Suspended jail sentences for Bounce Bank Loan frauds

A father and daughter who secured £75,000 in Covid Bounce Back Loans for their two Merseyside car parts businesses have received suspended prison sentences for fraud after claiming a further £65,000 they were never entitled to.

Catherine Deegan received legitimate loans worth £25,000 and £50,000 for Bootle Cars & Commercials Limited and the almost identically named Bootle Car and Commercial Limited in May 2020.

However, Deegan and her father Gerard Deegan, fraudulently obtained a further £65,000 from the taxpayer-backed scheme.

Catherine Deegan used money from the loans to make payments to herself, including for rent on a caravan.

The case was brought by the Insolvency Service which has notched up a series of prosecutions of companies who were lent money under the Bounce Back loan scheme.

Any money loaned out must be paid back, over 6 or 10 years, with payments starting 12 months after the company received the loan. The Insolvency Service is also pushing out the message that they will investigate any company which has not repaid the loans, even if it has been dissolved.

Claire Entwistle, Assistant Director of Operations at the Insolvency Service, said:  “Catherine and Gerard Deegan deliberately abused a scheme established to support small and medium-sized businesses during the pandemic.

“As part of the Bounce Back Loan application process, companies said they would use the loan only to provide economic benefit to the business, not for personal purposes.

“Both of the defendants showed complete disregard for the scheme and this behaviour will not be tolerated by the Insolvency Service.”

Catherine Deegan, 43, of Ferndale Road, Bootle, was sentenced to 10 months in prison, suspended for 18 months, when she appeared at Liverpool Crown Court on Tuesday 20 August.

She was also ordered to complete 150 hours of unpaid work.

Gerard Deegan, of Moss Lane, Lydiate, was sentenced to 16 months in prison, suspended for 18 months, at the same court on Thursday 22 August.

The 65-year-old was also disqualified as a company director for 10 years and placed under an electronically monitored curfew between 6pm and 6am for the next eight months.

Bootle Car and Commercial was a long-running family business, having been incorporated in November 1984.

Bootle Cars & Commercials was only set up in February 2020, with the defendants stating they wished to expand their business into the Isle of Man.

Catherine Deegan received a £25,000 Bounce Back Loan for this newer company just three months later.

Within two weeks, she had successfully applied for another £15,000 from a separate bank, after her application for a top-up from the initial provider was rejected because the business was not entitled to it. She made £3,000 in payments to herself from this loan.

In May 2020, Catherine Deegan then secured a legitimate £50,000 Bounce Back Loan for the separate Bootle Car and Commercial.

Gerard Deegan then made an application for a further £50,000 Bounce Back Loan for Bootle Car and Commercial in June 2020.

In interviews, he told the Insolvency Service that he knew his daughter had taken out a separate loan for £50,000 for the company the previous month but that he nevertheless continued to make the application.

Liquidators were appointed for Bootle Car and Commercial in December 2021.