Three years ago today the Government launched the now notorious loan scheme to help businesses survive the pandemic lockdown.
Bounce Back Loans allowed firms to borrow up to 25% of their turnover, to a maximum of £50,000.
“From 9am this morning, small business owners can apply to accredited lenders by filling out a simple online form, with only seven questions,” the Government announced on May 4, 2020.
The loans were doled out by banks and 100% underwritten by the Government, giving the lenders little incentive to check whether companies were entitled to the money.
And so the floodgates to a wave of swindlers.
Government figures show that £46.6billion was handed out, with £5.5bn now listed as in arrears, defaulted or lost to suspected fraud.
In the last financial year, the Insolvency Service banned 459 people from being company directors for fleecing the scheme.
Just six have been prosecuted for fraud.
An analysis of banned directors by the Mirror shows that around 30% are foreign nationals.
Presumably many aren’t bothered if they get banned from being a director in the UK because they can swan back to their home country with the money they hustled and set up companies there.
Among the most shocking cases I’ve discovered is Stonehill MoT Centre Limited in Huntingdon, Cambridgeshire, a company with an horrific past.
According to the Insolvency Service, it got the maximum Bounce Back Loan of £50,000 by falsely claiming to have a turnover of £212,000, roughly double the true figure.
The company went into liquidation owing the entire loan – and another even bigger unpaid debt.
That arose after it was prosecuted by the Health and Safety Executive in 2001 for the death of a 56-year-old man who was killed when an oil drum he was cutting open with a plasma torch exploded.
Luton magistrates were told that there were no warning labels on empty oil drums that had been repurposed to store gasoline.
Not a penny of the £80,000 fine has been paid.
The company was run by Tomas Petraska, a 44-year-old from Lithuania, whose penalty for fiddling the Bounce Back Loan scheme is a ban from being a director for 10 years.
John O’Connell, chief executive of the TaxPayers’ Alliance, described the scale of cheating as shocking.
“While ministers had to act quickly during the Covid crisis, taxpayers have been left on the hook for Whitehall’s failure to implement safeguards,” he said.
“The government needs to crack down on anybody who fiddled the system.”
In one of the most extreme cases of Bounce Back Loan abuse I’ve seen, companies run by Tufaeyl Chowdury got a total of £335,000, none of which has been repaid.
The money came from the maximum of £50,000 loans to six companies and £35,000 to a seventh. The companies claimed turnovers of at least £260,000, yet none were VAT registered even though the threshold is £85,000.
One of them was Fusion Knowledge Limited, whose registered office was in Swansea.
The liquidator’s report states: “The company either fraudulently obtained a loan or alternatively failed to register for VAT.”
Chowdury, 40, has now been banned from running UK companies for 10 years. I'm not sure how much this will bother someone living in Bangladesh, according to Companies House records.
Jonas Varslauskis, above, was the sole director of Peterborough freight company Juone Trans Limited.
The 50-year-old Lithuanian lied about the company's turnover to claim the maximum £50,000 Bounce Back Loan when it was entitled to no more than £8,800.
An Insolvency Service report states: "At least £18,000 was used for his or his family’s personal benefit".
The full £50,000 was still outstanding when the company went into liquidation last April.
Varslauskis has been banned from being a director for ten years.
Bounce Back Loans were supposed to be used entirely for the economic benefit of the company that received the money, but that didn’t bother Zeeshan Afzal.
His Middlesbrough company Guard K9 Security Limited got £49,995, of which £7,332 went on online shopping and £13,866 disappeared in international money transfers.
Other spending discovered by the Insolvency Service included £10,500 in university fees and £5,268 to a debt collection agency. The loan has not been repaid.
Afzal, 33, from Pakistan, got a seven-year ban.
Businesses were entitled to a single Bounce Back Loan but London scaffolding company Magic Delta Limited got two, totalling £100,000.
The Insolvency Service states that it fraudulently obtained the second loan seven months after getting the first.
None of the money has been repaid.
Romanian boss Parascovia Coada has been given a 12-year director ban.
Truck driver Krzysztof Szoentag, above, was entitled to a Bounce Back Loan of roughly £10,000 for his company Kris Transport Services Limited.
By exaggerating its turnover on the application form the company received £25,000.
It has since been liquidated with £24,214 remaining unpaid.
Szoentag, a 40-year-old Polish national who lived in Rugby, has been given an eight year directorship ban.
Amit Dass from Germany showed how easy it was to exploit the loan scheme by buying a company called Filterology Limited for £400, becoming its sole director.
The company had never traded but Dass claimed that its turnover was £160,000 to get a £40,000 loan.
That’s not a bad return on £400 – unless you’re the taxpayer, because none of the money has been repaid.
Dass, 37, has been banned from being a UK director for 13 years.
The Insolvency Service dug into the liquidation of a company called Mr Cleano Leicester Limited after none of its £50,000 Bounce Back Loan was repaid and found that at least £24,300 had been transferred abroad.
The director, 36-year-old Rebaz Ahmad from Iraq, has been banned from running companies for six years.
Building firm 3V Construction claimed it had a turnover of £600,000 to make it eligible for the maximum Bounce Back Loan amount of £50,000.
In truth, the company was dormant and didn’t even have a bank account until applying for the loan.
An Insolvency Service report shows that the director, 38-year-old Alexandr Jereb from Romania, used almost £37,000 of the money to buy cryptocurrency and paid himself another £5,000 in cash.
He got a £47,000 loan for a second company, Alma Construction Limited, by also claiming that it had a turnover of £600,000 when the figure in the latest annual accounts was just £28.
The Insolvency Service states that much of the money received was used for personal spending, including £8,750 on rent for his home.
Jereb has been banned from being a director for 12 years.
Building company Elite Contractors London Limited was run by 43-year-old Slawomir Bartkiewicz from Poland.
Despite companies only being entitled to one Bounce Back Loan, he applied for two.
The first was for £8,000 and on the same day that it was received, Bartkiewicz transferred £7,000 to himself and a relative, according to an Insolvency Service report.
The company then got £26,161 from a second bank, and again Bartkiewicz didn't waste any time helping himself to the cash, transferring £12,500 to himself and a relative on the same day it landed in the company bank account.
It has since been liquidated and besides the outstanding loans there’s around £200,000 owed to HM Revenue and Customs.
Bartkiewicz has been banned from being a director for 11 years.
I could go on, there are plenty more bent bosses from overseas who came here, fiddled the system at taxpayers' expense, and are free to leave without any penalty other than a directorship ban, but I think you get the idea.
investigate@mirror.co.uk
