Bounce Back Loan fraud
As most people within the insolvency industry will be aware, it has become apparent that the Covid-19 financial support schemes provided by the Government to help businesses struggling with the impact of the pandemic, such as the Bounce Back Loan (BBL) scheme and the Coronavirus Business Interruption Loan scheme, were subject to large-scale fraud and default. The Insolvency Service has made it clear that directors found guilty of abusing those schemes will be held accountable.
One director has been jailed for two years, after fraudulently obtaining a £20,000 bounce back loan for a company already in the process of being dissolved. Another director received a disqualification ban of 10 years for transferring nearly £50,000 funded by way of a bounce back loan to a supplier based in Slovakia which the company had never done business with previously and who provided no goods or services in return.
PwC, the accountancy firm hired by the Government, has estimated fraud losses of £3.5bn in relation to the BBL scheme, which saw £47bn distributed to 1.6m recipients.