Fraudulent firms shut down after abusing COVID loan support
Two companies, one claiming to be based in Shropshire, which fraudulently applied for thousands of pounds worth of COVID support loans have been wound up in the courts.
The two separate companies submitted false documents to at least 41 local authorities and the Government’s Bounce Back Loan scheme to secure £230,000 worth of grants put in place to support businesses during the pandemic.
LV Distributions Ltd and SIO Traders Ltd were wound-up in the High Court in separate hearings on 27 July following confidential enquiries conducted by the Insolvency Service, which proved neither company ever traded.
Investigators uncovered that SIO Traders registered its offices in Whitchurch, Shropshire, but provided false lease documents and utility bills to 14 different local authorities to fraudulently claim it traded out of premises in the area.
SIO Traders claimed it supplied PPE and secured £95,000 worth of business grants from 10 local authorities.
The company also received a £50,000 Bounce Back Loan it was not entitled to.
LV Distributions had registered its offices in Redhill, Surrey, and claimed to sell medical care products. Similar to SIO Traders, in a 10-day period between 17 and 27 August 2020, LV Distributions provided false lease documents and utility bills to 27 local authorities.
The company fraudulently secured £35,000 in business grants from two local authorities, as well as a £50,000 Bounce Back Loan.
Small Business Minister Paul Scully said: “This decisive enforcement action shows that we will not tolerate shameless attempts to defraud the taxpayer and falsely claim public money intended to help businesses through the pandemic.
“We are cracking down on Covid fraud across the board and those who have tried to take support they were not entitled to, which was given in response to the worst crisis of our lifetimes, can expect to face heavy consequences.”
Herefordshire County Council was targeted on two occasions by SIO Traders. The local authority initially paid £10,000 after SIO Traders’ first fraudulent application but was able to recover the funds in full, before rejecting a second £10,000 application and reporting the company’s activities.
Herefordshire Council’s Cllr Liz Harvey, cabinet member for finance, corporate services and planning, said: “We have spent more than a year allocating millions of pounds of financial support for local businesses who have been affected by the pandemic. To see companies trying to take advantage of this difficult and unprecedented situation, and fraudulently claim support that is intended to help those who really need it, is despicable.
“Herefordshire Council will not tolerate fraud, and it is pleasing to see these two companies wound up.”
