Two directors from Huddersfield have been handed a 21 years ban after they were found to have fraudulently claimed £100,000 in bounce back loans (BBLs).
In January 2021, the directors’ first company went into voluntary liquidation, which prompted the insolvency service to investigate. They found the duo had been inflating the company’s turnover in order to meet the criteria for a BBL of £50,000. At the time of the liquidation the directors had listed the liability to the bank at just £7,000.
One of the directors was also the sole director of a second company. He fraudulently overstated the company’s income by around £160,000 in order to apply for a BBL of £50,000 when the company would only have been entitled to a loan of £9,927. It was discovered that both directors had been making monthly payments to family members, later declaring to the Insolvency Service that these were genuine business expenses.
Since the investigation, the directors have repaid a total of £60,000 to settle claims with the liquidator. The chief investigator for Insolvency Service, Mike Smith, explained that ‘Government loan schemes have provided a lifeline to millions of businesses across the UK’ and that ‘the insolvency service will not hesitate to investigate and use its powers against those who appear to have abused Covid-19 support schemes.’