Court filing

Renewed Motion to Dismiss Superseding Indictment — U.S. v. Reis & Hockridge (N.D. Tex.)

Filed May 29, 2025 in Reis Hockridge; one of 9 filings from this case.

Record facts

Court	U.S. District Court for the Northern District of Texas (Fort Worth Division)
Filed	2025-05-29

U.S. District Court for the Northern District of Texas (Fort Worth Division) · No. 4:24-cr-00287-O · Doc. 181 · 2025-05-29 · Docket on CourtListener

Full text

US-DOCS\160076427.2
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
FORT WORTH DIVISION

UNITED STATES OF AMERICA,
§

Plaintiff,

§
v.

§
Case No. 4:24 CR-00287-O

§
NATHAN REIS and

§
(01)

STEPHANIE HOCKRIDGE, a/k/a

§
(02)
STEPHANIE REIS,

Defendants.

DEFENDANTS’ MEMORANDUM
IN SUPPORT OF THEIR RENEWED JOINT OPPOSED
MOTION TO DISMISS COUNT ONE OF THE SUPERSEDING INDICTMENT

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TABLE OF CONTENTS
Table of Authorities ........................................................................................................................ 3
Discussion ....................................................................................................................................... 9
I.
Count One of the Superseding Indictment Alleges at Least Two Separate
Conspiracies Concerning Separate Rounds of the PPP Program ........................................ 9
A. Count One Alleges Multiple Conspiracies Between April and August 2020,
During the PPP Program’s Initial Round .......................................................................... 10
B. Count One Also Duplicitously Describes a Conspiracy That Aligns with
PPP Round 2 ..................................................................................................................... 11
II.
A Count Is Subject to Dismissal for Duplicity When It Charges More
Than One Crime, Including More Than One Conspiracy ................................................. 13
A. Count One Alleges (at Least) Two Conspiracies and Is Therefore Duplicitous ............... 16
B. The Government’s Cited Authorities Only Reinforce the Duplicity
of Count One ..................................................................................................................... 21
Conclusion .................................................................................................................................... 25
Certificate of Service .................................................................................................................... 27

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TABLE OF AUTHORITIES
Page(s)
Cases

Brooks v. United States,
164 F.2d 142 (5th Cir. 1947) ..................................................................................................... 14
Kotteakos v. United States,
328 U.S. 750 (1946) ........................................................................................................... Passim
United States v. Adan,
913 F. Supp. 2d 555 (D. Tenn. 2012) ........................................................................................ 16
United States v. Cardillo,
2015 WL 3409324 (D.N.J. May 27, 2015) .................................................................................. 4
United States v. Elliot,
571 F.2d 880 (5th Cir. 1978) ..................................................................................................... 15
United States v. Fahra,
643 F. App’x 480 (6th Cir. 2016) .............................................................................................. 15
United States v. Faulkner,
17 F.3d 745 (5th Cir 1994) ................................................................................................. 22, 23
United States v. Guerra-Marez,
928 F.2d 665 (5th Cir. 1991) ..................................................................................................... 16
United States v. Gunselman,
643 F. App’x 348 (5th Cir. 2016) .............................................................................................. 23
United States v. Hinton,
127 F. Supp. 2d 548 (D.N.J. 2000) ...................................................................................... 13, 23
United States v. Jones,
733 F. 3d 574 (5th Cir. 2013) .................................................................................................... 15
United States v. Leadbeater,
No. 13-121-1 (JBS), 2015 WL 567205 (D.N.J. Feb. 10, 2015) .................................................. 4
United States v. Sapyta,
390 F. Supp. 2d 563 (W.D. Tex. 2005) ............................................................................... 13, 23
United States v. Starks,
515 F.2d 112 (3d Cir. 1975) ................................................................................................ 14, 23
United States v. Swafford,
512 F.3d 833 (6th Cir. 2008) ............................................................................................... 14, 15

Rules

Fed. R. Crim. P. 12(b)(3) .............................................................................................................. 13

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SUMMARY AND INTRODUCTION

On May 8, 2025, the Government obtained a Superseding Indictment (Doc. #163) again
alleging, in a single count, that Defendants engaged in one, unified conspiracy to commit PPP
fraud—even though the conduct at issue concerned distinct rounds of the PPP, separated by a five-
month break in funding that was only restarted as a result of a new Congressional enactment on
December 27, 2020. Despite having the opportunity in the Superseding Indictment to properly
separate the multiple conspiracies alleged in the original indictment, the Government has doubled
down on its plainly duplicitous allegations. Defendants therefore renew their motion to dismiss.1
During Round 1 of the Paycheck Protection Program (“PPP”),2 which lasted from April 3,
2020, through August 8, 2020, Mr. Reis is alleged to have worked directly with two3 borrowers to

1 This Court previously held that the Defendants had failed to carry their burden to
demonstrate that Count One should be dismissed “at this stage,” i.e., before trial. See Order (Doc.
#137) at 2. Yet even if this Court were to reach the same conclusion with respect to the Superseding
Indictment, Ms. Hockridge will renew her motion at the conclusion of the prosecution’s case.
Although Ms. Hockridge believes that Count One is duplicitous on its face, she is confident that
as the evidence comes in, it will become all the more evident that Count One alleges multiple
separate conspiracies in a single count. See, e.g., United States v. Leadbeater, No. 13-121-1 (JBS),
2015 WL 567205, at *2–3 (D.N.J. Feb. 10, 2015) (denying pretrial motion to dismiss conspiracy
count for duplicity without prejudice, and inviting defendant to renew his motion “after the
prosecution rests” if the evidence adduced at trial proved multiple conspiracies); United States v.
Cardillo, No. 13-121-2 (JBS), 2015 WL 3409324, at *3 (D.N.J. May 27, 2015) (same).

