Published: 08/09/2023 By Hannah DuncanA Croydon director has been the first to have a compensation order secured at court by the Insolvency Service! The order was granted for him to repay a Bounce Back Loan that was fraudulently taken out during the pandemic.
As well as being ordered to repay just over £50,000 to the public purse, the local director also received a 13-year director disqualification ban.
The maximum loan of £50,000 was taken out by the director, with £40,000 being transferred to him personally and the remainder being drawn out as cash. Based on the director’s business accounts, which showed no activity for the year prior to the loan, meant he would have only been entitled to a loan of £2,000. Instead, the director fraudulently told the bank that the company’s turnover was £200,000. Following on from this, in April 2021 the director placed the company into liquidation, triggering an Insolvency Service investigation. The liquidator of the case was unable to recover the fraudulent loan money so the Insolvency Service went to court for a compensation order.
A compensation order of £52,163 was granted by the court and made payable within 5 weeks.