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.

With 6 further cases of BBLS-related fraud reported in the last 3 months, and a positive conclusion to a previously reported case.

Bounce Back recap

In January of 2023, we reported on the director of Digital Business Box Ltd, who fraudulently secured a £50,000 Covid Bounce Back Loan by exaggerating his company’s turnover. After spending the loan on personal expenses and a BMW, then attempting to dissolve his business, he received a suspended prison sentence and a director ban in December 2022.

After his conviction, the Insolvency Service initiated crime proceedings, compelling Mr Saeed to sell his BMW and his flat in east London to repay the £50,000 loan. The sale of Mr Saeed’s property was completed in late October 2024, along with an additional payment, ensuring the full repayment of the loan.

Bankruptcies and bans

Shaun David Dixon, a self-employed electrician from Middlesbrough, faces 7 years of stringent bankruptcy restrictions following his abuse of the Covid Bounce Back Loan scheme.

He improperly claimed 2 separate loans totalling £23,750 by overstating his business turnover, receiving an unentitled excess of £16,250.

Made bankrupt in November 2023, Mr Dixon did not dispute the inaccurate information provided during his second loan application, leading to bankruptcy restrictions that prevent him from acting as a company director and borrowing over £500 without declaring his bankruptcy status. These restrictions are set to last until October 2031 to prevent further misuse and protect public funds.

Ruxanda Guja, a former decorator in Romford, has been banned from acting as a company director until December 2037 and must pay over £100,000 in compensation after unlawfully securing 3 Covid Bounce Back Loans totalling £145,000 for her company, Roxy Contracts Limited.

Despite the rules stating businesses were entitled to a single loan of up to £50,000 depending on their turnover, Ms Guja applied for 3 separate loans in 2020, obtaining 1 of £45,000 and 2 others of £50,000 each from different banks by misrepresenting her company’s turnover.

She has been ordered to pay £107,038 in compensation and £7,592 in costs. The Insolvency Service conducted the investigation, emphasising that Ms Guja’s actions breached clear scheme guidelines, constituting misuse of taxpayer money. Liquidators were appointed for Roxy Contracts in June 2021.

Nazia Khan, a Dubai-based sales consultant, received a 9-year company director ban in the UK for fraudulently securing a £25,000 Bounce Back Loan for her dormant company, LC247 Limited, by falsely claiming a turnover of £100,000.

The Insolvency Service’s investigation found that the company, which was supposed to offer consultancy services for a variety of luxury items and consumer goods, had minimal trading activity and was not entitled to the funds. Ms Khan misused the loan for personal expenses, including rent and shopping, rather than business development. The company was liquidated in February 2022, with over £28,000 in debts.

Her disqualification began on 5^th December 2024, preventing her from any management role in a UK company without court permission.

Kieron Minto-St.Aimie, a former professional footballer, has been disqualified from serving as a company director for 8 years for making a false declaration to secure a £25,000 Covid Bounce Back Loan for his business, when it was eligible for much less.

His sports academy in Brent was entitled to only £10,000 based on its actual turnover, but he overstated the figure by £60,000. The academy, which provided football coaching and mentoring, opened in 2016 and was dissolved in January 2023.

Suspended sentences

Muhammadh Chaudhry, a Surrey director who used to be known as Masood Jamati, has been handed a suspended sentence and a 7.5-year director disqualification after fraudulently securing £100,000 in Covid Bounce Back Loans.

He applied for these loans for 2 businesses that seemingly never traded, using “cynically invented” turnover figures of £200,000 for each to obtain the maximum loan amount. After receiving the loans, Mr Chaudhry transferred the funds through family members’ bank accounts and then back to himself, using some for personal expenses like holidays to Pakistan.

While Mr Chaudhry has repaid 1 loan in full and has started to pay back the second loan – agreeing to repay the remaining balance – his actions were deemed a deliberate exploitation of a scheme intended to support legitimate businesses during the pandemic.

Irena Tokarczyk, a director from Watford, was sentenced to a suspended 2-year prison term for fraudulently acquiring a £50,000 Bounce Back Loan and subsequently dissolving her company, Good Food Shops Ltd, without repaying the loan. The company was dissolved in October 2020, triggering an Insolvency Service investigation, which found that the company had never traded.

In addition to the suspended sentence, Ms Tokarczyk must perform 100 hours of unpaid work, undergo 10 days of rehabilitation activity, and is disqualified from directing a company for 3 years.

She breached the Companies Act 2006 by not informing creditors about the dissolution and committed fraud. The Insolvency Service plans to recover the funds through a Proceeds of Crime Confiscation Order, which will be evaluated in court this month.

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 mike.wright@esarisk.com, on +44 (0)343 515 8686 or via our contact form.

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