The owner and sole director of a pizza takeaway in Manchester has been sentenced to two years in prison for fraudulently obtaining a Bounce Back Loan during the Covid-19 pandemic.
Abdulrazag Zagroba applied for a £20,000 loan under the Covid support scheme in June 2020, two weeks after applying to dissolve his company Amigo Pizza (Manchester) Ltd.
In applying for the Bounce Back Loan, Zagroba “signed the loan declaration stating the company would be able to make repayments” and he failed to tell the lender that he had started the dissolution process.
Zagroba, 54, told investigators from the Insolvency Service that he had “no intention of using the Bounce Back Loan for the business.”
Amigo Pizza (Manchester) Ltd ran a pizza takeaway in Stretford, Manchester from January 2020 until October 2020, when the business was dissolved. The loan taken out by Zagroba became due for repayments in June 2021, when the company was no longer active.
Rather than use the funding for his takeaway business, Zagroba sent £14,000 in cash to family living abroad, with friends apparently transporting the money. He also bought and insured a car.
“Covid loans were designed to support viable businesses during the pandemic. Abdulrazag Zagroba, however, cynically sought to exploit the covid loan scheme and by dissolving his company, he intended to frustrate any attempt by the lender from taking action to recover the outstanding loan.”
Julie Barnes, Chief Investigator at the Insolvency Service
Zagroba’s sentencing on 24th June 2022 at Manchester Crown Court signalled the first successful criminal prosecution for a Bounce Back Loan fraud.
He pleaded guilty to the charges of fraud by false representation under Section 2 of the Fraud Act 2006 – which carries the 24-month prison sentence – and an aggravated striking off offence under the Companies Act 2006 (20 months’ imprisonment, to run concurrently).
As well as a two-year imprisonment, the Manchester resident has received a ban from holding company directorships for seven years.
The Insolvency Service’s Julie Barnes went on to caution that “this sentence should serve as a warning to others who engaged in this behaviour, and they should come clean and repay the money before it is too late.”
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