Eleven linked businesses tracked down and targeted
In their latest investigation they have managed to arrange the compulsory liquidation or winding up of 11 individual but linked companies as part of a systematic fraud operation arranged during the pandemic.
Between them, these companies claimed £500,000 through the bounce back loan scheme (BBLS) claiming to be registered at various offices in Berkshire, Lancashire, London and Shropshire.
On further investigation, the Insolvency Service could not identify actual trading premises for any of the companies nor any evidence that they had ever actually traded.
Nine of the companies were found to have claimed the maximum available £50,000 while one somehow managed to obtain two.
Further investigation revealed more close links between the companies including shared addresses, funds being moved between them and ultimately being transferred to corporate entities registered in Hong Kong.
Investigators were also able to establish links to five other companies that had previously been wound up by the Insolvency Service in 2021 and 2022. Coincidentally, they had themselves been responsible for fraudulently claiming £250,000 in bounce back loans and £350,000 in small business grants.
The wound up businesses were:-
- Laslett Industries Limited
- JP Capital Management Ltd (formerly called Hampton Brookers Limited)
- CMJA Limited
- JK Distributions Limited
- Kubrick Trade Ltd
- Lowe Brokers Limited
- Rubeum Auri Limited
- Share Apartment Limited
- Stella Management Limited
- Globexel Ltd
- JLS Enterprises Limited
The formal grounds for winding up the companies include: being vehicles for the abuse of the BBL scheme; being a vehicle for the abuse of an invoice financing agreement; lack of transparency; failure to cooperate with the investigation; failure to maintain, preserve & deliver up adequate accounting records; failure to file statutory accounts and facilitating fraudulent activity.
The Official Receiver is working to trace these funds and the directors behind the companies after being appointed by the High Court.
Dave Hope, chief investigator at the Insolvency Service, said: “We want to ensure the UK is a safe and fair place to trade, and if there is evidence sham companies are operating and involved in the systematic abuse of taxpayers’ money, we will take action to have them shut down.
“These rogue films abused the government’s support for genuine businesses in their time of greatest need.”
When the bounce back loan scheme was first announced in 2020, it was seen as an essential lifeline to many businesses who were looking at zero income for the forthcoming weeks and months.
While it was definitely welcome, and many small and medium sized businesses were able to access the full £50,000 maximum amount, as the pandemic and lockdowns extended into 2021 and their effects are still being felt across numerous sectors in 2022 and 2023, that same lifeline has now become an anchor for many.
Which is even more reason why if your business is facing financial turbulence, you should get in touch with us as soon as you can.
We offer a free initial consultation for any director or business owner who wants to explore what options are available to them to either restructure their business or close down if there is no clear way forward to clear debts and make a profit in future.
Our advisors will be able to talk you through every path available to you and what your next steps would entail. In the case of bounce back loans, they are an unsecured debt so as an example, if a business closed through a creditors voluntary liquidation (CVL) then they would be written off along with the rest of their outstanding debts upon closure.
Before you make any decision about your future – find out what all your options are first.