Insolvency Practitioners Duties Regarding Bounce Back Loan Abuse!
- Thread starter UK Contractor Accountant
- Start date
Hi @UK Contractor Accountant
Yes, that is the case. It was reported back in in early 2022 that the BBB was already pushing back. Here is a link to the story in the FT. Hopefully their paywall won’t stop you reading it.
More than £240m stripped from UK Covid loan guarantees
https://on.ft.com/3Q3hT1L
Thanks.
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Another bad boy:
www.printweek.com
Director barred for BBL claim - Printweek
The boss of a micro print business has received a lengthy ban for falsely claiming the business was entitled to the maximum Bounce Back Loan amount.
www.printweek.com
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Some odd reporting going on:Another bad boy:
Director barred for BBL claim - Printweek
The boss of a micro print business has received a lengthy ban for falsely claiming the business was entitled to the maximum Bounce Back Loan amount.
"Onenetprint went into liquidation on 22 February 2022. The £50,000 BBL made up most of its estimated total deficiency of £67,499."
They "only" weren't entitled to £27k of the BBL, so the actual BBL over claim was much a fair bit less than half of the deficiency.
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- Original Poster
- #250
Has any heard of these Bounce Back Loan Bounty Hunters that some Banks are using to chase down scammers who cheated them out of a BBL?
They state they are using some new bank statement analysis software that makes spotting BBL skulduggery a Breeze!
They are reporting major increase in success rates from previous .01% to 30%.
They state they are using some new bank statement analysis software that makes spotting BBL skulduggery a Breeze!
They are reporting major increase in success rates from previous .01% to 30%.
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- Original Poster
- #251
AIM-listed Manolete Partners is a specialist litigation financing company that funds and buys insolvency claims. The litigation funder works with lawyers to maximise recovery of creditors’ funds.
Manolete chief executive Steven Cooklin told City A.M. that outside of the Barclays project, the insolvency practitioner has worked on a series of projects to recover “misappropriated Bounce Back monies” over the last 18 months.
“Recovery rates have generally been very high and cases completed within an average of just 5 months and at minimal cost,” Cooklin said, as he suggested Manolete’s “track record in this area” puts it in a strong position to complete the Barclays project.
Manolete chief executive Steven Cooklin told City A.M. that outside of the Barclays project, the insolvency practitioner has worked on a series of projects to recover “misappropriated Bounce Back monies” over the last 18 months.
“Recovery rates have generally been very high and cases completed within an average of just 5 months and at minimal cost,” Cooklin said, as he suggested Manolete’s “track record in this area” puts it in a strong position to complete the Barclays project.
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Another Bad Director:
www.printweek.com
Signage boss barred over Covid loans - Printweek
The director of a signage business has been banned for misuse of taxpayer-backed Covid loan support.
www.printweek.com
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Another Bad Director:
Signage boss barred over Covid loans - Printweek
The director of a signage business has been banned for misuse of taxpayer-backed Covid loan support.
Well, the warning signs were there...
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It serves them right.
The Corona Virus Syndrome was not an accuse to get rid of all your responsibilities and blame the virus on everything and just have a laugh and do what you want
The government at the time gave the impression that they would repay the banks if the loans were defaulted but nobody read the small print.
They cant get their money until they have explored all avenues of recovery. There are a lot of genuine cases of businesses struggling after taking the loans but just as many thought that they were getting free money .
Things will always come back to bite you
The Corona Virus Syndrome was not an accuse to get rid of all your responsibilities and blame the virus on everything and just have a laugh and do what you want
The government at the time gave the impression that they would repay the banks if the loans were defaulted but nobody read the small print.
They cant get their money until they have explored all avenues of recovery. There are a lot of genuine cases of businesses struggling after taking the loans but just as many thought that they were getting free money .
Things will always come back to bite you
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- Original Poster
- #256
Another BBL skuldegerry case resulting in a 18 months prison sentence.
