Gang leader and fraudster handed £50,000 Covid bounceback loan for fake company despite 48 convictions
Judge says it ‘defies belief’ loan was approved and ‘the most basic of checks would have revealed the fraud’
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A judge has ordered an investigation into how a crime gang obtained £145,000 from the government's Covid bounceback loan scheme for bogus companies.
Judge Anthony Cross QC, said it “defies belief” that ringleader Asif Hussain, 44, was able to successfully apply for the state-backed loan despite him previously being found guilty of 48 offences.
His comments came as he sentenced six men at Manchester Crown Court on Thursday for their roles in a £3m operation to steal and export expensive cars.
Hussain was jailed for 15 years for running the gang, which stole 95 cars including Range Rovers, Porsches and Mercedes, and either shipped them to the Middle East or stripping them for parts.
Sentencing Hussian, the judge told him: “You have a bad record, including a sentence of four years for the supply of drugs.
"You have a total of 48 previous offences for dishonesty and other offences. That such a man as you was able to obtain a Covid loan defies belief.”
He added: “That a criminal such as you could obtain such a huge sum is staggering.”
The judge told prosecutors that he wanted an explanation from “the relevant body” within 14 days as to how the loan, as well as two other bounceback loans taken out by a fellow gang member, had been obtained.
“Here the most basic of checks would have revealed the fraud,” he added.
The government launched the bouncebank loan scheme in April 2020. It was designed to help firms struggling with their finances during Covid lockdowns.
Small and medium-sized businesses were allowed to borrow between £2,000 and up to 25 per cent of their turnover if they met certain criteria. The maximum loan available was £50,000.
The government guarantees 100 per cent of the loan and there were no fees or interest to pay for the first 12 months. After 12 months the interest rate was 2.5 per cent.
After the scheme was launched reports began to emerge outlining how some people were abusing the system for financial gain.
Hussain’s case highlights the extent to which crime gangs were able to exploit the scheme.
According to official estimates, some £5bn of the £47bn loaned out in the scheme, which around a quarter of UK companies applied to, may have been lost in fraud.
Hussain, of Stockport, Cheshire, pleaded guilty to four offences including conspiracy to steal and fraud on the bounceback loan.
He made a £50,000 written application for a loan in May 2020 and received the money to his bogus company just seven days later, the court was told.
His supposed car trading and maintenance firm, German Automotive 365 Ltd, never submitted a tax return or registered for VAT.
Ibraaz Shafique, 23, from Oldham in Greater Manchester, was another of the six those sentenced in relation to the conspiracy.
He received a five-year prison term after admitting five offences, including over two Covid bounceback loans he obtained worth £95,000.
A Department for Business, Energy and Industrial Strategy spokesperson said: “The government support schemes have provided a lifeline to millions of businesses across the UK – helping them survive the pandemic and protecting millions of jobs.
“We are continuing to crack down on Covid-19 fraud and will not tolerate those that seek to defraud the British taxpayer. We are working closely with lenders and enforcement authorities to minimise fraud and ensure those that have committed fraud face consequences.”