Bulletguy Posted May 3, 2022 Share Posted May 3, 2022 From The Times so i've posted in full due to paywall......the figures are eye watering and the fraud, criminal. Suitcases of Covid loan cash seized at UK’s borders - Recipients of pandemic support also spent the money on gambling sprees, home improvements and cars, a Times investigation finds Suitcases filled with cash from taxpayer-backed Covid loans were seized at the border as people tried to smuggle them out of the country, a Times investigation reveals today. Border force officials have stopped people at airports across Britain “carrying large amounts of money suspected from coronavirus bounce-back loans”, a Home Office source said. Other recipients of financial support during the pandemic used the money to fund gambling sprees, home improvements, cars and watches, it has emerged. They are among dozens of company directors who have been disqualified after misusing the loans scheme that was set up to support businesses during the pandemic. In many cases the individuals took out the loans before immediately transferring the funds into personal bank accounts and spending the money on themselves instead of their companies. It is estimated that as much as £17 billion of the £47 billion the government spent on bounce-back loans for businesses will never be paid back and about £4.9 billion of that is suspected to have been lost to fraud. A fraud expert said he feared the findings were just the “tip of the iceberg”, with most of those responsible unlikely to face any major sanction because of the “sheer volume” of abuse. David Clarke, the former head of fraud for City of London police and former chairman of the Fraud Advisory Panel, said the revelations were “startling”, adding that they “proved there were in effect no protections on the money being sent out”. The investigation found: • A gambler used a £50,000 bounce-back loan to fund poker games after claiming his company turned over £200,000, even though he only had £2.72 in his account. • One businessman breached scheme rules by securing more than ten pandemic loans for companies in the same corporate group. • A sandwich shop owner received a £35,000 loan for his business before using it to fund the refurbishment of his garden, gambling losses and a new business that went bust within six months. • A pub landlord paid himself £30,000 after claiming one of the business loans in “consultancy fees”. • A soft drink company owner inflated his firm’s turnover by 100 times on his application to get a maximum £50,000 loan. • A restaurant owner was able to get a loan after having already been evicted from his premises for not paying rent. Home Office sources said passengers had been stopped at UK airports trying to smuggle large amounts of cash that they had taken from bounce-back loans. The money was confiscated under the Proceeds of Crime Act and inquiries are under way. Lord Agnew, the counter-fraud minister who quit over alleged failures in the scheme, has previously raised concerns with MPs about bounce-back cash being smuggled out of the country. He wrote letters of thanks to border force staff who managed to stop money leaving the country. In recent months records from the government’s Insolvency Service, which can ban directors that break company rules or bankrupts judged to be responsible for their debts from running companies, have revealed the scale of abuse of the scheme. The bounce-back loan scheme was the largest of the Covid-19 related business loan schemes, targeting the smallest firms and offering them loans of up to £50,000, or 25 per cent of annual turnover. In numerous cases directors took out the loans before almost immediately transferring the full sum to their personal bank accounts. Under the rules, the loans could only be used to support their businesses. Disqualifications prevent people from managing companies for up to 15 years. A disqualification is a civil order used where a director is suspected of fraudulent conduct of a business, misuse of company funds, or failing to pay taxes, to protect the public. The cases identified by The Times are among the first to emerge from the Insolvency Service and many more are expected. A Labour parliamentary question revealed that, as of February, the government had opposed the winding up of at least 63,968 companies that still owed money under a pandemic scheme. By preventing their closure in this way the government can try to reclaim some of the money through insolvency procedures or take civil or criminal action against directors. The bounce-back scheme was launched on May 4, 2020, during the first wave of the pandemic to support thousands of small businesses at risk of collapse. It initially required directors to answer just seven questions online. Under the scheme companies could apply for loans of up to £50,000 depending on their turnover, which they self-declared. The debt is paid back over six years at a fixed rate of 2.5 per cent. The government covered the interest for the first year, and borrowers could ask for a further six-month grace period. The taxpayer guarantees the credit by allowing banks to claim money back from the