Curry house owner from Derbyshire jailed after pocketing £50,000 Covid bounceback loan.
A restaurant owner from Derbyshire who fraudulently took out a £50,000 Covid bounceback loan, then dissolved his company on the day he was handed the money, has been jailed.
Syed Hussain, owner of former curry house Moja, in Dale Road in Matlock, was sentenced to 18 months in prison.
Derby Crown Court heard that in May 2020 Hussain told NatWest that the turnover of his restaurant was £200,000, meaning he could ask for the maximum handout from them.
However, the last time he had filed any accounts, the amount was just £3,000.
Recorder Nicholas Watson said: “You applied for the loan on May 19 (2020), it was quickly approved on May 20 because the usual check and balances were not carried out.
"The funds were drawn down on May 21 and you moved them from your business account to your personal account and it is no coincidence that on the same day you dissolved the company.“You concealed the dissolution of the business from NatWest because, had you been honest with them, they would not have given it (the money) to you.
"You then quickly dissipated the money and the Government is now £50,000 short.
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- Original Poster
- #257
Well here we go - Insolvency Service secures 1st compensation order for BBL skulduggery!
Marian Ghimpu, 58, from Croydon, has been disqualified as a director for 13 years, and ordered to repay over £50,000 to the public purse.
The compensation order, the first secured by the Insolvency Service in court, is the result of abuse of the Bounce Back Loan scheme by Ghimpu during the pandemic.
In October 2020, he took out the maximum £50,000 available despite his company only being eligible for a loan of £2,000, the minimum amount available
The bank accounts for his company, Deea Construct Ltd, showed no activity for a year up to the point when he claimed the loan, and only a handful of small transactions totalling just over £4,000 from a construction firm in the summer of 2019. However, he told his bank his company’s turnover was £200,000.
After receiving the £50,000 loan into the company account, Ghimpu transferred over £40,000 to himself and took the rest out in cash withdrawals.
In April 2021, he put the company into liquidation which triggered an Insolvency Service investigation.
As efforts to recoup the loan money by the liquidator were not successful, the Insolvency Service sought a compensation order against Ghimpu in court.
On 25 July 2023, Chief ICC Judge Briggs at High Court of Justice, Rolls Building imposed a compensation order of £52,163. Ghimpu was given 5 weeks to pay this, to ensure the taxpayer has not lost out.
Marian Ghimpu, 58, from Croydon, has been disqualified as a director for 13 years, and ordered to repay over £50,000 to the public purse.
The compensation order, the first secured by the Insolvency Service in court, is the result of abuse of the Bounce Back Loan scheme by Ghimpu during the pandemic.
In October 2020, he took out the maximum £50,000 available despite his company only being eligible for a loan of £2,000, the minimum amount available
The bank accounts for his company, Deea Construct Ltd, showed no activity for a year up to the point when he claimed the loan, and only a handful of small transactions totalling just over £4,000 from a construction firm in the summer of 2019. However, he told his bank his company’s turnover was £200,000.
After receiving the £50,000 loan into the company account, Ghimpu transferred over £40,000 to himself and took the rest out in cash withdrawals.
In April 2021, he put the company into liquidation which triggered an Insolvency Service investigation.
As efforts to recoup the loan money by the liquidator were not successful, the Insolvency Service sought a compensation order against Ghimpu in court.
On 25 July 2023, Chief ICC Judge Briggs at High Court of Justice, Rolls Building imposed a compensation order of £52,163. Ghimpu was given 5 weeks to pay this, to ensure the taxpayer has not lost out.
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- Original Poster
- #262
They seem to be coming thick & fast at the moment - pattern beginning to emerge .... easy pickings to start with will be the cases where there is blatant attempt to dissolve the company without informing anybody or where they have succeded in dissolving the company with a BBL outstanding
Ivan Hristov Fratev, 57 was also given a 2-year suspended sentence with 4 months’ electronically tagged curfew, at Snaresbrook Crown Court, in addition to a 6-year ban, for dissolving his business after taking out the loan. The judge also included 15 days rehabilitation activity requirement (RAR) as part of his suspended sentence.
