Bounce Back Loan Scheme Fraud: 11 Companies Liquidated by the Insolvency Service
The Bounce Back Loan scheme was implemented by the UK government to provide financial assistance to businesses hit hard by the Covid-19 pandemic. However, the scheme was also abused by some unscrupulous entities that perpetrated fraud against UK taxpayers.
Recently, the Insolvency Service successfully secured the liquidation of 11 companies found to orchestrate systematic abuse against the Bounce Back Loan scheme. According to the investigation conducted, the companies claimed £500,000 altogether from the scheme. The companies claimed to be registered in various offices in Berkshire, Lancashire, London, and Shropshire. However, the investigation could not identify the trading facilities of any of the companies, nor did they trade.
The Insolvency Service discovered that nine of the companies involved claimed the maximum available amount of £50,000 through the Bounce Back Loan scheme, with one company claiming two loans. Further investigations revealed significant links between the companies, including the use of common addresses and funds moved among them before eventually being transferred to entities registered in Hong Kong.
Background
Liquidating the 11 companies was due to various reasons, including being vehicles for abuse of the BBL Scheme, abuse of an invoice financing contract, lack of transparency, lack of cooperation with the investigation, failure to maintain adequate accounting records, and facilitate fraudulent activity.
Based on the investigations conducted, the companies identified, as having links to five other companies, which the Bankruptcy Service had previously wound up; because they fraudulently claimed £250,000, including in Bounce Back Loans and £350,000 in Small Business Grants.
The Official Receiver was appointed the receiver of the 11 companies closed by the court at the hearing on May 22, 2023, and is working to trace the funds and those responsible, with a view to recovering the money.
The role of Insolvency Service Principal Investigator – Dave Hope
Dave Hope, Principal Investigator for the Insolvency Service, highlighted that the service intends to make the UK a safe and fair place to do business. If there is evidence that bogus businesses are operating and are involved in the systematic abuse of taxpayers’ money, the Insolvency Service will take necessary action to shut them down.
These rogue companies abused government support meant for genuine businesses in their time of need.
Conclusion
The abuse of government support by fraudulent companies ultimately affects genuine small and medium-sized firms who may need the help but have lost out because of entities exploiting the system flagrantly. The liquidation of the 11 companies is a decisive step in the fight against fraudulent activities, with a clear message sent to possible fraudulent operators that the UK government will remain dogged in its efforts to uncover and clamp down on fraudulent activities.
Summary
The Insolvency Service recently liquidated 11 companies identified as perpetrators of systematic fraud against the UK Bounce Back Loan scheme, claiming £500,000 through the scheme. Nine of the companies claimed the maximum amount possible through the scheme, with investigators discovering links between the companies, including the movement of funds between them before being transferred to entities registered in Hong Kong.
Investigators noted that the companies lacked transparency, cooperation, and failed to maintain adequate accounting records. Additionally, they facilitated fraudulent activity, leading to their liquidation by the High Court of Justice, Manchester Property and Commercial Courts on May 22, 2023.
The investigation revealed links to five previously wound-up companies that had fraudulently claimed over £600,000, flagging the possibility of a broader network of fraudulent activities. The Official Receiver was appointed receiver of the 11 companies and is working to trace and recover the money.
The liquidation of the 11 companies is a decisive step in the fight against fraudulent activity, sending a message to possible future perpetrators of similar crimes. As such, the UK government remains unwavering in its efforts to uncover and clamp down on fraudulent activities.
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The Insolvency Service has successfully secured the liquidation of 11 companies for its part in a scheme that orchestrated systematic fraud against UK taxpayers during the covid-19 pandemic.
Between them, the companies claimed £500,000 through the Bounce Back Loan scheme. The companies claimed to be registered at various offices in Berkshire, Lancashire, London and Shropshire, however the Insolvency Service investigation was unable to identify the trading facilities of any of the companies, or that they had ever traded.
Nine of the companies were found to have claimed the maximum available £50,000 through the Bounce Back Loan scheme, with one company even claiming two loans. Investigators found a large number of links between the various companies, including the use of common addresses, and funds moved between them before ultimately being transferred to entities registered in Hong Kong.
The companies were identified by investigators due to their links to five other companies that had previously been wound up by the Bankruptcy Service in 2021 and 2022. They had been responsible for fraudulently claiming £250,000 including in Bounce Back Loans and £350,000 in Small Business Grants.
The Official Receiver was appointed receiver of the 11 companies closed by the court at the hearing on May 22, 2023. The Official Receiver is working to trace the funds and those responsible, with a view to recovering the money.
Dave Hope, Principal Investigator for the Insolvency Service, said:
We want to make sure the UK is a safe and fair place to do business, and if there is evidence that bogus businesses are operating and are involved in the systematic abuse of taxpayers’ money, we will take action to shut them down.
These rogue companies abused government support for genuine businesses in their time of greatest need.
Background
- Laslett Industries Limited (Company Registration No. 11690274)
- JP Capital Management Ltd (formerly Hampton Brookers Limited) (Company Registration No. 11690206)
- CMJA Limited (Company Registration No. 11690056)
- JK Distributions Limited (Company Registration No. 11667454)
- Kubrick Trade Ltd (Company Registration No. 11386566)
- Lowe Brokers Limited (Company Registration No. 11474219)
- Rubeum Auri Limited (Company Registration No. 11886277)
- Share Apartment Limited (Company Registration No. 12248395)
- Stella Management Limited (Company Registration No. 11886188)
- Globexel Ltd (Company Registration No. 12063877)
- JLS Enterprises Limited (Company Registration No. 11830409)
The reasons for liquidating the 11 companies included, in various ways: being vehicles for abuse of the BBL Scheme; being a vehicle for the abuse of an invoice financing contract; lack of transparency; lack of cooperation with the investigation; lack of maintenance, conservation and/or delivery of adequate accounting records; failure to submit legal accounts and confirmation statements; facilitate fraudulent activity.
The companies were wound up by the High Court of Justice, Manchester Property and Commercial Courts on 22 May 2023.
The Official Receiver was appointed as liquidator of the 11 companies on May 22, 2023 following liquidation orders issued by U.S. District Judge Ranson
All public inquiries relating to company affairs should be directed to: The Official Receiver, Public Interest Unit, 16th Floor, 1 Westfield Avenue, Stratford, London, E20 1HZ. Telephone: 0300 678 0015 Email: piu.or@insolvency.gov.uk.
Company Inquiries, part of the Insolvency Service, uses the powers of the Companies Act 1985 to conduct confidential fact-finding inquiries into the activities of limited companies active in the UK on behalf of the Secretary of State for Business and Trade (DBT). Information on how to complain about a live company.
Bounce Back Loans were a government scheme where genuine businesses affected by the pandemic could obtain taxpayer-backed interest-free loans of up to £50,000.
More details about the liquidation of the above five companies as part of this network can be found here:
Click for more information about the work of the Bankruptcy Service.
You can also follow the Bankruptcy Service at:
https://www.gov.uk/government/news/network-of-fake-companies-shut-down-following-bounce-back-loan-fraud
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