2 Technically, the “Round 1” of the PPP as described in this memorandum had two separate
phases of its own, but the distinction between those two phases is immaterial to the instant motion.
Thus, for ease of discussion, this memorandum will use “Round 1” to refer to the portion of the
PPP that ran for the four-month period from April 3, 2020, through August 8, 2020, and “Round
2” to refer to the portion of the PPP that ran from January 12, 2021, through May 31, 2021, after
Congress authorized a new round of funding on December 27, 2020, after a five-month hiatus. See
generally Rpt. of. D. Ashier (Doc. #133-2) at ¶¶ 21–43, 49; SBA Inspector General Inspection
Report No. 22-13, “SBA’s Handling of Potentially Fraudulent Paycheck Protection Program
Loans,”
https://www.oversight.gov/sites/default/files/documents/reports/2022-05/SBA-OIG-
Report-22-13.pdf (May 26, 2022) (“SBA Report”).
3 Notably, the original Indictment (Doc. #3) specifically alleged the involvement of two
other coconspirators, but the Superseding Indictment removes those allegations. See generally

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assist them in putting together loan applications that contained false information. Ms. Hockridge
is alleged to have assisted one of these borrowers, but not the other. See Superseding Indictment
(Doc. #163) ¶¶ 17(e)–(f). During Round 2 of the PPP program, which lasted from January 14,
2021, through May 31, 2021, the Defendants’ started a new company, FinCap, Inc. (“FinCap”),
which took on a new role as a lender service provider to two different banks, earning fees not from
borrowers, but from the lenders themselves. Also as a part of that latter round of PPP fund
distribution, Ms. Hockridge created a program called “VIPPP,” which gave personalized service
to certain individuals in applying for loans by recruiting referral agents to identify borrowers in
need of assistance. Through FinCap’s lender service provider business model and the VIPPP
program, the Defendants helped hundreds of thousands of eligible borrowers gain access to PPP
funds.
Round 1 of the PPP, established by the CARES Act, came to a close on August 8, 2020.
At that point, by definition, any conspiracy that the Defendants are alleged to have engaged in had
ended. Prior to that time, the Defendants are alleged to have worked directly with borrowers to
assist them with preparing their PPP loan applications. But as of August 8, 2020, there were no
more applications to submit, no more loans to be funded, and no indication as to whether or when
any additional PPP funds would be made available. Thus, if there had been a conspiracy as the
Superseding Indictment alleges, its objects would have been achieved (or not), and all of the
alleged coconspirators would have exited whatever conspiracy they were engaged in. In short,
whatever conspiracy the Defendants might have allegedly participated up until that time came to
an end, at the latest, on August 8, 2020.

Superseding Indictment (Doc. #163); cf. Indictment (Doc. #3) ¶¶ 11–12 (omitted from
Superseding Indictment).
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It was not until months later, on January 14, 2021, that Round 2 of the PPP program began
(with the publication of an implementing rule) as established and governed by a separate
Congressional enactment, the Economic Aid Act, which set forth new guidelines and processes
for obtaining new PPP loans. According to the Superseding Indictment (Doc. #163), it was in the
lead up to that program that the Defendants “expanded [their] operations through . . . lender service
provider agreement[s]” they entered into in October 2020 and April 2021. See id. ¶ 16(d). However,
the Defendants did not simply “expand” their operations; they started entirely new companies
organized or incorporated in various states including Wyoming, Arizona, and Delaware.
Defendants managed operations across several entities and acted on behalf of multiple lenders to
originate, process, service, and submit loan applications to the SBA from qualified PPP applicants.
Under the lender service provider agreements described in the Superseding Indictment, Defendants’
new company Fin Cap was now entitled to receive payments from lenders for processing borrower
applications. Ms. Hockridge is also alleged during this time period to have separately created a
program known as the “VIPPP” program (which did not exist during the earlier rounds of the PPP)
whereby borrowers were offered a “personalized service” and dedicated support to help navigate
the brand new and often daunting PPP loan submission process. See id. ¶ 16(e).
Despite Rounds 1 and 2 of the PPP being separated in both time and nature—as well as
rapidly evolving conditions and changing regulations and guidance in the midst of a global
pandemic—the Government has attempted to lump together the Defendants’ alleged conduct
during those two disparate rounds of the PPP into a single conspiracy in order to artificially reduce
its burden of proof. Doing so is not only improper as a technical matter of pleading—here, it also
carries the very real risk that the jury could return a nonunanimous verdict regarding supposed
criminal conduct regarding two separate and distinct government programs. And not only are the
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manner and means of the various conspiracies alleged to be different in the Superseding Indictment
itself, but the nature of the allegations against the two defendants in each conspiracy are
fundamentally distinct as well.
During Round 1, Mr. Reis is alleged to have directly helped Mr. Flores submit a false PPP
loan application. Also during Round 1, Mr. Reis and Ms. Hockridge allegedly directly helped
Coconspirator-1 submit a false loan application (though the Superseding Indictment details only
Mr. Reis’s work on that loan). See Superseding Indictment (Doc. 163) ¶ 17(f). During Round 2,
by the Government’s telling, Ms. Hockridge was allegedly the prime mover, being principally in
charge of the VIPPP Program, a separate program that provided a “personalized service” to loan
applicants in exchange for a fee, and which, according to the Superseding Indictment, involved the
recruitment of “conspirators to work as VIPPP referral agents and coach borrowers on how to
submit false PPP loan applications.” Id. ¶ 16(e). The evidence will show that Mr. Reis had little or
no involvement in that program. Instead, Mr. Reis was focused at that time on scaling Fin Cap,
which ultimately helped hundreds of thousands of borrowers gain access to desperately needed
funding in the midst of nationwide shutdowns and unprecedented economic uncertainty. And for
the overwhelming majority of the loans processed by Fin Cap during that latter time period, the
Government does not allege any fraud by the Defendants whatsoever.
The nature of the Government’s evidence in each of the conspiracies alleged in Count One
is also markedly different. To prove that the alleged conspiracy existed during Round 1, the
Government evidently intends to introduce evidence of specific communications between
borrowers and Mr. Reis (not Ms. Hockridge) that had allegedly put him on notice of the falsity of
certain representations made by those borrowers. With respect to Round 2, by contrast, the
Government evidently intends to introduce evidence that Ms. Hockridge conspired with a new
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individual, Eric Karnezis, who was not involved in Defendants’ conduct during Round 1, to submit
fraudulent loan applications through the VIPPP program, although the Government does not allege
that either Defendant had actual knowledge of the falsity of any application submitted by
borrowers working with Mr. Karnezis.4 For Round 1, the Superseding Indictment identifies only
a few allegedly fraudulent loans, with a combined principal of less than $140,000. For Round 2,
the Government has identified more than 400 loans it claims were fraudulently submitted through
the VIPPP program, with a total loan principal exceeding $60 million (more than 400 times the
principal of the loans the Indictment alleges as part of the first conspiracy). Thus, the multiple
conspiracies alleged in Count One are markedly different in terms of their alleged timeframe,
objects, manner, means, scale, participants, and proof.