Fratev was the sole director of Chingford-based BI&F Ltd, which traded as a construction, security and extermination business from premises in Alpha Road. In May 2020 he applied for the maximum £50,000 Bounce Back Loan, designed to help businesses keep afloat through the pandemic.
But within two weeks of the money arriving in the company bank account, Fratev applied to dissolve BI&F Ltd, without informing the bank that had loaned him the money. Failure to notify creditors of plans to strike off a company is a criminal offence.
He was caught through powers granted to the Insolvency Service in December 2021, which allow it to investigate directors of dissolved companies who are suspected of closing their business to avoid repaying Covid-19 support loans.
Ivan Hristov Fratev, 57 was also given a 2-year suspended sentence with 4 months’ electronically tagged curfew, at Snaresbrook Crown Court, in addition to a 6-year ban, for dissolving his business after taking out the loan. The judge also included 15 days rehabilitation activity requirement (RAR) as part of his suspended sentence.
Fratev was the sole director of Chingford-based BI&F Ltd, which traded as a construction, security and extermination business from premises in Alpha Road. In May 2020 he applied for the maximum £50,000 Bounce Back Loan, designed to help businesses keep afloat through the pandemic.
But within two weeks of the money arriving in the company bank account, Fratev applied to dissolve BI&F Ltd, without informing the bank that had loaned him the money. Failure to notify creditors of plans to strike off a company is a criminal offence.
He was caught through powers granted to the Insolvency Service in December 2021, which allow it to investigate directors of dissolved companies who are suspected of closing their business to avoid repaying Covid-19 support loans.
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- Original Poster
- #263
8 Months Prison sentence for this bad boy - overstated turnover, didnt send copy of strike off application to Bank and gave some cock & ball story that would repay in 12 months when got caught.
Fair play though did leave £400 of the BBL for the benefit of the company. There's Silver lining to every case !
Aleksander Staskiewicz, 35, from Southampton, was sentenced to eight months imprisonment at Southampton Crown Court on 17 August 2023, for offences contrary to the Fraud Act 2006 and the Companies Act 2006.
Staskiewicz applied for a £20,000 Bounce Back Loan in May 2020 when the country was in lockdown. However, his company Think Gas Ltd had already been in financial difficulty before the pandemic had struck, and he had considered closing it down.
Instead, he overstated his company’s turnover in his application for the government funding and withdrew £19,600 the day after the loan was deposited in the company account. The day after this, he applied to close down his company by having it struck off from the Companies House register.
The striking-off application to dissolve a company makes clear that creditors, such as a bank with an outstanding loan, should be notified within seven days of applying to close the business, and that failure to notify interested parties is a criminal offence. Staskiewicz did not inform his bank.
The company’s affairs were investigated by the Insolvency Service after counter-fraud systems flagged the likelihood that fraud had occurred.
Attempting to avoid a custodial sentence, Staskiewicz told the court that he hoped to repay the loan money back within 12 months. However, he had made no effort to repay the loan in the past three years.
Fair play though did leave £400 of the BBL for the benefit of the company. There's Silver lining to every case !
Aleksander Staskiewicz, 35, from Southampton, was sentenced to eight months imprisonment at Southampton Crown Court on 17 August 2023, for offences contrary to the Fraud Act 2006 and the Companies Act 2006.
Staskiewicz applied for a £20,000 Bounce Back Loan in May 2020 when the country was in lockdown. However, his company Think Gas Ltd had already been in financial difficulty before the pandemic had struck, and he had considered closing it down.
Instead, he overstated his company’s turnover in his application for the government funding and withdrew £19,600 the day after the loan was deposited in the company account. The day after this, he applied to close down his company by having it struck off from the Companies House register.
