Suspended prison sentence and full repayment compensation order for Bounce Back Loan fraudster
In September 2023 we reported that Bounce Back Loan cases for fraud/misuse/misapplication were now coming to trial before Civil and Criminal Courts, with punishments including: Director Disqualification, Compensation Orders, Costs Orders and even imprisonment, as the Government seeks to recover the £11 billion worth of BBLs that the National Audit Office estimates was lost to fraud.
In this article, we look at a case reported by the Insolvency Service, in which a North London based director was ordered to repay a £50,000 BBL in full and also received a 2-year suspended prison sentence for using the money for his own personal gain.
The details of this case
A North London man, Salih Ozhot, applied for a BBL of £50,000 in September 2020 to support his courier and shisha cafe businesses during the Covid 19 pandemic. He was declared bankrupt in 2021 and an investigation discovered that he had fraudulently applied for the loan and had not used the money to support his business, but for his own personal use.
The Insolvency Service’s investigation, which revealed that £19,000 of the loan was withdrawn from his businesses and within one week of receiving it, and that he had used the loan for personal use rather than business purposes, ended up in Court on 2nd February 2023, where Ozhot was sentenced to two years in prison, suspended for two years.
The Insolvency Service also successfully applied for a compensation order, meaning Ozhot will have to repay the £50,000 he fraudulently obtained. In addition, Ozhot cannot act as a company director without permission from a court.
Julie Barnes, Chief Investigator at the Insolvency Service, said:
“Salih Ozhot abused a scheme designed to offer genuine support to businesses through the pandemic. His actions were cynical, sophisticated and pre-planned.
He cheated the taxpayer for personal gain when the loans specified they were only to be used for the economic benefit of the business.
The Insolvency Service will not hesitate to take action against those who so flagrantly steal from the public purse.”
Talk to our Insolvency Litigation and Director Disqualification specialists if facing investigation for a BBL
BBL fraud is a serious offence, as this case study shows. In cases such as these, where the offence is very clear, the only issue is how stern the punishment will be.
However, as with many of the cases we have been instructed on, we have been able to reduce the Director Disqualification period sought or persuade the IS to drop the Investigation. The earlier we are involved, the more we can do to help. Contact us or call us on 0121 200 7040 for a free initial discussion.