A ‘sickening’ fraudster who scammed Rochdale council and two other local authorities out of nearly £200,000 through a Covid-19 support scheme has avoided prison.
Rais Kayani, of Farley Hill in Luton, pretended to be the well-known bakery Greggs as he made claims for small business grants via the relief scheme designed to help struggling businesses during the pandemic. The Government had made emergency funds available to companies in need of urgent help via the Small Business Grant Fund, which was administered by local authorities.
The 31-year-old pleaded guilty previously to a single count of entering into a money laundering arrangement at Southwark Crown Court. On Monday (July 3) he was sentenced to 16 months imprisonment, suspended for 18 months.
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A National Investigation Service (NATIS) investigation revealed that between May 4 and May 9, 2020, multiple false applications were made for the Small Business Grant Fund at St Helen’s, Thurrock and Rochdale local authorities. The three councils were defrauded of £35,000, £85,000 and £75,000 respectively – leading to a total loss of £195,000.
The frauds were perpetrated by unknown individuals impersonating genuine ratepayers. For example, in the fraud against St Helens Local Authority, fraudsters sent correspondence to the council impersonating Greggs, the well-known high-street baker.
Genuine business rate account numbers were used to support false applications for rate grants which were awarded by the local authority. Investigators were unable to identify who submitted the fraudulent applications but the requested payments were all transferred for the benefit of the bank account of RAK Traders and Services Ltd - a company based in Luton.
Kayani is the sole director of the company. Bank statements from that account show that £195,000 had been received from the three local authorities and on May 13, 2020, £100,000 was transferred out to a US dollar account.
On May 13, 2020, $47,500 was sent from the dollar account to an account in Hong Kong.
Councillor Neil Emmott, the leader of Rochdale Borough Council, said: “It is staggering and sickening to think that at the height of the Covid pandemic, when thousands of lives were being lost, people were thinking of ways to line their pockets with taxpayers’ money. It is only due to the actions of our staff and our bank that we managed to recover every penny from these unscrupulous fraudsters.
“I hope that all of this gang are eventually brought to justice and that all of the money stolen can be recovered somehow.”
Ben Reid, of the CPS Specialist Prosecutor for the CPS' Serious Economic, and Organised International Crime Directorate, said: “At a time of national emergency during the Covid-19 crisis, vast Government funds were released to support struggling businesses across the country. Kayani was the cynical beneficiary of a series of false applications to local authorities in different parts of the country from where his business operated.
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“Having dishonestly benefitted from the fraudulent applications for the Small Business Grant Fund, he transferred the proceeds overseas. We have already recovered £155,000 of taxpayer’s money and will now seek a confiscation order for the remaining funds”.
Michael Dineen, Deputy Director Head of Crime Operations at the NATIS, said: “We are very pleased Mr Kayani has accepted responsibility for his actions and entered guilty pleas to the charges against him. The teams of the National Investigation Service, as always, have worked with Police to ensure those that have defrauded the Small Business Grant Scheme, as well as other schemes, are brought to justice and the money they took is restored to the public purse as quickly as possible.”
The CPS have reiterated that they are committed to bringing fraudsters, including those who have exploited the Covid-19 pandemic for their own gain, to justice. Kayani was ordered by the court to undertake 100 hours of unpaid work and pay a Compensation Order of £6,000.
A St Helens Borough Council spokesperson said: "St Helens Borough Council takes all threats of fraud seriously. We have a dedicated counter fraud team who identified and rejected multiple small business grant applications purporting to be from national companies in 2020. With the help of NATIS, the individual behind this fraudulent activity was identified and brought to justice."
Thurrock Council has been approached for comment.
