Two businesses wound up for fraudulent claims
Local Authorities across the country have distributed vital grant support funding during the Pandemic, which has proven to be a lifeline for many businesses who have financially struggled as a result of trading restrictions.
However, fraudsters often target the vulnerable during times of economic hardship. The Covid 19 Pandemic has created new ways of living and working within society, and in turn has created new opportunities for criminals to exploit businesses.
Whilst many businesses applied for the support that they were eligible to receive, it was identified that two separate companies, LV Distributions Ltd and SIO Traders Ltd, had submitted false documents to at least 41 local authorities and the Government’s Bounce Back Loan scheme to secure £230,000 worth of grants, put in place to support businesses during the pandemic.
Herefordshire Council was targeted on two occasions by SIO Traders. The Council initially paid £10,000 after SIO Traders’ first fraudulent application, but the counter fraud team was able to act quickly and decisively to recover the funds in full, before rejecting a second £10,000 application and reporting the company’s activities.
The Council also received a further £10,000 application from LV Distributions, which was also rejected, saving the local authority a total of £30,000 in fraudulent grant claims.
LV Distributions Ltd and SIO Traders Ltd were wound-up in the High Court in separate hearings on 27 July 2021, following confidential enquiries conducted by the Insolvency Service, which proved neither company had ever traded.
Jonathan Nelson, Counter Fraud Officer at Herefordshire Council said:
“Fraud is never a victimless crime, and every pound that is criminally obtained is a pound that cannot be spent where it is needed. It is shameful that these two companies have sought to exploit funding that was intended to support our local businesses during the Pandemic. The Council has shown through its actions that it takes these matters very seriously and that we have a zero tolerance approach to fraud”.
Cllr Liz Harvey, Cabinet member for finance, corporate services and planning, added:
“We have spent more than a year allocating millions of pounds of financial support for local businesses who have been affected by the pandemic. To see companies trying to take advantage of this difficult and unprecedented situation, and fraudulently claim support that is intended to help those who really need it, is despicable. Herefordshire Council will not tolerate fraud, and it is pleasing to see these two companies wound up.”
For more information on financial support available, please visit the Talk Community website.