Insolvency Service cracks down on Bounce Back Loan fraud
The Insolvency Service has given bans to directors who defrauded the Bounce Back loan scheme.
Inderjit Singh Dadial from Wolverhampton was the sole director of Cali Juices Ltd, a wholesaler of specialised soft drinks, has received a nine-year ban and Raitis Dzerkalis from Coventry was the sole director of RDZ Solution, a mobile vehicle breakdown service, has received a 10-year ban.
The disqualification undertaking prevents them from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.
In June 2020 Mr Dadial applied for and secured the £50,000 loan through the Bounce Back scheme.
The company’s accounts ending January 2020 however showed a turnover of just over £2,000, but the Insolvency Service investigation found that Mr Dadial had lied and stated the turnover as £250,000.
The company, therefore, was not eligible for any money under the scheme based on its actual accounts, and income received into the company’s bank account.
Dave Elliott, Chief Investigator at The Insolvency Service said: “Inderjit Singh Dadial had significantly inflated the turnover on the application to obtain a loan to which Cali Juices Limited was not entitled.
“The Insolvency Service will not hesitate to investigate and use its powers against those who have abused the COVID-19 support schemes.”
Mr Dadial admitted to grossly inflating the company’s turnover to secure the loan. His ban runs from 21st March 2022 and lasts for nine years.
Similarly, in June 2020, Dzerkalis applied for and secured £40,000 through the Bounce Back Loan scheme. The company’s accounts ending October 2019 showed turnover of just £12,240, but Dzerkalis fraudulently stated the turnover as £162,240. In reality, the most the company was eligible for under the scheme was £3,060.
The mechanic proceeded to spend nearly the full loan amount for his own personal benefit, and not for legitimate business requirements, breaching the terms of the Bounce Back Loan scheme.
Recovery of the funds is ongoing with £8,000 recovered to date.
The Secretary of State for Business, Energy and Industrial Strategy accepted a disqualification undertaking from Raitis Dzerkalis after he admitted securing the Bounce Back Loan fraudulently. His ban runs from 28 February 2022 to 27 February 2032.
Dave Elliott, chief investigator at The Insolvency Service said: “Covid Support Schemes were a lifeline to businesses across the UK protecting jobs and preserving businesses.
“As this case shows The Insolvency Service will take swift firm action against directors who sought to abuse the scheme.”
