – Risk Controls for Fraud (May 21, 2020) 
(Celtic_SSCC_001041). 
687 Emails between Pooja Elhance, Head of Compliance Strategy and Operations, BlueVine Inc., and Todd 
Boren, Chief Risk Officer, Celtic Bank (BV_SSCC_0000722-23); Emails between Staff, BlueVine Inc., and Staff, 
Celtic Bank (Celtic_SSCC_001086-90); Email from Gil Rosenthal, Vice President of Risk Operations, BlueVine 
Inc., to Staff, Celtic Bank (June 7, 2020) (BV_SSCC_0000744-47); Emails between Staff, Celtic Bank, and Staff, 
BlueVine Inc. (Celtic_SSCC_001160-63). 
688 See Celtic Bank, Risk Committee Meeting Presentation (May 18, 2021) (Celtic_SSCC_R_000125-27). 
689 Id. 
690 Emails between Todd Boren, Chief Risk Officer, and Staff, Celtic Bank (June 18, 2020) 
(Celtic_SSCC_001140); Email from Staff, Celtic Bank, to Staff, BlueVine Inc. (July 21, 2020) 
(BV_SSCC_0000832); Emails between Staff, Celtic Bank, and Staff, BlueVine Inc. (Celtic_SSCC_001011-14); 
PPP 2 Fraud Mitigation Measures – High Level Overview Presentation (Jan. 2021) (Celtic_SSCC_001272-84); 
Emails between Staff, Celtic Bank (Celtic_SSCC_001285); Emails between Staff, Celtic Bank, and Staff, BlueVine 
 
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Inc. (Celtic_SSCC_001232-36); Emails between Staff, Celtic Bank, and Staff, BlueVine Inc. (BV_SSCC_0000973-
88); Emails between Staff, Celtic Bank, and Staff, BlueVine Inc. (BV_SSCC_0000995-96). 
691 Celtic Bank, Compliance Committee Presentation (Apr. 23, 2021) (Celtic_SSCC_R_000119-24). 
692 Id.  Based on subsequent data, Celtic informed the Select Subcommittee that its final estimates for 
Bluevine’s fraud rate was roughly 11% (as a percentage of gross funds) for first-draw loans, declining to 1.7% for 
second-draw loans.  Letter from Celtic Bank Corporation to Staff, Select Subcommittee on the Coronavirus Crisis 
(Sept. 6, 2022).  While Bluevine-facilitated loans have featured heavily in public PPP fraud prosecutions, Bluevine 
also entered the program earlier than Blueacorn and Womply, and (as noted above) partnered with banks that were 
diligent in filing SARs.  The University of Texas study shows that significantly fewer of Cross River’s loans (less 
than 30%) ultimately exhibited potential fraud indicators than those issued by Blueacorn and Womply’s major 
lending partners (which had rates of over 30% to over 50%), while an even smaller percentage of Celtic’s loans 
(approximately 15%) showed fraud indicators; Celtic’s and Cross River’s loans were also less likely to have more 
than one fraud indicator as compared to those of Blueacorn’s and Womply’s partners. 
693 Emails between Staff, Celtic Bank, and Staff, BlueVine Inc. (Celtic_SSCC_001021-29); BlueVine Inc., 
PPP Fraud Controls Overview (June 2020) (Celtic_SSCC_001309-11); Emails between Staff, BlueVine Inc., and 
Staff, Celtic Bank (Celtic_SSCC_001086-90); Emails between Staff, BlueVine Inc., and Staff, Celtic Bank 
(Celtic_SSCC_001156-59); Emails between Staff, BlueVine Inc., and Staff, Celtic Bank (Celtic_SSCC_001114-19); 
Emails between Staff, Celtic Bank, and Staff, BlueVine Inc. (BV_SSCC_0000744-47). 
694 Loan Program Agreement between Cross River Bank and BlueVine Capital Inc. (Apr. 5, 2020) 
(BV_SSCC_0001143-83); Amendment #1 to Loan Program Agreement Made and Entered by BlueVine Inc. (Jan. 6, 
2021) (BV_SSCC_0001075-83). 
