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Insolvency Service disqualifies over 450 Covid fraudsters


More than 450 directors were disqualified in the past 12 months for abusing the Covid support schemes like the Bounce Back Loans. But critics have questioned whether this action is too little, too late.  


20th Apr 2023
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According to figures published by the Insolvency Service, Covid fraud accounted for 459 of the 932 director disqualifications in 2022/23. 

The average length of director disqualifications has increased to seven years and four months, up from five years the year before, which the Insolvency Service put down to the higher number of disqualifications linked to Covid-19 support fraud. 

Around £10bn has been lost to fraudsters taking advantage of the Covid support schemes.

Dave Magrath, director of investigation and enforcement at the Insolvency Service, said: “These fraudsters are just the latest to find out that we will not hesitate to take firm action where we uncover such abuse, and this can ultimately result in a jail sentence.”

He said the purpose of the Bounce Back Loan scheme was to support businesses during the pandemic, but “it is clear a minority of company directors chose to maliciously abuse the scheme and defraud the taxpayer. Our team of experts continues to work round the clock to bring these criminals to justice.”

Bounce Back Loan fraud

Criminal activity circled around the lax Bounce Back Loan scheme, where speed to deliver the support to businesses took precedence over adequate fraud-prevention measures. This allowed thousands of companies that were not even trading to receive the loans while others overstated their turnover to fraudulently claim the support. 

Recent examples of directors struck off as directors include Bahar Dag, who claimed the full £50,000 Bounce Back Loan by claiming the company’s turnover was £200,000 when it was actually closer to £40,000. When the Insolvency Service got involved they repaid the amount in full. In addition to the disqualification, they were sentenced to two years and six months in prison. 

In another case, Jubelur Rohman was disqualified for 11 years after an investigation into their £50,000 Bounce Back Loan obtained in October 2020 discovered that the company ceased trading in October 2019. The sole director had given the business address of a restaurant owned by a different company. Under the rules of the Bounce Back Loan scheme, a company had to be trading on 1 March in order to claim any funding.  


Aside from the 459 Covid fraud-related disqualifications, the insolvency service said the second-most-common reason for being struck off was the 185 allegations relating to “Unfair Treatment of the Crown”.

The number of director disqualifications has bounced back from the low numbers seen during the pandemic which the Insolvency Service said coincided with the low numbers of insolvencies. 

Last year the Insolvency Service was given powers to investigate directors without a formal insolvency process.

The number of disqualifications are inching closer to pre-pandemic figures of between 1,200 and 1,300 during 2013/14 and 2019/20. 

Too little, too late?

However, critics have commented that the Insolvency Service’s clampdown on pandemic fraudsters is like “shutting the door after the horse has bolted”. 

“This might take some of the bad guys out of operation for a few years, but it won’t stop them from returning and it certainly won’t get the billions back that were lost as a result of the government’s failure to put in proper controls at the outset,” said Andrew Durant, senior managing director in the forensic and litigation consulting practice of FTI Consulting.

A high-profile critic of the Covid support rollout is Lord Agnew, who famously resigned at the despatch box last year due to the woeful “schoolboy errors” from the Treasury in the rollout, which led to fraudsters exploiting the scheme. 

In December 2021, the National Audit Office also put the blame on the government’s slow action to prevent fraud, concluding that “the impact of prioritising speed is apparent in the high levels of estimated fraud”.

Durrant echoed this: “We predicted in the early months of the introduction of the various Covid-relief schemes that this could be a fraudster’s dream come true. We set out various actions that the government could take but no one paid any attention – they had to be seen to be doing something and controls would only slow down the process, so they were ignored.”

Replies (10)

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By Paul Crowley
20th Apr 2023 23:16

Something like this really needs context
How many BBLs became irrecoverable in that time?

Thanks (2)
By JustAnotherUser
21st Apr 2023 08:16

this is all over the place.... just like the BBL scheme...

We start with the claim of abuse, but then rightly identify this is fraud.

"10 billion has been lost", if the maximum was 50k this is 200,000 business' committing fraud? So not a "minority of company directors chose to maliciously abuse the scheme"?

Speed to deliver vs fraud prevention.... I have seen many example which could have been added to the schemes criteria which would have easily avoided this fraud, it is simply negligent and I hope to see the people responsible wrapped up in public enquiries for years to come.

Thanks (2)
By Justin Bryant
21st Apr 2023 09:05

What a joke. These fraudsters must all be laughing their socks off, as these are just wrist-slaps basically for people who should be spending a long time in jail and facing confiscation orders etc. But of course we all know that will never happen (and so do they of course).

"...where speed to deliver the support to businesses took precedence over adequate fraud-prevention measures"

As for the above statement, that's pure BS. As Lord Agnew (and JAU above) said, it would have taken just one sensible, competent person to suggest basic anti-fraud measures that could have been applied more or less immediately to prevent most if not all these frauds - the scale of which in the absence of such measures was predictable by anyone with any common sense.

This was nothing short of pure and total incompetence by the person in charge of this country's money at the time i.e. RS. Just think of what good public services this money could have funded (doctors and NHS generally anyone?) and/or there would probably be no need for the 25% CT rate hike etc. had RS not been such a total idiot to allow this.

Thanks (5)
Replying to Justin Bryant:
By JimLittle
21st Apr 2023 10:53

Totally Agree. Only in the UK this can happen where BBL fraudsters can get
£50,000 with a click of a button and no one is at bothered. What's the difference lying on my mortgage application and lying on a bank loan. I would be jailed for lying on my mortgage application ?

We have end up paying for this in Corporation Tax increases due to these fraudster most of them just ended with disqualification which will have absolutely no affect on them and probably telling their mates they get 50k for free or in some cases much more than 50K as they had multiple companies or a sole trader bank account. I think most people would take 50K and disqualification if you offered it to them.

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By TheChief
21st Apr 2023 09:55

No-one ever mentions the Banks mishandling of the BB loans. Try to get a normal loan or mortgage and the answer is NO not until you have jumped through hoops!. Where was the AML checks? the due diligence? Yes the Government should have strengthened the criteria, but the Banks need to be held responsible too.

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Replying to TheChief:
the sea otter
By memyself-eye
24th Apr 2023 11:47

The banks did NOT mishandle BBL's - they were not to blame for the Government saying to them:
"get the money out there, no need for the usual checks and balances, we will indemnify you"
On that basis the banks handled the distribution quite well..

Thanks (1)
By tracey2412
21st Apr 2023 10:25

This talks about directors but - & I may have missed it in a quick read - what about sole traders who also may have abused the system in a similar way?
They obviously can't be disqualified but there is surely some means of investigation & consequence?

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Replying to tracey2412:
By JimLittle
21st Apr 2023 11:02

Yes good point - I know so many people in the construction industry had a old sole trader bank account and limited company bank account and claimed for both.

No one is bothered and banks have been closing bank accounts where there is BBL so will get lost in the system. The only people that get caught seems to be at the liquidation stage so if they leave the company dormant I don't think anyone would find out about the BBL. Possibly someone could could claimed 50K BBL when the company was dormant and leave it dormant so when they die the debt gets written off.

There are just too many cases to go after and probably should concentrate on those will multiple loans and prosecute them but even these ones they end up with just a disqualification when it is blatant fraud.

Thanks (2)
Replying to tracey2412:
paddle steamer
25th Apr 2023 18:26

Are they not personally liable with no corporate veil?

Thanks (0)
By daymar
21st Apr 2023 11:07

Disqualifiaction is no punishment whatsoever. These people can still work through companies as shareholders and get their spouse or friend to be the actual director. They should be jailed for fraud - no if or buts.

Thanks (3)