Forensic investigators target bounce back loan fraudsters

Released On 7th Dec 2022

A business owner who dissolved his company the day after a Bounce Back Loan (BBL) worth £25,000 was paid into the company bank account has been sentenced to 15 months imprisonment, suspended for 18 months.

Ben Hamilton was convicted under the Companies Act following abuse of the BBL financial support scheme in 2020.

The company Director applied for a BBL on behalf of his telecommunications design and installation business in May 2020.

The loan was paid into the account the same month and the following day Hamilton filed paperwork with Companies House to have the business dissolved.

According to the prosecution, Hamilton “thought he could abuse the Covid-19 financial support schemes and get away with it” but was caught out by investigators, who identified him as a likely BBL fraudster.

He may well have escaped a prison sentence if he had co-operated with the criminal investigation team, but he did not even attend an interview with them when given that opportunity.

He should also have paid attention to the terms of the striking-off application when filling out the form to dissolve the company.

Interested parties and creditors, such as a bank with an outstanding loan, should have been notified within seven days of making the application.

The form also made it explicit that failure to notify interested parties is a criminal offence, however, Hamilton did not follow these rules.

In the end, it was only when the Insolvency Service obtained a Proceeds of Crime Act (POCA) restraining order on his bank accounts that he engaged with the investigation.

Roger Isaacs, Forensic Partner at Milsted Langdon, said: “As this, and the many other cases we have recently reported highlight, the Government’s forensic counter-fraud investigators are working hard to recoup the money obtained through abuse of Covid support schemes.

“The BBL seems to be an area of particular focus and although it can sometimes be difficult to uncover financial abuse, the facts of this case suggest that the fraud was breathtakingly blatant.

“Indeed, some might say that to apply for one’s company to be struck off within 24 hours of receiving a Bounce Back Loan shows a staggering level of chutzpah, matched only by the apocryphal story of the boy who killed his mother and father and then begged the court for mercy on the grounds that he was an orphan.

“Interestingly this appears to have been another of many recent cases in which the draconian powers under the Proceeds of Crime Act were used before, rather than after, a criminal conviction had been obtained. Only once the defendant’s bank accounts had been frozen, did the prosecution take place.”

Source(s): Gov.UK