The striking-off application to dissolve a company makes clear that creditors, such as a bank with an outstanding loan, should be notified within seven days of applying to close the business, and that failure to notify interested parties is a criminal offence. Staskiewicz did not inform his bank.
The company’s affairs were investigated by the Insolvency Service after counter-fraud systems flagged the likelihood that fraud had occurred.
Attempting to avoid a custodial sentence, Staskiewicz told the court that he hoped to repay the loan money back within 12 months. However, he had made no effort to repay the loan in the past three years.
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- Original Poster
- #268
I just hope the Government do not pay out under the Guarantee where the Banks didn't even carry out the basics of checks before dolling out the BBL - 2 & 5 on the list as highlighted by @nelioneil
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Now that’s a good call you’d like to think the first question our Gov ask the bank is handover the copies of any due diligence you carried out
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- Original Poster
- #270
This is interesting - Department for Business & Trade response to questions surrounding Strike Off applications with BBL's in place:
If you attempt to take the Strike Off route with a BBL in place you will find they will get blocked and you then find yourself in a stalemate position with the Strike-Off/Dissolution ping-ponging every few months.
Does a strike off just bounce backwards and forwards every six months?
“Objections are renewed on a six-monthly basis if not withdrawn by the lender. Your Company by the way is still legally classed as an active Company with the block/objection in place so you will still be legally required to file Accounts & Confirmation statements.When will the strike off become unblocked and allowed to proceed, if ever?
“The Government will remove its objection when it receives confirmation via the lender that the Bounce Back Loan has been repaid, or the lender confirms the objection can be removed for another reason, for example as part of an agreement with a vulnerable borrower.
Businesses are 100% liable for repaying the loan and any interest to the lender. This is right and proper in order to protect the public purse.
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- Original Poster
- #271
This is comforting to know!
"Rachel Reeves to Announce a New Covid Corruption Commissioner If Labour Win the Next Election to Go After All Manner of Abuse of the Public Purse During the Pandemic Such as Eat Out to Help Out Scheme Abusers, Council Business Grants Blaggers and Bounce Back Loan Scammers"
f you got a Bounce Back Loan, a Council issued Business Grant during the pandemic or even money from the Eat Out to Help Out (EOTHO) Scheme, but committed any form of wrongdoing, such as over-egging your turnover to get a BBL, spending it in a way you were not allowed, or fiddling the figures to blag the EOTHO Scheme, or even skanked a council covid business grant, you may be about to have your collar felt, well if Labour get into power.
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- Original Poster
- #272
The UK government has removed state guarantees from almost £1bn in Covid-19 emergency loans, pushing potential losses on to banks if borrowers fail to repay them.
The taxpayer-owned British Business Bank (BBB), which runs the loan schemes, removed state guarantees from 10,786 loans worth a combined £979m up to 11 October, according to data released under freedom of information (FoI) laws.
The guarantees were removed for a variety of reasons, the BBB said, including because of data corrections, application errors resulting in “duplicate” funds being sent to companies, as well as infringements of scheme rules.
The taxpayer-owned British Business Bank (BBB), which runs the loan schemes, removed state guarantees from 10,786 loans worth a combined £979m up to 11 October, according to data released under freedom of information (FoI) laws.
The guarantees were removed for a variety of reasons, the BBB said, including because of data corrections, application errors resulting in “duplicate” funds being sent to companies, as well as infringements of scheme rules.
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i saw an article on that.
From your insider knowledge, do you know how they are identifying the ones they won't back. Is it obvious egregious fraud or a random selection or certain banks being targeted ?
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Another naughty one caught.....
www.printweek.com
The issuing bank clearly made NO financial checks on this company before they issued the loan........crazy.