Mr. Reis and Ms. Hockridge are husband and wife. But that does not make them jointly
and severally liable for one another’s alleged criminal activity. If Count One is permitted to be
tried as a single count, there is a genuine risk that the jury might be invited to convict both
Defendants without reaching unanimity as to which of multiple distinct conspiracies each
defendant participated in (or whether any such conspiracy existed in the first place). And failing
to require Count One to be re-pled before trial will prejudice the Defendants by requiring them to
defend against multiplicitous counts as part of their opening statements and in their presentation
of evidence. This Court should therefore dismiss Count One for improperly lumping together the
alleged conspiracies during the first round of the PPP, which could have ended no later than August

4 Notably, Mr. Karnezis has recently pled guilty in a separate case out of the District of
Oregon for his role in a conspiracy with others to submit fraudulent loans, after he confessed to
the Government that he submitted knowingly false information for potentially hundreds of
borrowers, a fact that, as the evidence will show, he deliberately concealed from Ms. Hockridge
and the VIPPP team.
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8, 2020, and the separate conspiracies alleged to have occurred during the PPP program’s second
round, which did not begin until January 14, 2021.
DISCUSSION
I.
Count One of the Superseding Indictment Alleges at Least Two Separate Conspiracies
Concerning Separate Rounds of the PPP Program

