In November 2023’s Autumn Statement, the government announced…
Salih Ozhot from North London has been given a suspended prison sentence of 2 years for applying for a Bounce Back loan in 2020 for his business but then using the funds personally. He is also required to repay the £50,000 he borrowed in full at the rate of £500 per month.
Insolvency Service Investigators found that Mr Ozhot had withdrawn £19,000 within one week of receiving the loan. Their analysis of subsequent transactions showed that he used the money for personal rather than business reasons. Mr Ozhot was declared bankrupt in October 2021.
The Insolvency Service described Mr Ozhot’s actions as “cynical,” “sophisticated,” and “pre-planned.” He is now barred from acting as a company director without permission from a court.
Bounce Back Loans were government guaranteed loans made available to support businesses during COVID-19. However, the Department for Business has come under criticism for being too lax with the application process and HMRC has estimated that the total amount of error and fraud across all COVID-19 support schemes could be as much as £5bn. The government has subsequently launched pilot programs to try and detect potential fraud.