taxpayer in many circumstances of repayment failure. Under the scheme’s guidance, companies had to declare to banks what their “self-certified annual turnover” was, filling out a form and declaring this information to be correct to determine what size of loan they were eligible for. In most cases there appear to have been no attempts by banks to verify these claims, even where anti-fraud “red flags” were accessible to them. The Times has identified 124 cases between October 2021 and March 2022 where a director has been disqualified, or made subject to bankruptcy undertakings as a result of bounce-back misuse. In at least seven of these cases, disqualified directors or bankrupts used the loans to go on gambling sprees. In a further 18 cases, directors took the money out in cash from bounce-back loans and other forms of Covid support for unclear purposes, and were unable to demonstrate they used the money to benefit their businesses. Other examples identified include directors using them to buy cars or to refurbish their houses. More than one in three of the 230 disqualification cases listed on the Insolvency Service website in late March involved some form of bounce-back misuse. An insolvency practitioner said that in many recent cases of fraud not primarily related to pandemic schemes, directors had committed bounce-back abuse as well. Clarke said he feared the cases that have emerged so far preceded “an avalanche of bounce-back cases working their way through the system”. The Times has identified 124 cases between October 2021 and March 2022 where a director has been disqualified, or made subject to bankruptcy undertakings as a result of bounce-back misuse. In at least seven of these cases, disqualified directors or bankrupts used the loans to go on gambling sprees. In a further 18 cases, directors took the money out in cash from bounce-back loans and other forms of Covid support for unclear purposes, and were unable to demonstrate they used the money to benefit their businesses. Other examples identified include directors using them to buy cars or to refurbish their houses. More than one in three of the 230 disqualification cases listed on the Insolvency Service website in late March involved some form of bounce-back misuse. An insolvency practitioner said that in many recent cases of fraud not primarily related to pandemic schemes, directors had committed bounce-back abuse as well. Clarke said he feared the cases that have emerged so far preceded “an avalanche of bounce-back cases working their way through the system”. “These failures of due diligence are startling, proving that there were in effect no protections on the money being sent out,” he said. “It would have taken as little 15 minutes for an entry-level researcher to do the kind of basic due diligence that would have prevented these kinds of cases from happening, which might have cost as little as £20 per loan.” Rachel Reeves, the shadow chancellor, said: “These stories are the shocking consequence of Rishi Sunak repeatedly ignoring warnings about a lack of anti-fraud measures in his support schemes. It is particularly painful when the government is piling new taxes on working people and businesses.” A Treasury spokesman said: “Our Covid support schemes were implemented at unprecedented speed and successfully protected millions of jobs and businesses at the height of the pandemic. “Last year we stopped nearly £2.2 billion in potential fraud from the bounce-back loan scheme, and £743 million of over claimed furlough grants. Our new Taxpayer Protection Taskforce, made up of nearly 1,300 staff, is expected to recover an additional £1 billion of taxpayers’ money.” The spokesman said there were active criminal investigations and the National Investigation Service has made 49 arrests over such cases. The British Business Bank is a state-owned development bank set up to increase lending to small and medium enterprises. It was tasked with managing the bounce-back scheme, among other pandemic support programmes by the Treasury. A spokesman said its work ensured “access to finance was available at pace and at scale during the pandemic” and that it “ensured that key counter-fraud measures consistent with the self-certification design of the scheme were in place from the outset”. He said: “from the launch of the scheme, the British Business Bank has worked with lenders and across government to prevent, detect and counter fraud and put in place as quickly as possible additional measures to further mitigate fraud risks, including using data from Companies House.” Individuals who exploited the system - Harrow builder went on gambling spree with pandemic loan All it took was a brief visit to the Barclays website for Adrian Cusiac before £50,000 hit his account in June 2020. The Romanian builder obtained the maximum bounce-back loan by claiming that his construction firm Rocasca UK Ltd had turned over at least £200,000 in the previous year. “Prior to receipt of the loan the account balance stood at £2.72 in credit,” Cusiac’s director disqualification statement reads, continuing that “the company had been materially inactive after April 2019”. Barclays staff appeared not to have checked publicly available records on Companies House, which would have told them the company had assets of just £1,500, which should have raised serious doubts about his claims. The statement continued: “In response to ‘what did you use the BBL for?’ Mr Cusiac replied, ‘I’ve spent the money on poker games and I’m not proud of myself’.” When his company was finally put into liquidation there was just £12.30 left in the account. “£32,933 was transferred from the company to Romania,” the statement said. He was disqualified as a director for nine years. Cusiac was approached for comment. Barclays said it was unable to comment on individual cases but that the bank was not required to conduct normal checks or verify self-certified information. They said it was compliant with all rules of the scheme. It said: “To ensure speed of response and issuing of funds, the government scheme was designed such that lenders were not asked to verify any self-attested details of borrowers.” Covid loan to takeaway firm taken out in cash The fact that a Rotherham takeaway firm had never filed accounts, and had been set up less than a year before, did not prevent Barclays from providing it with the maximum £50,000 bounce-back loan in June 2020. Mr Md Rezaul Haque was disqualified because, according to the Insolvency Service, “it has not been possible to confirm if funds of £50,000 received from a Bounce Back Loan on 1 June 2020 were used for the economic benefit of the company, given that there are unknown cash withdrawals of £20,000 on 22 June 2020 and £30,000 on 25 June 2020”. He was disqualified as a director for six years. A takeaway restaurant, Presto Pizza, occupied the same address as the company and is listed on food website Just Eat, having been rated by the Food Standards Agency in November. The council had to shut this restaurant down in October last year after finding a dead rat. Haque was approached for comment. Cafe manager uses Covid funds for garden refurbishment Steven Davison, 32, was able to obtain a £35,000 bounce-back loan for Broadway Sandwich Bar and Catering, his business in Blyth, Northumberland, in April 2020. His bankruptcy statement said that “he failed to spend the sums for the economic benefit of the business. He states he spent the monies on gambling losses, garden improvement and a new business which ceased trading within six months.” This business appears to be a pub company called “Blyth Seahorse”, company records show. He posted a picture of himself enjoying a cider on Twitter in his newly refurbished garden in May 2020, telling a friend that he had “eventually got it done while I was off work. One of them jobs that I never had the time for. I intend on living in it when the suns out”. Davison was issued with a seven-year bankruptcy restriction undertaking. He was approached for comment. Pub landlord paid himself pandemic funds as ‘consulting fees’ Lloyds Bank granted the pub firm £50,000 in loans despite its latest accounts showing it had no assets, and which had last filed dormant accounts which can normally only be done if a firm has ceased trading. Ciaran Twomey, who previously managed the picturesque Woodman Inn near Hatfield, Hertfordshire, was able to get the loans despite the fact the company had not been operating. “On 29 May 2020, Mr Twomey transferred the lump sum of £10,000 to himself personally with the payment reference ‘consultancy fee’,” his disqualification statement reads. He made three further payments labelled “consultancy fees”, bringing the total to £29,000, in the months after receiving the loan, discovered when the company entered liquidation. The firm got the loan despite evidence of the company’s failure to pay business rates at another premise, with Charnwood Council having written off £20,000 owed by the firm due to the cost of collecting. Twomey was approached for comment. A spokesperson for Lloyds Banking Group said: “All the steps required of lenders by the British Business Bank as part of the Bounce Back Loan application process were followed in this case. “All customers were reminded during the application process of the need to provide accurate information. We fully support the relevant authorities in pursuing those responsible using all avenues to recover the funds.” Businessman claimed loan for restaurant evicted from premises before pandemic A business having practically ceased to exist before the pandemic appears to have been no bar on a successful bounce-back application. According to the disqualification statement of Robert Lee, owner of Bolton restaurant company Blackrod Dining: “On 24 February 2020, he was evicted from the restaurant’s trading premises for rent arrears including a recharge of utilities, insurance, and business rates of £18,598 and Blackrod ceased trade.” Despite this, Lee was not prevented from taking out a maximum bounce-back loan from Barclays. “On 12 May 2020, Blackrod applied for a BBL, at a time when they had no trading premises to operate from and liabilities of £96,000.” Some of this money was then passed on to another company of which he was sole director, with £34,000 used to pay off