Three directors banned for Bounce Back Loan abuse
Three company directors have been banned for 30 years after it was found that they abused the government-backed Bounce Back Loan scheme during the Covid-19 pandemic.
Mathius Thompson, Moira Wood and Ioan Adrian Mociar received nearly £120,000 between them as part of the scheme launched by the government to keep businesses afloat during the pandemic.
Under the rules of the scheme, companies could apply for loans of up to 25 per cent of their 2019 turnover, up to a maximum of £50,000.
Thompson received the maximum loan of £50,000 in May 2020 for his used car dealership. However, the business went into liquidation in August 2021 owing £53,500. Investigators later discovered that the company’s turnover had just been over £2,500 in 2019, with no trading activity on record for the year. This meant that the business had not been entitled to a loan.
Wood, who was the sole director of her own IT consultancy received a £24,000 Bounce Back Loan. However, investigators discovered that she had transferred £23,400 to herself just before the company went into liquidation with debts amounting to £55,800.
Meanwhile, Mociar, who ran Midi Construction, applied for a £41,000 loan. After the company went into liquidation with debts of around £46,000 and triggered an investigation, it was found that the company received nearly £30,000 more than it was entitled to under the rules of the scheme.
Mociar, Wood and Thompson were banned for 11, eight and 11 years, respectively, which means they cannot directly or indirectly become involved in the promotion, formation or management of a company.
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“The Bounce Back Loan scheme was designed to support businesses in genuine need,” said Tom Phillips, assistant director of company investigations at the Insolvency Service. “These three company directors abused taxpayers’ money to either apply for loans to which they weren’t entitled, or by failing to show that the money they claimed had been used to support their companies.”
When the scheme was launched, the National Audit Office had warned that there was a very high level risk of fraud among borrowers, which could result in government losses of between £15bn and £26bn.
Since then, a number of directors have been banned for various reasons including providing misleading information and breaching the loans’ conditions by not spending them on legitimate business costs.
Read more: Bounce back loan fraud could cost government up to £26bn
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