The Superseding Indictment’s Count One purports to allege a single conspiracy to submit,
and cause the submission of, false and fraudulent applications for PPP loans. Superseding
Indictment (Doc. #3) ¶ 14. But as outlined above, the allegations in the Superseding Indictment in
fact describe multiple conspiracies, rendering Count One impermissibly duplicitous. On the one
hand, Count One alleges conspiratorial conduct occurred during Round 1 of the PPP program,
which ran from April to August 2020. See generally Rpt. of. D. Ashier (Doc. #133-2) ¶ 26
(explaining that PPP authorized approved lenders to originate loans starting on April 3, 2020);
SBA Report, supra, at 1 (“Round one of PPP lending closed on August 8, 2020 . . . .”). During
Round 1, Mr. Reis allegedly acted as a consultant to borrowers, assisting individuals and
businesses applying for PPP loans. Superseding Indictment (Doc. #163) ¶¶ 16(a)–(c). Because the
PPP program stopped accepting loan applications on August 8, 2020, any alleged conspiracy (or
conspiracies) relating to that program necessarily concluded on or before that date.
Count One also alleges, as part of the same purported conspiracy, distinct conduct
occurring during Round 2, which created a new process for compensating lenders to incentivize
lending to smaller borrowers. Id. ¶¶ 16(d)–(e). During Round 2, Defendants and unnamed “others”
allegedly signed new contracts with lenders to facilitate PPP loan applications, developed a new
system for helping borrowers apply for loans online, and developed a new VIPPP program to help
borrowers obtain PPP loans. See id.
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Allowing the Government to pursue multiple separate conspiracies described in the
Superseding Indictment under a single count at trial will unfairly prejudice Defendants. Among
other problems, the Government’s attempt to conflate two separate programs that existed in two
distinct time periods poses the “danger[] of transference of guilt from one to another across the
lines separating conspiracies, subconsciously or otherwise.” Kotteakos v. United States, 328 U.S.
750, 774 (1946). Defendants therefore respectfully request that the Court dismiss Count One of
the Superseding Indictment.
A. Count One Alleges Multiple Conspiracies Between April and August 2020, During
the PPP Program’s Initial Round
Count One alleges, in part, that a conspiracy existed beginning in April 2020, when the
first round of the PPP program began, and continued through the conclusion of that round on
August 8, 2020. See generally Rpt. of. D. Ashier (Doc. #133-2) ¶ 26; SBA Report, supra, at 1. The
conspiratorial conduct alleged during Round 1 is extremely limited: it allegedly involved
submitting applications for PPP loans only for the Defendants and two acquaintances—not vast
swaths of the borrowing public. Superseding Indictment ¶ 16(a) (“Beginning in or around April
2020, Reis, Hockridge, and their coconspirators began submitting fraudulent applications for PPP
loans for themselves and their businesses.”); see id. ¶¶ 16(a)–(c), 17(a)–(c), (e)–(f).
More specifically, during Round 1, the Superseding Indictment alleges fraudulent acts by
only Mr. Reis and Ms. Hockridge in submissions for Juuice Inc. and Body Politix LLC, two
businesses owned by them separately. Superseding Indictment (Doc. #163) ¶ 17(a)–(c). The
Superseding Indictment then alleges fraudulent acts by Mr. Reis, Mr. Flores, and other
coconspirators (not Ms. Hockridge) in a single submission for Mr. Flores’s sole proprietorship,
¶ 17(e), and fraudulent acts by Mr. Reis, Coconspirator-1, and (with no details) Ms. Hockridge in
a single submission for Coconspirator-1, ¶ 17(f).
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All of the acts described above are alleged to have occurred between April and August of
2020, and for good reason—as of August 8, 2020, the second round of PPP had ended, and any
conspiratorial objects therefore had either been achieved, or not.
B. Count One Also Duplicitously Describes a Conspiracy That Aligns with PPP Round 2
But Count One’s allegations also embrace an alleged conspiracy in connection with an
entirely separate round of the PPP program established by an entirely different federal law, which
was passed on December 27, 2020, that created an opportunity for borrowers in a new round of
PPP funding starting in January 2021. Round 2 differed in significant respects from the first round
of the PPP—as did the alleged manner and means of any alleged conspiracy with respect to that
second round of the program.
During the first PPP round, “many lenders opted to only accept applications from
preexisting, and typically larger, customers.” Rpt. of D. Abshier (Doc. #133-2) ¶ 27; see also id. ¶
47 (“The report also noted that the initial implementation of the PPP did not prioritize rural and
underserved markets. . . .”). For the second round, however, SBA “took several steps to make the
PPP more accessible for the smallest and most vulnerable business owners,” among other changes.
Id. ¶ 36. For example, the SBA “made clear that self-employed borrowers could submit a draft
(i.e., unfiled) Schedule C to calculate the eligible PPP loan amount,” and also established a “14-
day exclusive period where only those [the smallest businesses] would be able to apply for PPP
loans.” Id. ¶¶ 36, 37. The SBA also reopened the “PPP loan portal to the [community development
financial institutions (“CDFIs”)] and other community financial institutions first” in January 2021;
such non-bank lenders had a “higher proportion of loans under $150,000 and served a greater
percentage of businesses in low-to-moderate income [] areas.” Id. ¶¶ 45, 46.
As described in the Superseding Indictment, after learning of the new regulations that
would be applicable to PPP Round 2, the Defendants each took new and unprecedented steps to
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help meet the long-underprioritized demand for loans among smaller, potentially less sophisticated
borrowers. Mr. Reis, through the newly created Fin Cap company, helped to develop a financial
technology platform to not only originate loans, but also to scale operations, which helped lenders
process PPP applications within the narrow two-and-a-half month window originally set by
Congress. Defendants created a new lender-service-provider business model that provided a
straightforward, online application process for potential borrowers to use in obtaining loans, at no
cost to the borrower. See Superseding Indictment (Doc. #163) ¶ 16(d).
Although the Government identifies the development of Blueacorn’s new lender-service-
provider business model as among the “manner and means” of the conspiracy alleged in Count
One, the Government has not made any allegation that any actions the Defendants took in
developing the new business model were fraudulent in any respect. Indeed, as the evidence will
show, Blueacorn processed more than 750,000 applications for small businesses and others
through its lender-service-provider platform, and the Superseding Indictment only identifies two
borrowers that the Government even claims were known by Defendants to have submitted
fraudulent applications.5
Also during PPP Round 2, Ms. Hockridge separately created the “VIPPP” program—
which did not exist in Round 1—to provide additional assistance to certain individuals and
businesses who sought more personalized service in connection with preparing their loan
applications. See Superseding Indictment (Doc. #163) ¶ 16(e). As part of that program, Count One
alleges that Ms. Hockridge and Mr. Reis recruited others “to work as VIPPP referral agents”

5 The Defendants are even not alleged to have had actual knowledge that the loan
applications alleged to be fraudulently submitted by Eric Karnezis through VIPPP borrowers were
false.
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(which they readily admit) and to “coach borrowers on how to submit false PPP loan applications”
(which they categorically deny). Id.
II.
A Count Is Subject to Dismissal for Duplicity When It Charges More Than One Crime,
Including More Than One Conspiracy

“An indictment is duplicitous when two separate offenses are charged in a single count.”
United States v. Sapyta, 390 F. Supp. 2d 563, 566 (W.D. Tex. 2005); Fed. R. Crim. P.
12(b)(3)(B)(i). A duplicitous indictment “compromises a defendant’s Sixth Amendment right to
know the charges against him.” United States v. Hinton, 127 F. Supp. 2d 548, 553 (D.N.J. 2000).
But more than merely posing notice problems for a defendant, duplicity risks injecting ambiguity
into a jury’s verdict, not to mention the danger of a nonunanimous verdict. A general verdict
against the defendant on one count that contains more than one crime “does not reveal whether the
jury found him guilty of one crime[,] or not guilty [or guilty] of both”; as a result, the verdict will
not show whether the jury was unanimous as to two crimes contained in the single count. United
States v. Starks, 515 F.2d 112, 116 (3d Cir. 1975).

