Crackdown on Bounce Back Loans abuse

The crackdown on company directors who abused the Bounce Back Loan financial support scheme, brought in during the pandemic, continues.

Two of the latest to be convicted of offences under the Companies Act include Sameer Saeed and Antonia Parkes.

Both were the subject of Insolvency Service investigations and had dissolved their companies shortly after receiving Government help, which was intended for genuine businesses and provided loans of up to £50,000.

Following the investigation into Digital Business Box Ltd and The Home Wills Ltd, Mr Saeed was convicted on four counts under the Companies Act and Fraud Act.

In relation to Digital Business Box Ltd, he was found to have secured a £50,000 Bounce Back Loan based on inflated turnover but applied to dissolve the company just two weeks later.

It was also found that Home Wills Ltd was not eligible for funding, as the company was established outside the applicable dates. However, his attempt to secure a loan of £50,000 was deemed an aggravating aspect when he went to court.

Having pleaded guilty to the offences, Mr Saeed was sentenced to 20 months imprisonment, suspended for 18 months, and 300 hours of unpaid work. He also undertook to repay the £50,000 Bounce Back Loan to the bank.

Ms Parkes also secured a Bounce Back Loan, only to dissolve her business, Conwy Valley Lodge Ltd, immediately after securing £20,000 under the scheme.

A spokesman for the Insolvency Service said that in each of the cases, the company directors thought they could abuse the rules and get away with it. However, as he pointed out, the Insolvency Service will not hesitate to prosecute in such cases.

Commenting on the cases, Roger Isaacs, Forensic Partner at Milsted Langdon said: “The level of abuse and fraud associated with the various Covid support schemes is staggering and investigations are likely to continue for many years as HMRC attempts to recover what it can from those who misused this important financial assistance.

“Forensic accounting can play a crucial role in uncovering abuse in complex cases but these two miscreants appear to have acted so blatantly that I doubt expert evidence was required.”

Posted in The Forensic Blog.