Part of the Governments response to the Covid 19 Pandemic, was to grant furlough monies, “bounce back “ and other business loans, under the auspices of HMRC and the banks.
At least 1.43 million “ bounce back “ loans were issued up to a limit of £50,000 each since May 2020. That financial response has undoubtedly been invaluable, it saved jobs and businesses but many criticise the speed of those Government grants and loans. The banks themselves complained that they simply did not have the time to implement all their usual investigations and checks, so there was always the potential for fraud. The NAO (the National Audit Office) assessed that Covid 19 fraud would cost the country £26 billion.
The NCA have made a number of high profile arrests since the first Covid 19 lockdown in 2020, in particular the recent arrests of three individuals suspected of involvement in a £6 million “bounce back “ business loan fraud. All three were arrested by the NCA Complex Financial Crime unit, and it would appear that they were employed by the same financial institution.
So, the authorities can open criminal investigations, bring criminal prosecutions which may or may nor lead to criminal convictions, lengthy prison sentences and asset confiscation.
These type of fraud investigations are very lengthy, often taking years, and are extremely expensive for the authorities, consequently they often look to quicker, cheaper recovery options using the Civil justice system.
HMRC have an armoury of options in these cases, including criminal prosecutions, civil asset recovery, Account Freezing Orders and have recently written letters to individuals whom they suspect of having been involved in such frauds demanding information and an explanation.
The banks have also recently taken steps to recover fraudulently obtained funds, they can quite simply claw back the monies (£50,000)from the accounts into which they were paid, there is a standard clause in the Covid 19 business loan agreements, which allows the banks to do this.
Alternatively, they (and the NCA and HMRC) can apply for an Account Freezing order, which are civil proceedings, usually originated ex parte, heard in the Magistrates Courts. It would then be up to the applicant and recipient of the monies to prove that the monies are legitimate or risk the forfeiture of these monies.
How can we, at Lewis Nedas Law, help if you are under suspicion of obtaining fraudulent monies?
We are perhaps one of the few leading law firms that have specialist teams of senior lawyers who successfully defend those facing fraud investigations, account freezing orders, and civil asset recovery proceedings. Get in touch today.