An indictment that combines multiple conspiracies into one count is likewise
duplicitous—and duplicity on a conspiracy charge poses even greater dangers. See generally
Kotteakos, 328 U.S. at 774 (explaining that lumping multiple conspiracies into one count violates
the requirement for “separate statement[s] in different counts of related but distinct ‘acts or
transactions of the same class of crimes or offenses’”); cf. Brooks v. United States, 164 F.2d 142,
143 (5th Cir. 1947) (holding that a trial “was conducted too much . . . on the assumption that it
was immaterial whether the proof showed one conspiracy with which all of the defendants were
connected, or separate conspiracies with which some, but not all, of them were” (citation omitted)).
Allowing the Government to proceed on an erroneous single-conspiracy theory when the
Indictment actually alleges multiple conspiracies risks “imput[ing] to each defendant the acts and
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statements of the others” (and of other supposed coconspirators) “without reference to whether
they related to one of the schemes proven or another, and to find an overt act affecting all in
conduct which admittedly could have affected only some.” Kotteakos, 328 U.S. at 771; cf. United
States v. Swafford, 512 F.3d 833, 843 (6th Cir. 2008) (“[I]nstead of having to prove each of the
multiple conspiracies, which was necessary due to the failure to demonstrate a single conspiracy,
the government offered evidence only as to the alleged single enterprise. Consequently, the jury
could simply seize upon the most significant [inculpatory transactions] . . . and the most suspicious
behavior exhibited by [the defendant] and then apply the evidence against the defendant vis-à-vis
each of the alleged co-conspirators.”); cf. Brooks, 164 F.2d at 143 (holding that, when the
government charges a single conspiracy, “due process as to each defendant require[s] for a
conviction that the evidence be strong enough to exclude every other reasonable hypothesis than
guilt of that defendant on the precise conspiracy charged” (emphasis added)).
In short, as the Supreme Court has held, the Superseding Indictment’s duplicitous approach
poses the “danger[] of transference of guilt from one to another across the line separating
conspiracies, subconsciously or otherwise”—here, a defined temporal line based on the
termination (and later reauthorization) of the PPP itself, shaped by the PPP’s own established
framework. Kotteakos, 328 U.S. at 774; see also United States v. Fahra, 643 F. App’x 480, 493
(6th Cir. 2016) (recognizing that allowing the government to rely on evidence of multiple
conspiracies with many conspirators, but assert only one conspiracy charge, may mislead “the jury
into assuming a union of criminal intent, an agreement to cooperate, and an increased degree of
culpability, thereby causing significant prejudice”).

Multiple factors determine whether a course of conduct represents one, or rather multiple,
conspiracies. An allegedly single conspiracy may in fact be multiple separate conspiracies if they
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occur at separate times, as well as if the “manner and means” of the conspiracies differ. Fahra,
643 F. App’x at 492–93 (holding that proving multiple conspiracies to support a single-conspiracy
count is an impermissible variance). So too when the supposed conspirators do not share a single
goal, are “not truly interdependent or where the various activities sought to be tied together cannot
reasonably be said to constitute a unified scheme.” United States v. Elliot, 571 F.2d 880, 901 (5th
Cir. 1978); Swafford, 512 F.3d at 842 (“The government failed to prove that the methamphetamine
cooks were acting in furtherance of a common goal or that there was any significant
interdependence among them.”); see generally United States v. Jones, 733 F. 3d 574, 580–81 (5th
Cir. 2013) (identifying factors for identifying multiple conspiracies for purposes of double
jeopardy); United States v. Guerra-Marez, 928 F.2d 665, 671 (5th Cir. 1991) (holding that
conspiracies were separate based on an analysis of common goals, nature of the schemes, and
whether participants overlapped); United States v. Adan, 913 F. Supp. 2d 555, 565 (D. Tenn. 2012)
(“[W]hile a single conspiracy does not become multiple conspiracies simply because each member
of the conspiracy does not know every other member, it is necessary to show that each alleged
member agreed to participate in what he knew to be a collective venture directed to a common
goal.” (cleaned up)).

