Three men working for a financial institution have been arrested in the United Kingdom as part of a probe into suspected fraudulent claims totalling £6million made through the Covid-19 Bounce Back Loan Scheme (BBLS)
The National Crime Agency (NCA) believes fraudulent claims were made through the use of false data and documents. It said “professional enablers” using their specialist knowledge to aid fraudsters are a “significant threat”. Enquiries are ongoing and no charges have been reported as this stage.
The arrests come as the Mail on Sunday newspaper reports that lenders are beginning to claw back money from business accounts where it has been claimed fraudulently. Several major banks, including HSBC, Barclays, NatWest and Lloyds Banking Group have reportedly begun freezing business accounts linked to Covid-19 fraud.
The BBLS is designed to provide financial support to businesses that are losing revenue or are having cashflow difficulties due to the Covid-19 outbreak.
Under the scheme, accredited lenders can provide a six-year term loan from £2,000 up to 25% of a business’ turnover up to a maximum of £50,000. Crucially, lenders are given a government-backed guarantee against the outstanding balance, de-risking the scheme for banks.
In October, a National Audit Office probe concluded that up to £26 billion of BBLS loans may not be repaid because of fraud and defaults. The scheme has since been extended until 31 March.
FinCrime Report in December highlighted increased money laundering risk due to illegally acquired Covid-19 relief funds being brought back into the financial system as a key trend to watch out for in 2021.