First Covid-claim abusers taken to court

Two companies that fraudulently applied for large grants and loans due to the Covid-19 pandemic have been taken to court. This is likely the tip of a very large iceberg, and we expect to see more cases emerge in the very near future.

Recent government press releases show that two companies used false documentation to secure £230,000 from “at least” 41 local authorities and the government’s Bounce Back Loan Scheme. This money was made available to allow small businesses to access finance more quickly or (in the case of grants) more generously. HMRC had previously notified the public that it will investigate claims it believes were fraudulent, but the two cases described today are the first examples of companies actually being taken to court.

According to the Insolvency Service, neither of the companies in question ever traded. Investigators found that one of the companies registered offices in Whitchurch, Shropshire, and provided falsified lease documents and utility bills to 14 different local authorities in an effort to convince them that they had traded out of premises that came under their jurisdiction.

The companies were successful in securing grants from local authorities and Bounce Back Loans based on claims to trade from premises that were unoccupied, up for rent, or occupied by other companies.

Paul Scully, the Small Business Minister, said:

“This decisive enforcement action shows that we will not tolerate shameless attempts to defraud the taxpayer and falsely claim public money intended to help businesses through the pandemic.

“We are cracking down on Covid fraud across the board and those who have tried to take support they were not entitled to, which was given in response to the worst crisis of our lifetimes, can expect to face heavy consequences.

“The lengths that fraudsters went to as they tried to falsely claim grants surprised even our most experienced staff, but by using national counter fraud networks, concerns could be raised quickly and trends and patterns were shared with other authorities.

“We are very proud of the way our teams supported so many businesses in extraordinary circumstances, and we are also pleased that they foiled attempts by a small minority to exploit the misery that Covid-19 has brought to so many.”

If you are concerned that about a claim your business made during the coronavirus pandemic, contact JW Hinks on 0121 456 0190. Our friendly team of professional experts can help you to correct any mistakes as quickly as possible, and support you during ongoing investigations.