Directors banned for £100k fraudulent bounce back loans

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January 24, 2022

Some interesting news this week, as two Yorkshire-based directors are in big trouble. They were caught after fraudulently claimed £100,000 in bounce back loans.
Aamer Aslam from Huddersfield has been handed a ban for 11 years. Razwan Ashraf from Keighley has been banned for for 10 years. They both they claimed bounce back loans (BBL).
The duo were co-directors of Scholars Academy Ltd, a specialist centre for children. In May 2020 Aslam applied for a bounce back loan by providing an estimated company turnover of £200,000.
Scholars received the loan of £50,000, then went into voluntary liquidation in January 2021. This triggered the investigation from the Insolvency Service. At the time of liquidation, the directors listed the company’s liabilities to the bank as £7,000. The bank later notified the liquidator that it was owed £50,000 by the company due to the bounce back loan.
The Insolvency Service investigation found that the duo was inflating the company’s turnover. They were showing a maximum monthly income of just £640. That means their turnover was only £7,680 and did not meet the criteria to apply for a bounce back loan.
It was also found that Aslam and Ashraf used the bounce back loan money to make monthly payments to four family members of Ashraf. All four received £2,000 a month after the duo received the loan money. Aslam and Ashraf told the Insolvency Service that that these payments were genuine business expenses. They were unable to provide evidence to support this.
Alongside this, Ashraf was also the sole director of another educational company, Progress First Ltd. In May 2020 he applied for a bounce back loan and fraudulently declared that annual turnover in 2019 was £200,000. Progress’ bank statements showed that turnover was £38,973.
Progress received the full loan of £50,000 when it would only have been entitled to a loan of £9,927.
As with Scholars, Ashraf claimed that the money was used to pay for company expenses. In reality, regular payments were made to three individuals. No evidence was produced to show that these payments were really business expenditures.
Ashraf has since repaid £35,000 to the liquidator to settle claims against him for the Progress loan. A further £25,000 in settlement of claims against both directors in relation to the loans taken out by Scholars.
Let’s just hope that it wasn’t their accountant that recommended they take these actions!

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