Several charges have been filed with the Bounce Back Loan Scheme, a government assistance programme established during the epidemic. A former councilor, for instance, filed for a £10,000 award even though he was not entitled to it.
Repudiate loan fraud
Covid-19 impacted UK companies were invited to apply for a government-backed loan under the Bounce Back Loan Scheme. This scheme was initially criticised for its lack of due diligence measures. Analysts claim that the BBLS is vulnerable to exploitation and may cost the UK public billions of pounds.
According to the Department of Business, Energy, and Industrial Strategy last year, 37% of the loans would not be repaid. Of these, 11% were based on fraudulent applications. Although the National Audit Office has not confirmed this, accounting firm PricewaterhouseCoopers estimates the fraud percentage is closer to 7.5 percent.
Recovering from loan fraud prosecutions
Because the government recognizes that anti-fraud measures were implemented too late, it concentrates on detection and not prevention of fraud. As a result, a handful of prosecutions have already taken place, with many more on the way, and several government entities are cooperating to capture COVID-19 scammers.
A good example is Harman Bangar, who served as a councilor in the city of Wolverhampton. Bangar was responsible for the council’s implementation of the BBLS system. The prosecution alleges that he and his wife used this information when they applied for a grant of £10,000 for there to be a statement that the jointly owned company had been operating since October 2019. An investigation revealed that the statement was incorrect. They have both been found guilty but have yet to be punished since Mr. Bangar is appealing his conviction.
Both Artem Terzyan and Deivis Grochiatskij have been sentenced to 17 and 16 years in jail, respectively, for their roles in the bounce-back loan scam. While on bail for various crimes, the couple set up hundreds of dummy businesses and used a network of criminals under their control in order to collect £10 million in cash from them.
In a third instance, the High Court ordered the closure of a company after one of its directors asked for a £50,000 bounce-back loan even though the firm had ceased operations several years earlier. It has been discovered that the bank account of Regal Luxury Lodges Ltd has been hacked. A third-party bank account uses to take potential clients’ payments.