INABILITY TO EXPLAIN TRANSACTIONS
Released On 6th Oct 2022
In one of the latest cases of Bounce Back Loan Scheme (BBLS) fraud, a construction company boss has been disqualified as a director for seven years after failing to keep adequate accounts while his business was trading.
Marian Clipici was the sole director of Dahlial Limited, which operated a construction business from November 2017.
However, it operated from the same address as a Romanian restaurant in Southampton and, until July 2021 Mr Clipici was also a director of Dani-Deea Ltd, which operates a Romanian food shop in Southampton.
Dahlial Limited ceased trading in September 2021 and went into liquidation. However, the liquidator identified several concerns, which triggered an investigation by the Insolvency Service.
According to the Insolvency Service, the business accounts showed transactions of more than £1 million, “none of which could be demonstrated to have been for legitimate company payments, due to a lack of accounting records and documentation”.
The investigation also found that Mr Clipici was unable to account for more than £530,000 paid into the business bank account between June 2019 and the point of liquidation, including a £40,000 Bounce Back Loan paid to the company in May 2020.
Then, over the next four months, Mr Clipici withdrew £30,000, which he claimed was for payments to subcontractors and business expenses, but he was unable to provide corroborating evidence.
He was also unable to prove that the Bounce Back loan was validly obtained or used to support his business during the pandemic.
Roger Isaacs, Forensic Partner at Milsted Langdon, said: “Businesses were only eligible for support through the BBLS if the money was to be used to benefit the business.
“However, some business owners appear to have claimed this support fraudulently and they are now being pursued by the Insolvency Service using its new powers.
“In fact, in this case, the Deputy Head of Insolvent Investigation said that Mr Clipici’s disqualification ‘should serve as a warning to other directors that if you do not take your responsibilities as a director seriously, you run the risk of being disqualified’.”
Roger said that there will be cases where investigators pursue business owners who consider that they have a valid defence to the accusations that they face.
“Often forensic accountants can then play an important role in analysing the financial evidence and presenting it to the court in a persuasive manner,” he added.