debts, Insolvency Service records show. He was disqualified for seven years. Lee was approached for comment. Soft drink company owner inflated turnover by 100 times to get loan Inderjit Singh Dadial, owner of Cali Juices, a Wolverhampton soft drinks business, is among directors disqualified for overstating his company’s turnover to get a loan from HSBC. “On 16 May 2020 Mr Dadial applied for a BBL and stated that Cali’s turnover was £250,000. Cali’s accounts for the year ended 30 January 2020 showed turnover of £2,350 and that it made a loss of £33,818,” his disqualification statement reads. The company was not in fact eligible for any money under the scheme, the Insolvency Service found. He denied any misrepresentation, saying he gave no figure for turnover but did provide a figure for estimated future earnings, and said he was in the process of challenging the disqualification. A spokesperson for the bank said: “We followed the rules of the scheme as set out by the British Business Bank, balancing our responsibility to the UK tax payer with getting these much needed funds to businesses as quickly as possible.” Southsea wholesaler used a shell company to get loan Yorkshire Bank granted a bounce back loan to 23-year old wholesaler Muneef Ihsan through a firm he had bought off the shelf weeks earlier. “Porthart was purchased from a formation agent in June 2020. There is no evidence that Porthart was carrying on business on 1 March 2020 or was engaged in trading or commercial activity as at the date of the BBL application, which is contrary to the terms of the BBL scheme”, his disqualification statement reads. A new bank account had to be set up for the money to be received. £20,000 was then paid to a company that filed dormant accounts, which under company rules must not trade, a further £7,000 was taken out of in cash, and £200 sent to Ihsan’s personal account. Ihsan was also disqualified for fraudulently taking out two further bounce-back loans through other similarly named firms Bargain Basement 90 Limited and Bargains Basement Limited, which he could provide no evidence were actually trading, his statement shows. Ihsan was approached for comment. A spokesman for Virgin Money, which owns Yorkshire Bank, said: “The checks we completed on applications for the Bounce Back Loan Scheme complied with all scheme rules and guidance at the time. “The scheme was designed by the government to rely on self-certification by applicants to ensure funding was available quickly to support businesses that needed it during the pandemic.” Cars, watches and home improvements Other cases include a man from Washington in the North East, who borrowed £28,000 at a time when he had stopped working as a fruit and vegetable trader. He then paid himself £10,000, as well as buying a £2,400 watch before filing for bankruptcy. In another case, a man from Hampshire took out a £50,000 loan for his telecommunications firm, before transferring the money to a new company he set up that would have been ineligible to make a bounce back loan itself. He then used the money sent to the company to buy a car. Another director took out two different bounce back loans to which he was not entitled, and used the money on “gambling, home improvements and living expenses” before filing for bankruptcy. Transparency fears Ministers are spending tens of thousands of pounds of taxpayer money fighting to prevent the public from knowing where coronavirus loans worth billions have ended up. The British Business Bank, which handled the government’s Covid bounce-back schemes, has been refusing for more than a year to publish its records of who got the money, and is fighting transparency campaigners in the courts. Similar payments are a matter of public record in countries such as the United States, and experts say releasing the information could help tackle fraud. The government, however, says it could lead to “vigilante activity” against suspected fraudsters. The Fraud Advisory Panel, an independent charity that brings together the anti-fraud community, wrote to Rishi Sunak, the chancellor, in June 2020 explaining that a “lack of transparency” around who benefited from the schemes provided “an opportunity to defraud the UK”. The letter, whose signatories included David Clarke, then chair of the organisation and the head of fraud at City of London Police, and Rosalind Wright, former director of the Serious Fraud Office, said transparency was required due to the “serious weaknesses that enable fraudsters and corrupt insiders to exploit the bounce-back and [Coronavirus Business Interruption Loan (CBIL)] scheme.” They told Sunak that “publication of the information will help to deter and detect crime by enabling the public and companies to check the credit-worthiness of customers and suppliers.” “Law enforcement and credit reference agencies will also be able to conduct research and data matching to identify crime using established techniques,” the letter said. Transparency campaigners have now had to take the bank to the information tribunal to try to force it to release the information. George Havenhand, of Spotlight on Corruption, said: “The Covid loan