News |Investigations

23rd June 2022

Two related companies wound-up after defrauding local authorities

The companies received £85,000 from Covid support loans they weren’t entitled to.

Discreet investigations by the Insolvency Service led to two connected companies being wound-up in court on 26th April 2022 for abusing loan and grant schemes during the Covid-19 pandemic.

Momz Love Limited and Unique Homes Lettings, both with registered office addresses in South East London, defrauded multiple local authorities to take advantage of government relief packages.

The retailer, Momz Love, sold the unusual mix of “children’s clothes online and 3D printers and computing equipment from a physical shop.” The company obtained “at least £85,000” in government grants through five successful applications – with one or more further applications rejected – between June and August 2020.

Unique Homes Lettings “fraudulently claimed to be the landlord of entities”, including Momz Love, supporting the retailer’s claim that it occupied various premises used in the company’s false loan applications.

Edna Okhiria, Chief Investigator for the Insolvency Service, noted that “investigators could not find any evidence of legitimate trading by either” company.

Additionally, Unique Homes Lettings stole £8,000 or more by using “stolen cards to make payments to at least four local authorities towards business rates before asking for a refund to be paid into a different bank account.” The ‘payments’ failed, of course, leaving the local authorities paying out a “bogus refund” each time.

This was systemic fraud by both companies that continued until the Insolvency Services received complaints about the businesses.

Lynda Copson, Chief Investigator for the Insolvency Service, described the companies as being “maliciously used as vehicles to defraud local authorities across the country.”

Okhiria outlined how Momz Love used “bogus tenancy agreements to suggest the companies operated in the local area [of each local authority], as well as sham utility bills, bank statements and insurance documents.”

Both companies are now in liquidation, with the Official Receiver hoping to achieve a return for creditors.

This is the latest in a line of Covid support-related announcements made this month by the Insolvency Service, following bans for a director who abused the Eat Out to Help Out and furlough schemes, and for two directors who falsely applied for Bounce Back Loans, as well as a bankrupt being given additional restrictions for a bogus Bounce Back Loan application.

Fraud investigations by ESA Risk

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Contact Mike Wright, Risk Management & Investigations Consultant, at mike.wright@esarisk.com, on +44 (0)843 515 8686 or via our contact form, to find out more.

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