In Kotteakos, for example, the Government charged multiple defendants with one
conspiracy to “induce various financial institutions to grant credit, with the intent that the loans or
advances would then be offered to the Federal Housing Administration for insurance upon
applications containing false and fraudulent information.” 328 U.S. at 752. The alleged conspiracy
was “executed through a common key figure, Simon Brown,” who “undertook to act as a broker
in placing for others loans for modernization and renovation, charging a five percent commission
for his services.” Id. at 752–53. He allegedly knew “when he obtained the loans, that the proceeds
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were not to be used for the purposes stated in the applications.” Id. The Court held that alleged
conduct represented “not . . . a single conspiracy, but . . . several, notwithstanding only one was
charged in the indictment,” explaining that “no connection was shown between” the alleged
conspirators who had “transacted business with Brown relating to National Housing Act Loans,”
except that “Brown had been the instrument in each instance for obtaining the loans.” Id. at 754–
55.
A. Count One Alleges (at Least) Two Conspiracies and Is Therefore Duplicitous
As outlined above and detailed further below, Count One alleges at least two conspiracies
in a single count and is thus duplicitous. Most problematically, it impermissibly melds together
alleged efforts to obtain fraudulent loans on behalf of unrelated borrowers during the first round
of the PPP—which conspiracies, as a basic matter of logic, cannot have continued past August 8,
2020, when that program ended—and the second round of the PPP program, which did not begin
until more than five months after the first round of the program had concluded. The disunity
between the multiple conspiracies alleged in Count One is apparent from their timeframe, objects,
manner, means, participants, scale, and proof.
1. The Multiple Conspiracies Alleged in Count One Occurred at Different Purported
Times
On the one hand, Count One alleges conspiratorial conduct with two borrowers during PPP
Round 1, which stretched from April 3, 2020, through August 8, 2020. See Rpt. of. D. Ashier (Doc.
#133-2) ¶ 26 (explaining that PPP authorized approved lenders to originate loans starting on April
3, 2020); SBA Report, supra, at 1 (“Round one of PPP lending closed on August 8, 2020 . . . .”);
Superseding Indictment (Doc. #163) ¶¶ 16(a)–(c), 17(a)–(c), (e)–(f). Yet it also identifies alleged
conspiratorial conduct occurring occurred thereafter, overlapping with PPP Round 2, when
Congress passed a new law reauthorizing PPP funding and the SBA implemented regulations to
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encourage loans to smaller borrowers. Rpt. of D. Abshier (Doc. #133-2) ¶¶ 34, 36–39; Superseding
Indictment (Doc. #163) ¶¶ 16(d)–(e), 17(d), (g)–(i).
2. The Conspiratorial Conduct Alleged in Count One Did Not Have a Common
Object
During Round 1, the Defendants allegedly obtained fraudulent loans for themselves and
two individuals to obtain payments for their services directly from those borrowers, who paid Mr.
Reis (not Ms. Hockridge) for his consulting services. E.g., Superseding Indictment (Doc. #163) ¶¶
17(a)–(c), (e)–(f). In Round 2, Defendants and “others” are alleged to have committed fraud in
order to collect fees paid by lenders for their work as lender service providers, and Ms. Hockridge
is alleged to have collected fees from borrowers who participated in the VIPPP program. Id.
¶¶ 16(d)–(e).
3. The Multiple Conspiracies Alleged in Count One Are Alleged to Have Employed
Distinct Manners and Means
As part of the conduct alleged during Round 1, the Defendants (in multiple cases, Count
One identifies Mr. Reis alone) and coconspirators allegedly falsified or helped falsify loan-
application documents for borrowers with whom they had direct contact. See Superseding
Indictment (Doc. #163) ¶¶ 17(a)–(c), (e)–(f). As a result, the Defendants understand from their
counsel’s conferences with the Government, the Government hopes to persuade the jury that the
Defendants had direct knowledge that the borrowers’ representations were actually false.
During Round 2, by contrast, the Defendants are alleged to have worked with others at
Blueacorn to “collect[] and review[] applications from potential borrowers” under lender service
provider agreements. Id. ¶ 16(d). Although the Superseding Indictment does not say so, it is
undisputed that applications were sent to Fin Cap through an online portal. The Defendants almost
never had any contact with borrowers who submitted their application directly through that portal
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and therefore would not have had actual knowledge of any false representations in such loans
where they never had contact with the borrowers in question.
Also during Round 2, Ms. Hockridge is alleged to have operated the VIPPP program that
“offered a personalized services to help potential borrowers complete PPP loan applications” and
“recruited coconspirators to work as VIPPP referral agents and coach borrowers on how to submit
false PPP loan applications.” Id. ¶ 16(e). With regard to that aspect of the Round 2 conduct, the
Government apparently contends that Ms. Hockridge joined a conspiracy in which Eric Karnezis
knowingly submitted fraudulent applications on behalf of borrowers. No similar allegations of
recruitment or coaching of recruiters are alleged as part of the first conspiracy—nor could they be,
since the VIPPP program did not even exist at the time of the first conspiracy.
4. The Multiple Conspiracies Alleged in Count One Are Alleged to Have Involved
Different Participants
In Round 1, Mr. Reis was allegedly the prime mover. Indeed, Count One’s allegations
through August 2020 repeatedly focus primarily on him, to the exclusion of Ms. Hockridge: “Reis
created,” ¶ 17(a), “Reis submitted,” ¶ 17(b), “Reis and other conconspirators[] submitted,” ¶ 17(e).
And only Mr. Flores is not alleged to have been involved in any unlawful conduct in Round 2. See
id. ¶ 17(e).
On the other hand, Count One (and, more explicitly, the Government’s discussions with
the undersigned) suggests that Ms. Hockridge was the prime mover in during Round 2, particularly
the VIPPP program. See id. ¶ 16(e) (“Hockridge and others offered a personalized service to help
potential borrowers . . . .”). Moreover, Lender-2, as well as “referral agents,” were only involved
in Round 2, being are notably absent from any allegations relating to Round 1. Id. ¶ 16(d)–(e).
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5. The Scale of the Round 1 and Round 2 Conduct Described in Count One Is
Markedly Different
The conduct described in Count One relating to Round 1 concern Defendants (primarily
Mr. Reis) and conspirators submitting allegedly fraudulent loan applications for themselves. The
conduct described during Round 2 concerns a larger alleged enterprise: an arrangement with two
lenders to help process borrower applications, and a VIPPP network of referral agents to help
coach borrowers on applying for loans. During Round 1, the total loan principal the Superseding
Indictment contends was fraudulent was not even $140,000; in Round 2, the loans alleged to be
fraudulent by the Government total to more than $60 million. And in Round 1, the Superseding
Indictment identifies only four allegedly fraudulent loans; in Round 2, the Government has
identified more than 400.
6. The Anticipated Proof Regarding Each Alleged Conspiracy Differs Drastically
With respect to the conduct described in Round 1, the Government’s anticipated proof is
relatively straightforward: the Government evidently seeks to introduce written communications
and witness testimony from particular borrowers, as well as financial records of the Defendants
themselves, in an effort to establish that four Round 1 loans were known by the Defendants (and
primarily, Mr. Reis) to contain materially false information. Thus, the likely evidence presented
by both parties with respect to those four Round 1 loans will likely focus on the Defendants’ direct
knowledge (or lack thereof) of the truth or falsity of specific statements in a relatively small
universe of loan applications.
The anticipated evidence with regard to the Round 2 loans, however, bears little to no
resemblance to the expected proof relating to the Round 1 loans. With regard to Round 2, the
Government does not allege either Defendant had actual knowledge of the falsity of statements in
virtually any of the loan applications that were processed during Round 2, but that they (or at least
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Ms. Hockridge) encouraged a single referral agent, Eric Karnezis, to falsify information in
applications prepared on behalf of borrowers he was referring in order to allow them to obtain
loans they would not otherwise qualify for. The conversations in question were not recorded or
reproduced in writing; instead, whether they occurred or not depends almost entirely on the say-
so of Mr. Karnezis. In other words, proof of the any conspiracy in Round 2 will rely almost entirely
on uncorroborated witness testimony to establish whether any unlawful agreement even existed.
And importantly, Mr. Reis is not even alleged by the Government to have been a part of any such
conversations. By alleging the multiple conspiracies as one, the Government hopes to
impermissibly bootstrap the alleged criminal intent of the Defendants with respect to loans they
are alleged to have directly discussed with borrowers during Round 1, to shore up the
unsubstantiated claims of Mr. Karnezis as to instructions allegedly given to him by Ms. Hockridge
(again, not Mr. Reis) during Round 2.
While all of the distinctions detailed above demonstrate the critical difference between the
multiple conspiracies duplicitously charged in Count One, the night-and-day distinction in the
proof is perhaps the most pernicious. Ms. Hockridge is alleged to have had almost nothing to do
with any criminal conduct during Round 1, and Mr. Reis is alleged to have almost nothing to do
with any criminal conduct during Round 2. Disproving the Government’s allegations with respect
to Round 1 will simply require the Defendants to show that they were not aware of any falsity in
the applications they submitted, or assisted others in submitting; with respect to the Government’s
Round 2 theory, however, such evidence would be no defense. Instead, to disprove the
Government’s allegations relating to Round 2, the Defendants will have to persuade the jury that
Mr. Karnezis’s claims of having received direction from Ms. Hockridge on how to “coach”
borrowers into submitting fraudulent applications are not to be believed.
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The conflation of the multiple conspiracies alleged in Count One therefore has the potential
to cause substantial prejudice to the Defendants and confusion for the jury in their respective trials.
Imagine that Jurors 1 through 6 do not believe that either of the Defendants knew of any false
information in any application submitted during the Round 1, but Jurors 7 through 12 do. Now
imagine that Jurors 7 through 12 do not believe Mr. Karnezis’s self-serving (and late coming)
efforts to implicate Ms. Hockridge and think the Defendants did not know of any fraud in
Round 2—but Jurors 1 through 6 find Mr. Karnezis’s story to be credible. If the multiple
conspiracies alleged in Round 1 and 2 had been properly pled as separate counts, the jury would
hang on each of them—but because of the Government’s effort to lump to the two distinct rounds
of the PPP program together, the jury might nonetheless convict.
There are many more hypotheticals that could be invented, each more problematic than the
last. Under any of them, the potential prejudice to the Defendants is extreme. But there is no
prejudice to the Government whatsoever from requiring the jury to return separate verdicts on the
multiple distinct conspiracies alleged in Counts One, thereby ensuring that their verdict—whether
to convict or to acquit—will be unanimous.
B. The Government’s Cited Authorities Only Reinforce the Duplicity of Count One
The Government has relied on United States v. Faulkner, 17 F.3d 745 (5th Cir 1994) to
argue that the differences between the conduct described in Round 1 and Round 2 merely reflect
different “sub-agreements” and “illegal objectives” under one conspiratorial umbrella and that
Count One is therefore not duplicitous. See Resp. (Doc. #117) at 2. But the Faulkner court made
clear that a single conspiratorial umbrella requires commonality, e.g., a “common goal,”
“participants play[ing] different but important functions necessary to its success,” and
“considerable overlapping of participants.” Id. at 761. None of those factors is present here.
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Indeed, the facts establishing a single conspiratorial umbrella in Faulkner differ
fundamentally from the facts here. There, the “scheme was simple in concept, though complex in
its execution,” and bore “similarities to a classic Ponzi scheme.” Id. at 754. The conspiracy
followed a regular pattern involving “two initial participants at the top,” “intermediate purchasers,”
investors, and lenders. Id. The conspirators’ dealings were “such that all were integral and
important participants” in the conspiracy. Id. at 760. Here, by contrast, different PPP rounds clearly
demarcate a boundary between conspiracies. The alleged efforts during Round 1 to obtain
fraudulent loans for Defendants and two others did not share a common pattern with the vast
enterprise started by Defendants in Round 2, which involved hundreds of thousands of borrowers
applying through an online portal and a newly established “VIPPP” program to refer borrowers to
Blueacorn. Defendants’ work with respect to Round 1 was conceptually and functionally distinct
from the much larger operation starting in Round 2. More specifically, as the Superseding
Indictment itself shows, Ms. Hockridge was not integral to the alleged misconduct during Round 1,
and Mr. Reis was not integral to the VIPPP program that only began in Round 2. Thus, the
Government’s cited authority does not justify its effort to lump at least two distinct endeavours, at
different times, under different regulatory frameworks, into a single conspiracy.
II.
In Light of Its Duplicity, This Court Must Dismiss Count One of the Indictment

