Insolvency Service tackle Bounce Back Loan abusers

The Insolvency Service tackle more business owners abusing the Bounce Back Loan scheme

Five individuals who applied for and received vital Covid-19 support have been caught by the Insolvency Service for acquiring loans to which they were not entitled.

The Insolvency Service are cracking down on Bounce Back Loan abusers, with the five business owners been separately subject to bankruptcy restrictions totalling 48 years.

In each of the five cases, the Bounce Back Loan had been wrongfully obtained, either through;

1. overstating their turnover
2. on behalf of a company which had ceased trading prior to the pandemic
3. or were misused for personal use instead of for the benefit of their business

 

The Five Cases

• Charlene Wilson, a self-employed beauty therapist obtained a £50,000 Bounce Back Loan by inflating her turnover and spent approximately £15,000 of the loan on personal expenses. She faces bankruptcy restrictions for 8 years.

 

• Georgiana Cercel owned a beauty business and acquired a Bounce Back Loan of £50,000 by inflating her turnover. She gave £10,000 of the loan to her sister and faces bankruptcy restrictions for 10 years.

 

• Florin Bodale, a building contractor, received a Bounce Back Loan of £50,000 by inflating his turnover. He claimed to think the application asked for total turnover for the previous 3 years - this amount would still have been less than the turnover stated. He faces bankruptcy restrictions for 10 years.

 

• Sarah Sweeting, a farm shop home delivery service, acquired a £22,000 Bounce Back Loan, despite beginning to trade in October 2020 (businesses had to have been trading prior to March 2020 to be eligible for a Bounce Back Loan). Her husband was transferred £14,000 of the loan and she is subject to a 10 year bankruptcy restriction.

 

• Abbas Moradmand, a tyre business owner between 2018 to 2019, obtained a Bounce Back Loan of £26,894. He was not entitled to this loan as he acquired it based on his former tyre business. He faces bankruptcy restrictions for 10 years.

 

The restrictions that each individual will face due to their Bounce Back Loan abuse include the inability to borrow over £500 without disclosing their bankruptcy status. They're also unable to be a company Director without permission from the court.

 

 

Article by The Insolvency Service