Published: 03/08/2022 By Hannah McCormackThe Insolvency Service have been working hard to crack down on directors who have abused the governments bounce back loan scheme. They have been issuing disqualifications to directors who have taken the loans out fraudulently, not using them for legitimate business use, with no intentions on paying them back. With the assistance of Insolvency Practitioners, who are often the first to come across any misconduct, IP’s alert the Insolvency Service to potentially fraudulent activity so an investigation can begin.
In order to obtain the bounce back loan these fraudster Directors, would apply under an already insolvent company but without disclosing the company was insolvent i.e. unable to pay its debts as they fall due, meaning once the repayment date for the loan came around the company was already in Liquidation or dissolved therefore the loan is unable to be paid and the director believes they have gotten away with free money! However, not only are the Insolvency Service wise to this and have been issuing disqualifications (almost 200 to date), more recently one of the fraudster directors was jailed for 2 years! This is not a one off and is just the start to further criminal prosecutions against fraudulent directors.
The Insolvency Service are sending a very clear message that any misconduct will not go unnoticed, offenders should come clean now and repay the money before it catches up to them.