As explained above, the Government gravely erred (twice) by charging more than one
conspiracy in Count One. Its decision to do so risks both a nonunanimous verdict as to which
Defendant participated in which conspiracy, as well as the improper transference of guilt across
the multiple distinct conspiracies. As a result, the duplicitous Superseding Indictment warrants
dismissing the offending count, thereby requiring the Government either to obtain a new
indictment with the separate offenses charged separately, or to go to trial on the remaining counts
of the Superseding Indictment. See Sapyta, 390 F. Supp. 2d at 566–67; United States v. Gunselman,
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643 F. App’x 348, 353 (5th Cir. 2016); Starks, 515 F.2d at 118; Hinton, 127 F. Supp. 2d at 554.
No remedy short of dismissal will be adequate to protect the Defendants from the unfair prejudice
inherent in being tried on Count One, given its duplicity.
The Government has argued that the Court may cure any duplicity problem with an
instruction that the jury must find unanimously that the Defendant is guilty with respect to at least
one distinct act. Resp. (Doc. #117) at 5. But that instruction would not solve the problem. By the
time the jury hears instructions, they will have already heard a multi-day trial in which the
Government presented evidence and argument as if the Defendants engaged in a single conspiracy.
Such a presentation risks hopelessly confusing the jury, inviting transference of guilt across
conspiracies and a non-unanimous verdict. Moreover, merely instructing the jury that they must
be unanimous as to a “distinct act” does not clearly explain the need to differentiate between
separate conspiracies during different rounds of the PPP—the first of which entailed a small set of
loans for borrowers directly connected to one or both of the defendants, with total loan proceeds
under $140,000, and the other a referral network involving over $60 million in loans—and decide,
unanimously, that either Defendant was part of a specific conspiracy.
Relatedly, the Court asked during the April 3, 2025 hearing whether the Court could
address the duplicity problem through an interrogatory asking the jury if they unanimously agree
about the Defendant’s guilt for each conspiracy. Tr. (Doc. #122) at 40:3–41:5. Such an end-of-
trial interrogatory would still allow the Government to present evidence and argument, throughout
trial, based on a one-conspiracy theory. Such an approach would therefore still invite the jury to
transfer guilt across the line between conspiracies. That approach would also mean that the jury
would not realize that it needed to differentiate between conspiracies until the very end, meaning
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that it might fail to track which evidence relates to which conspiracy during trial. Only Count
One’s dismissal will avoid the duplicity problem.
III.
Count One’s Duplicity Appears on the Face of the Indictment