Printweek - Director disqualified after Covid loan support given to dormant firm
A director of a business specialising in personalised sweets and other edible items has been barred for a decade for claiming a taxpayer-backed Bounce Back Loan on false pretences.
www.printweek.com
The issuing bank clearly made NO financial checks on this company before they issued the loan........crazy.
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"Of the £50,000 loan more than £32,156 remains outstanding."
So he's managed to nick £32,000 from Barclays, and all he gets by way of punishment is disqualification from being a director. He's 68 years old, and lives in a £600k house, so that's probably of no concern to him at all.
Yet someone struggling to survive on benefits who `forgets' to tell the DWP that her boyfriend's moved in with her ends up in the Magistrates' Court for fraud.
People like him need to be prosecuted, or at the very least be forced to repay the money, not just slapped on the wrist.
So he's managed to nick £32,000 from Barclays, and all he gets by way of punishment is disqualification from being a director. He's 68 years old, and lives in a £600k house, so that's probably of no concern to him at all.
Yet someone struggling to survive on benefits who `forgets' to tell the DWP that her boyfriend's moved in with her ends up in the Magistrates' Court for fraud.
People like him need to be prosecuted, or at the very least be forced to repay the money, not just slapped on the wrist.
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In a conversation last night I was struggling to think of a government body or institution that actually seems to be functioning properly. I certainly I would never trust the banks. As long as there are tax payers or customers to pick up the tab I am pretty sure it just all gets swept under the carpet.
I perhaps should add, this conversation all started after watching the drama Post Office .......need I say anymore
I perhaps should add, this conversation all started after watching the drama Post Office .......need I say anymore
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In lying, concealing and denying these individuals further exacerbate damage inflicted on innocents
Top of my list for prosecution would be The Post Office’s former chief executive Paula Vennells, her complicit associates and predecessors.
"in post for the final years of its prosecutions [of innocent post office operators] and ultimately responsible for its ongoing obstruction of justice [Vennels] collected more than £4.5m in pay during her tenure, £2.2m of which was performance-related bonuses. She was also awarded a CBE in 2019, which she should hand back without further delay."
"Hundreds of post office operators must be cleared and compensated, while those responsible for their wrongful persecution should face the courts"
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- Original Poster
- #280
Bounty Hunters Update
Another BBL lender has signed up to use a Bounty Hunter firm- Barclays is one I know off
if you are a Limited Company Director with a Bounce Back Loan in default or on the way to being defaulted, you are urged to get your Company affairs in order, and quickly. If you are unaware of just what those Bounty Hunters do, well they are a firm of Litigation Funders, who pay to go chasing after money owed when a Company Director has done any form of wrongdoing and owes creditors money.
They pay for the privilege of doing so, and in return they then get a cut of all funds recovered.The BBL Lender applies to the High Court to get a Limited Company wound up, and then they designate an Insolvency Practitioner and in turn a Solicitor to go aggressively after the Directors of such firms, to get as much money back from those Directors as they can, even by going after their personal property and everything else if needed.
So what are red flags IP's are looking for when deciding to engage Solicitors who in turn team up with Bounty Hunters to go after Directors?
Another BBL lender has signed up to use a Bounty Hunter firm- Barclays is one I know off
if you are a Limited Company Director with a Bounce Back Loan in default or on the way to being defaulted, you are urged to get your Company affairs in order, and quickly. If you are unaware of just what those Bounty Hunters do, well they are a firm of Litigation Funders, who pay to go chasing after money owed when a Company Director has done any form of wrongdoing and owes creditors money.
They pay for the privilege of doing so, and in return they then get a cut of all funds recovered.The BBL Lender applies to the High Court to get a Limited Company wound up, and then they designate an Insolvency Practitioner and in turn a Solicitor to go aggressively after the Directors of such firms, to get as much money back from those Directors as they can, even by going after their personal property and everything else if needed.
So what are red flags IP's are looking for when deciding to engage Solicitors who in turn team up with Bounty Hunters to go after Directors?
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