Authorities claw back fraudulent claims for CBILs, Bounce Back Loans, Furlough Payments and Covid-19 Support for Rural Businesses that see a string of convictions – but millions are still missing

Anecdotally those in the business community regular hear of fraudsters who saw the Government’s financial help to business as free money.

ICSM sources have heard of company directors taking the money on offer by giving misleading information about the viability of their business. One source said they had known of company directors who had claimed their firm was viable on the application when in reality they were hugely in debt and had no chance of ever breaking even with the help of a loan.

Stories like this are two a penny and it would seem are born out by a string of court cases brought by the Insolvency Service as they seek to claw back some of the lost cash.

Previously the Insolvency Service brought Raashid Khan in Birmingham to book who took a £50,000 Bounce Back Loan before transferring the full amount out of the company’s account to himself just days before his company went into administration. A year ago the Insolvency Service petitioned the Courts to wind up five limited companies with one taking a £240,000 CBILs on the basis of false information.

ICSM’s source said many of the company directors who completed the loan application assumed there would be no consequences. He said: “Some saw it as a way to wind up a business by taking the cash and promptly folding the firm having secured themselves a dividend. It doesn’t work like that – fraud in a criminal offence.”

The Inland Revenue has also been hunting down fraudulent claims for the furlough scheme announcing last year they had been doing spot checks on businesses. The taxman was also open to ‘whistle blowers’ contacting them – over 4,000 reports sent to them during the first period of the furlough scheme.

ICSM’s Ian Carrotte said the classic examples were where a firm had expected their workers to continue working for them while also claiming furlough payments. He said: “We’ve heard through the grapevine of managers have asked furloughed employees to do ‘a little bit of work on the side’ which was illegal and there have been cases where someone has left a firm but the company continued to claim their furlough cash.”

HMRC and the Treasury said they designed the schemes to protect public money against error, fraud and abuse and sifted out 100,000 applications for rejection. However fraud and mistakes with the schemes which are backed by the tax payer and not the banks who facilitated the loans are expected to see somewhere north of £7bn in lost cash.

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ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel – while at the moment there’s a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach – ask for details from Paul.

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