On 7th October 2020 the National Audit Office (NAO) announced up to 60 per cent of borrowers using the government’s Covid-19 Bounce Back Loan scheme could default on repayments due to fraud.
Bounce Back Loan Fraud | Rosenblatt’s Financial Crime Team
The NAO said the Bounce Back Loan scheme, which was launched in May 2020, could result in between £15bn and £25bn not being paid back. The scheme allows small business affected by the pandemic to borrow up to £50,000 with no repayments or interest due for the first 12 months.
The scheme is susceptible to exploitation, with cyber criminals known to hijack the identities of individuals through phishing or acquiring their details through criminal forums, before setting up fake companies in their names to apply for the loans. Evidence of hundreds of instances of Bounce Back Loan identity fraud has been uncovered.
Criminal Proceedings | Rosenblatt’s Financial Crime Team
There have already been arrests made due to suspected criminal activity in relation to Bounce Back loans.
In July, two men were arrested by the Metropolitan Police on suspicion of money laundering and fraud over an alleged scam to claim more than £500,000 from the scheme. One suspect, in his late forties, is believed to have organised the setting up of fake companies and bank accounts. Officers were given permission to freeze ten bank accounts containing £553,305.
In August, a 35-year-old woman was arrested by the Metropolitan Police and Suffolk Police on suspicion of money laundering and fraud. Officers successfully applied for the detention of £115,000 of crypto currency alleged to be the proceeds of fake applications to acquire Bounce Back loans.
Rosenblatt can help
Rosenblatt has a wealth of experience in financial crime and is uniquely placed to support clients’ that are the subject of investigations by the Police having being involved in some of the most high profile investigations into multi-million-pound, cross jurisdictional fraud cases in the UK.
https://www.rosenblatt-law.co.uk/services/financial-crime/#white-collar-crime
https://www.rosenblatt-law.co.uk/services/serious-and-general-crime/