schemes are expected to cost the public purse billions of pounds, with a corresponding windfall for fraudsters and banks, and yet vague ‘commercial interests’ have been invoked to draw a veil of secrecy over the names of loan recipients. “Publishing those names would improve the government’s derisory attempts to recover the money lost to fraud and shed much-needed light on the role of commercial lenders.” Figures released to OpenDemocracy under the freedom of information act show that the cost to departments of fighting tribunal cases against transparency can be as much as £130,000. Most cost tens of thousands in legal fees. Only a fraction of the tens of billions of pounds of public money spent supporting companies through the pandemic is subject to full disclosure. This includes much of the money lent in £80bn worth of pandemic loans, and £70bn in furlough payments. No details have been provided on the identity of the 1.6 million businesses that borrowed a combined £47.4 billion via the bounce-back loan scheme, unless they have emerged in court or insolvency cases. The details of fewer than 50,000 of almost 110,000 CIBLs have been published. These disclosures were issued under the terms of the Brexit transition deal and appear on the European Commission’s website, but have not been published on the UK government website. Furlough claims have also been published by HM Revenue & Customs for the period December 2020 and September 2021. However, the scheme was most actively used in the first few months of the pandemic, leaving many claimants shrouded in secrecy. The government also rejected a Times request for information on where nearly £1 billion in Sunak’s pet scheme, Eat Out to Help Out, went, despite releasing similar information in the case of furlough payments. The government has also resisted calls to issue the identity of businesses that borrowed a combined £1.14 billion via Sunak’s Future Fund scheme for technology start-ups. Of the 1,190 borrowers, only 265 have been identified — those businesses whose taxpayer loans have converted into equity. The Treasury further refused to disclose the minutes of the meetings between Treasury ministers and business leaders about the scheme in response to a Times request. Lord Agnew of Oulton, the former minister who resigned at the dispatch box in protest against poor oversight of the bounce-back scheme, said he suspected there was a reticence to publish more data about borrowers due to government embarrassment. He told MPs in March: “Governments hate [transparency] because it shines a light into areas which they don’t want people to see.” The British Business Bank said it had decided after consultation with the Department for Business, Energy and Industrial Strategy and the Treasury that publication was “not appropriate for the remaining borrowers” under the CBIL and bounce-back loan schemes “for a number of reasons”. It said: “The Information Commissioner’s Office has upheld the bank’s position with regard to publication of borrower-specific data. As the schemes and data mature, the bank is actively considering publishing more data on a regular basis and will provide an update on this in the coming months.” The bank said that increased transparency could lead to greater fraud, but it declined requests by The Times to provide evidence of this. https://www.thetimes.co.uk/article/suitcases-of-covid-loan-cash-seized-at-uks-borders-wcnnjd7r8 Link to comment Share on other sites More sharing options...
John52 Posted May 4, 2022 Share Posted May 4, 2022 All this was predicted before they did it. By Sunak guaranteeing the loans 100% the lenders have a disincentive to pursue fraud - pursuing fraud costs them time and money when it costs them nothing to get the money from us. Antony was on here bragging about using covid loan money to buy e-bikes - and still it went on. What can we do now - if you put this temptation effectively waving money under the noses of ordinary folk many will take it. Now the money is gone and we don't have enough prisons to lock them all up. Yet there are still people who claim with a straight face that Sunak & Johnson did a good job of handling the pandemic Link to comment Share on other sites More sharing options...
Bulletguy Posted May 4, 2022 Author Share Posted May 4, 2022 John52 - 2022-05-04 7:32 AM All this was predicted before they did it. By Sunak guaranteeing the loans 100% the lenders have a disincentive to pursue fraud - pursuing fraud costs them time and money when it costs them nothing to get the money from us. Antony was on here bragging about using covid loan money to buy e-bikes - and still it went on. What can we do now - if you put this temptation effectively waving money under the noses of ordinary folk many will take it. Now the money is gone and we don't have enough prisons to lock them all up. Yet there are still people who claim with a straight face that Sunak & Johnson did a good job of handling the pandemic The electorate voting for fraud and criminality has to be the most insane and bizarre. :-S Link to comment Share on other sites More sharing options...
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