Our coverage continues on the Insolvency Service’s initiative to uncover financial wrongdoing connected to the Covid-19 Bounce Back Loan Scheme (BBLS), amid sustained efforts to identify businesses and individuals who exploited the scheme intended solely for vulnerable businesses during the pandemic.

There were 7 updates from the Insolvency Service on BBLS-related fraud in the last 3 months.

Sanctioned

Zhongqing Li, the former owner of the Silver Sea Chinese takeaway in Gillingham, Kent, has been sanctioned with a nine-year disqualification from acting as a company director after wrongfully claiming a £50,000 Bounce Back Loan during the Covid pandemic.

Despite the business not meeting the eligibility criteria for the scheme, Li applied for the loan in June 2020. The Official Receiver discovered, following Li’s bankruptcy in June 2024 still owing the loan amount, that Silver Sea had not been trading by the required date of 1^st March 2020 to qualify for the loan.

Li accepted a Bankruptcy Restrictions Undertaking (BRU) without disputing the claim that he obtained the loan improperly, leading to restrictions on his financial and business activities, including acting as a company director or borrowing over £500 without disclosing his sanctions, effective until 27^th January 2034.

The Silver Sea takeaway is currently trading under new ownership while the Official Receiver investigates the possible recovery of the funds.

Huseyin Houssein, a 55-year-old former London minicab driver from Edmonton, North London, has been subjected to an 11-year sanction due to the abuse of the Covid Bounce Back Loan scheme.

In his application in August 2020, Houssein falsely claimed his business had a turnover of £200,000 the previous year to obtain the maximum loan of £50,000. However, it was discovered during his bankruptcy in February 2024 that the actual turnover was only £11,446, meaning he was entitled to just £2,861. Houssein spent the entire £50,000 between October 2020 and May 2021 on non-business related expenses.

As a result of giving false information and misusing the funds, Houssein has agreed to a BRU.

Suspended

Jordan Allen, a plasterer from Lancashire, fraudulently obtained a £50,000 Covid Bounce Back Loan in 2020 by exaggerating his business’s turnover by more than £200,000. His actual business turnover was only around £20,000 annually, making him eligible for just £5,000. Despite this, he claimed a turnover of £225,000. Allen spent the loan on personal expenses, including supermarket shopping, gambling, and fantasy football.

After declaring bankruptcy in 2021, he faced legal consequences and was sentenced at Preston Crown Court to a 16-month suspended prison term, 200 hours of unpaid work, and 10 days of rehabilitation activity, along with a mandate to pay £3,600 in compensation. Additionally, Allen agreed to a 10-year BRU.

Sentenced

Arti Deda, a Berkshire construction company director, was sentenced to 2-and-a-half years in prison and disqualified from acting as a company director for 10 years after fraudulently obtaining 2 maximum-value Bounce Back Loans, each worth £50,000, for his company Knight Workers Limited during the COVID pandemic.

The company, entitled to only one loan, falsely claimed annual turnovers of £390,000 and £495,000 to receive the loans which were never used for the benefit of the business as required. Instead, significant amounts were transferred to associates and third parties.

Following an investigation by the Insolvency Service, Deda was convicted of fraud and other criminal offences and ultimately failed to repay the loans. Knight Workers was liquidated in November 2021, with efforts now to recover the funds under the Proceeds of Crime Act.

Devon taxi driver, Murat Dogantekin, was sentenced to 2 years and seven months in prison for fraudulently securing 2 Bounce Back Loans totalling £100,000 during the Covid pandemic. By falsely claiming his turnover was over £350,000 more than his actual earnings, Dogantekin, aged 50, received far more financial support than he was entitled to, over £95,875 more. He transferred the fraudulent funds to a close family member and an offshore account, showing no intention of using the money for legitimate business purposes or making any repayments.

Residing in Exeter, and declared bankrupt in November 2021, Dogantekin ignored multiple attempts from Insolvency Service investigators to clarify his financial activities. His flagrant abuse of pandemic support measures has led to efforts to recover the funds under the Proceeds of Crime Act.

Nelson Clark, a 34-year-old taxi driver from Dartford, Kent, has been sentenced to 2-and-a-half years in jail for fraudulently obtaining £130,000 through three Covid Bounce Back Loans.

Clark significantly inflated his business turnover in the loan applications during 2020, misleading the banks on 2 separate occasions for his businesses, N Clark Taxis, Nelson Clark Management, and Rosewood Motors. Despite claiming an annual turnover of £120,000 for N Clark Taxis and £200,000 each for the other 2 businesses, investigations by the Insolvency Service revealed these figures were grossly exaggerated.

Clark misused the funds for personal benefit, including transferring £80,000 to a third party. Following his bankruptcy declaration in August 2021, he accepted a 10-year Bankruptcy Restrictions Undertaking in March 2022, limiting his financial activities. Again, The Insolvency Service is actively seeking to recover the fraudulently obtained funds under the Proceeds of Crime Act 2002.

Ilhan Kekec, a restaurant owner, has been ordered by the court to repay the full amount of a fraudulently secured £30,000 Covid Bounce Back Loan plus interest, totalling £37,426, or face an additional 18 months in prison.

Kekec, aged 36, had previously received a 2-and-a-half-year jail sentence in March 2024 for overstating his company’s turnover to obtain the loan and attempting to dissolve his business without notifying creditors. He was also ordered to pay £15,900 in costs. Kekec had admitted to using the loan to pay off personal debts instead of for the economic benefit of his business as claimed in his loan application. He further breached his duty by not informing creditors of his intention to dissolve Hizirali Ltd, the company set up to run Derwish Kebab Restaurant. Additionally, Kekec was banned from acting as a company director for three years.

Insolvency and debt investigations

Seeing the whole picture in insolvency and debt cases is key to maximising returns to creditors. For more information on how ESA Risk can help to identify hidden assets or locate targets who have gone to ground, contact Mike Wright, Investigations and Risk Management Consultant, at advice@esarisk.com, on +44 (0)343 515 8686 or via our contact form.

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