Having a laugh at our expense
Cheating bosses who pocketed £1m Covid aid
NO one should be surprised that the economy is in a mess considering that the country was shut down to cope with coronavirus.
We’re all now paying the price for staying at home during lockdown, but the situation has been made much worse thanks to the mismanagement of schemes to help businesses survive the pandemic.
A major culprit is the Bounce Back Loan scheme which offered business loans of up to £50,000, or 25% of turnover.
The banks that lent the money had little incentive to carry out due diligence because the loans were 100% underwritten by the Government.
Unscrupulous firms were easily able to falsify turnover figures on their loan applications to get more cash than they were entitled to.
Then it was a simple matter of moving the money out of the company and shutting it down without repaying a penny.
Now the taxpayer is footing the bill for handing out cash to the likes of the 20 directors featured here who blagged their way to the maximum £50,000 loan.
That’s £1million wasted just by this dishonest bunch.
Unless I’ve missed something, the only penalty any of them have suffered is receiving a ban from acting as a company director.
Danylo Tkachuk of Manchester building company Vin-D-Line Ltd is typical of how many of the cheats operated. His company declared an annual turnover of £270,000 on its Bounce Back Loan application, getting £50,000 as a result.
In fact Vin-D-Line had a turnover of less than £3,000 and none of that was genuine business activity, according to an Insolvency Service report.
Tkachuk has been banned from being a director for 10 years.
Next up there’s Anthony Williams from Bath property firm Regency Offices Ltd.
Within days of getting a £50,000 loan the entire amount was paid out as “dividends” to Williams and three cronies, the Insolvency Service discovered.
I’m not even including in the £1million lost to the taxpayer the £149,000 that Williams, 66, also got from a Coronavirus Business Interruption Loan, or the £44,000 that was owed in VAT when Regency Offices went into liquidation.
His penalty? A seven-year ban from being a company director.
Petko Apostolov ran cleaning company BDA 1 Ltd. Its tiny turnover meant that it was only entitled to a loan of roughly £6,000 but it got the full £50,000, all of which was outstanding when the company was wound-up.
Alexander Cooper ran Glasgow building company Traprain Homes Ltd. Far from being a going concern when it applied for the loan, Traprain Homes was insolvent. Cooper, 70, transferred £49,477 of the £50,000 loan to the company to himself.
Another building firm up to the same trick was Matcas Ltd, run by 30-year-old Vasile Matcas of Haverhill, Suffolk. It inflated its turnover figure by a factor of six to claim the maximum loan.
Matcas, Apostolov and Cooper all got 10-year directorship bans.
Other building firm bosses on the fiddle include Shaun Foster of Lit Engineering Contractors Ltd of Middlesbrough, Lavinia-Larisa Mociar of L&M Construct Ltd of Harrow, north London, and Anthony Killarney of K11 Developments Ltd based in Brentwood, Essex. They got 11-year bans. Dishonourable mentions also go to Manchester plumber Adam Davis of Mode Plumbing Heating and Electrical Ltd, and sparky Ryan Burns of District Electrical Ltd of Cockermouth, Cumbria. They got nine-year bans for bagging £50,000 loans that they weren’t entitled to.
Restaurant and takeaway owners who got 11-year bans for fiddling the system include Gul Begum of Ashiana Monk Bretton Ltd near Barnsley, South Yorks, and Savio Pereira of Himalayan Zest Takeaway Ltd in Corby, Northants.
Zeeshan Marth of Shaanz Peri Peri
Bridgwater Ltd in Somerset and Muhammad Rais of Lokma BBQ Ltd in Leicester, each got nine-year bans.
Mahmood Anjum of Peterborough design outfit DMS Global Ltd put his company’s turnover at more than £200,000 to get the maximum loan even though the latest sales ledger recorded an annual figure of barely £10,000. His ban was 10 years.
Victoria Kwame was a director of east London jobs firm 5 Star Recruitment Ltd, and stated that it had a turnover of £225,000.
The actual annual figure was £2,026, says the Insolvency Service, whose report details how 39-year-old Kwame siphoned £34,500 to associated companies and individuals. She got an 11-year ban.
Glasgow firm CKO Civil Engineering and Surveying got a £50,000 loan by overstating its turnover and director John McGarvey then went to a different bank to get a second loan for the full amount, earning him an 11-year ban.
Bringing the tally featured here up to a round £1million is Andrew Bryce, whose waste disposal companies AWG Commercial Ltd and AWG Green Waste Ltd each got £50,000.
The Insolvency Service states that £77,700 of the money was moved out of the company bank accounts and transferred to the personal account of 48-year-old Bryce, who lives in Bordon, Hampshire.
He’s got one of the shorter bans of seven years.
There are plenty more like this lot – Government figures published in September show that 242 director bans have been imposed on Bounce Back Loan cheats. There has been just one prosecution.
The campaign group TaxWatch isn’t impressed.
Its director Alex Dunnagan said: “The idea that a directorship ban is punishment enough is a farce which does nothing to deter further fraudulent activity.
“With a quarter of British businesses applying for these loans, it was obvious that some form of compliance work would have to be undertaken.
“When the scale of the issue became apparent, the Government should have begun adequately equipping bodies like the Insolvency Service and the National Investigation Service to deal with the epidemic of fraud.
“The Chancellor missed an opportunity in last week’s Autumn Statement to properly invest in those tackling fraud.”
The latest annual report from the Department for Business estimates that the loss to fraud and error in the Bounce Back Loan scheme will reach £1.1billion.
“The Department is working on identifying instances of loans being obtained fraudulently, penalising those responsible and recovering funds where possible,” it says.
“We have expanded our internal counter-fraud capabilities to help us do more on this front.”
‘‘ The idea that a director ban is punishment enough is a farce