695 BlueVine Inc., PPP 2021: Added Fraud Prevention Measures (CRB_Subcom_0003341). 
696 Emails between Staff, Cross River Bank, and Staff, BlueVine Inc. (BV_SSCC_0001058). 
697 Briefing by Herman Man, Chief Product Officer, and Gil Rosenthal, Vice President of Risk Operation, 
BlueVine Inc., to Staff, Select Subcommittee on the Coronavirus Crisis (July 26, 2022). 
698 John M. Griffin, Samuel Kruger, and Prateek Mahajan, Did FinTech Lenders Facilitate PPP 
Fraud?, Journal of Finance, Forthcoming (Aug. 15, 2022) (online at http://dx.doi.org/10.2139/ssrn.3906395). 
699 Id. 
700 Briefing by Nissen Liddiard, Senior Vice President, and Todd Boren, President and Chief Operating 
Officer, Celtic Bank, to Staff, Select Subcommittee on the Coronavirus Crisis (Apr. 21, 2022). 
701 Department of the Treasury, Office of the Comptroller of the Currency, Suspicious Activity Reports 
(SAR) (online at www.occ.treas.gov/topics/supervision-and-examination/bank-operations/financial-
crime/suspicious-activity-reports/index-suspicious-activity-reports.html) (accessed Nov. 18, 2022).  
702 Although the Select Subcommittee did not receive similar correspondence regarding SARs from Cross 
River, some evidence suggests that Cross River too was concerned regarding Bluevine’s timeliness on QAR filings.  
When it re-signed with Bluevine in January 2021, Cross River updated its contract to require that Bluevine “assist 
Bank, within seven (7) Business Days from receipt of all necessary information from Bank . . . with any and all 
fraud review requests from Bank” and to require Bluevine to submit incident reports on suspected fraud within three 
weeks.  Amendment #1 to Loan Program Agreement Made and Entered by BlueVine Inc. (Jan. 6, 2021) 
(BV_SSCC_0001075-83). 
703 Celtic Bank, Compliance Committee Presentation (July 20, 2020) (Celtic_SSCC_00098-101). 
704 Email from Staff, Celtic Bank, to Staff, BlueVine Inc. (July 21, 2020) (BV_SSCC_0000832-33).  
705 Celtic Bank, Compliance Committee Presentation (Oct. 23, 2020) (Celtic_SSCC_R_000105-08). 
706 Email from Nissen Liddiard, Vice President of Compliance, Celtic Bank, to Staff, BlueVine Inc. (Mar. 
30, 2021) (BV_SSCC_0001028-30).   
 
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707 Email from Nissen Liddiard, Vice President of Compliance, Celtic Bank, to Staff, BlueVine Inc. 
(BV_SSCC_0001031-33); Celtic QAR Escalation Enhancements (BV_SSCC_0001049-50). 
708 Small Business Administration, First Draw PPP Loan (online at www.sba.gov/funding-
programs/loans/covid-19-relief-options/paycheck-protection-program/first-draw-ppp-loan) (accessed Nov. 17, 2022) 
(“Neither the government nor lenders will charge small businesses any fees.”). 
709 13 C.F.R. § 103.3 (2022); 13 C.F.R. § 120.1500 (2022). 
710 Small Business Administration, Office of Inspector General, Improvement Is Needed in SBA’s Oversight 
of Lender Service Providers (Mar. 12, 2015) (Rept. No. 15-06) (online at https://oversight.gov/sites/default/files/oig-
reports/OIG_Report_15-06_Lender_Service_Providers.pdf). 
711 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0). 
712 To the extent that SBA’s Office of General Counsel concludes that SBA cannot enact further reforms to 
mitigate risk of fraud to taxpayers within its current statutory framework, OIG should share that information with 
Congress so that Congress can determine whether it can entrust any future emergency relief programs to SBA’s 
stewardship without also passing legislative reforms of SBA’s mandate. 
713 5 U.S.C. § 552a. 
714 Small Business Administration, Office of Capital Access, Lender and Development Company Loan 
Programs (Oct. 1, 2020) (SOP 50 10 6) (online at https://sba.gov/document/sop-50-10-lender-development-
company-loan-programs-0). 
715 Small Business Administration, Office of Inspector General, SBA’s Handling of Potentially Fraudulent 
Paycheck Protection Program Loans (May 26, 2022) (Rept. No. 22-13) (online at 
www.oversight.gov/sites/default/files/oig-reports/SBA/SBA-OIG-Report-22-13.pdf). 
716 31 U.S.C. § 3729. 
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