The Court previously denied Defendants’ motion to dismiss the original indictment “at this
stage” because the issue turns on facts to be developed at trial. Order (Doc. #137). But the
Government’s Superseding Indictment even more clearly merges multiple distinct conspiracies
than the original indictment did. The Superseding Indictment clearly identifies a course of conduct
that stands out from the rest of the allegations: whereas most of Count One focuses on discrete,
allegedly fraudulent loans tied directly to Defendants, a portion alleges a broad program to
“collect[] and review[] applications from potential borrowers” on behalf of lenders, and to
establish a VIPPP network for “referral agents to coach borrowers.” Superseding Indictment (Doc.
#163) ¶¶ 16(d)–(e). The Superseding Indictment’s only attempt to tie this broader course of
conduct to the rest of the allegations about discrete loans is to name both Defendants in both sets
of allegations. But a defendant’s involvement in multiple courses of conduct does not make a
single conspiracy. See Kotteakos, 328 U.S. at 754–55, 768–69 (rejecting the argument that there
was one conspiracy just because “each defendant was linked” to one central figure).
Moreover, the Superseding Indictment now reduces the allegations during Round 1 to only
two borrowers and two loans aside from the Defendants’ own loans, while still claiming that the
conduct alleged during Round 2 of the PPP, which involved hundreds of loans for borrowers the
Defendants never interacted with, is part of the same conspiracy. And, despite making those
changes and having the opportunity to correct its earlier errors, the Government taken the simple
step of at least two distinct conspiracies interrupted by the five-month termination and later
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reauthorization of the PPP, thus doubling-down on its impermissible conflation of distinct courses
of conduct into a single alleged conspiracy.
CONCLUSION

The Defendants deserve to be convicted or acquitted at trial based upon their own conduct.
But by amalgamating multiple separate conspiracies, with different alleged participants, different
alleged objects, and different alleged means, allegedly occurring at different times under different
program rules and regulations, the Government risks obtaining an ambiguous verdict that will not
provide sufficient assurance that the jurors were unanimous in their judgment. It has further risked
the Defendants’ being convicted not based upon the evidence against them with respect to each
separate conspiracy (which, with respect to Round 1, is all but absent for Ms. Hockridge, and
which, with respect to the Round 2, is all but absent for Mr. Reis), but based merely on their
association as husband and wife, which carries with it the unavoidable implication of unified
purpose and privately shared confidences. Such insinuations are unworthy of a federal criminal
case.

Instead, the Court should require Count One to be dismissed in order to ensure that the
Defendants are not wrongly convicted of conspiratorial conduct that, even by the Government’s
own lights, they had little or no involvement in. Doing so will ensure that the jury is properly
instructed to consider the Defendants as the separate individuals they are.
Dated: May 29, 2025
Respectfully submitted,

LATHAM & WATKINS LLP

/s/ Kevin A. Chambers
Kevin Andrew Chambers (Pro Hac Vice)
DC Bar No. 495126
555 11th Street NW, Suite 1000
Washington, DC 20004
Tel: (202) 637-2200
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Fax: (202) 637-2201
kevin.chambers@lw.com

Matthew S. Salerno (Pro Hac Vice)
1271 Avenue of the Americas
New York, NY 10020
Tel: (212) 906-1200
Fax: (212) 751-4864
matthew.salerno@lw.com

Attorneys for Defendant Nathan Reis

Michael P. Heiskell, TX Bar: 09383700
JOHNSON, VAUGH & HEISKELL
5601 Bridge Street, Suite 220
Fort Worth, Texas 76112
Tel: (817) 457-2999
Fax: (817) 496-1102
mheiskell@johnson-vaughn-heiskell.com

Attorneys for Defendant Nathan Reis

BRYAN CAVE LEIGHTON PAISNER LLP

/s/ Richard E. Finneran
RICHARD E. FINNERAN
211 North Broadway, Suite 3600
St. Louis, Missouri 63102
Tel: (314) 259-2000
Fax: (314) 259-2020
richard.finneran@bryancave.com

Attorneys for Defendant Stephanie Hockridge

GALLIAN FIRM

/s/ Gregg Gallian
Gregg Gallian, TX Bar: 24085952
3500 Maple Avenue, Suite 1150
Dallas, Texas 75219
Tel: (214) 432-8860
Fax: (972) 433-5835
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gregg@gallianfirm.com

Attorneys for Defendant Stephanie Hockridge

CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served on all
counsel of record by operation of the Court’s CM/ECF system.

/s/ Richard E. Finneran

RICHARD E. FINNERAN

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Renewed Motion to Dismiss Superseding Indictment — U.S. v. Reis & Hockridge (N.D. Tex.)

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