For some time now, I have issued warnings to directors of companies who applied for Bounce Back Loans fraudulently, or where the funds were not utilised for the purpose of the business.
To date, while there have been prosecutions of directors who made fraudulent claims or who simply spent the funds on a new car, kitchen or holiday, the sentences have been either to repay the funds, disqualification from acting as a director for up to 15 years, or in some cases, both.
Today however, the first Bounce Back Loan fraudster has been jailed. The details can be seen here.
This really should act as a lesson for those directors who are hoping that their actions might slip under the radar.
The Insolvency Service has had the power since February 2022, to investigate companies post dissolution and it seems they are doing just that. Taking into account also that the court is willing to hand out custodial sentences for offenders, the advice the Insolvency Service has given to directors to ‘come clean and repay the monies’ is probably very sound advice.
Of course most bounce back loans were not fraudulent and the funds were used for the purpose of the business in which case if the company is unable to repay the bank, then the advice is to contact us for more detailed advice. There is no charge for the initial consultation.