A London businessman has been sentenced to 6 months in jail, suspended for 18 months, for abusing the bounce again mortgage (BBL) scheme.
Rajesh Dhirajlal Vaghela, 46, from Stanmore, obtained a £25,000 mortgage earlier than closing his enterprise to keep away from repaying the government-backed mortgage.
Vaghela was a director of RKV Consultancy, which had traded as a consulting agency in Stanmore since March 2019. He utilized for a BBL from his financial institution in Could 2020.
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The BBL scheme was launched by the federal government in Could 2020 to assist microbusinesses struggling throughout the pandemic with loans of as much as £50,000. Not like different state-backed assist schemes, BBLs had been totally underwritten by the federal government to encourage lenders to get cash out rapidly.
Inside per week of receiving the cash, Vaghela filed paperwork with Firms Home to have the enterprise dissolved, and later transferred all of the mortgage cash to private financial institution accounts.
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He was caught via new powers granted to the Insolvency Service in December 2021, which permit it to research administrators of dissolved firms who’re suspected of closing their enterprise to keep away from repaying Covid-19 assist loans.
Vaghela did not notify his financial institution of his software to dissolve his enterprise, which was a breach of the regulation, the Insolvency Service mentioned.
“Administrators who abused the Covid-19 monetary assist schemes, which had been offered by the federal government to assist real companies in want of assist throughout the pandemic, have exploited taxpayers,” mentioned Peter Fulham, chief investigator of the Insolvency Service’s felony investigation group.
Learn extra: Covid mortgage abuse strike-offs double in a yr
“This sentence displays the completely dishonest conduct of Rajesh Vaghela and will function a warning to others who engaged on this behaviour that they’re vulnerable to felony prosecutions and will doubtlessly find yourself in jail.”
Vaghela was ordered to pay £2,150 in court docket prices. He had repaid the mortgage in full earlier than being sentenced.
The sentence follows six different felony prosecutions of firm administrators for Covid mortgage abuse by the Insolvency Service within the final yr, all of which resulted in convictions, together with one instant imprisonment.