The Government’s tough stance of Covid Bounce Back Loan (BBL)* fraud continues
In a recent case, a former joiner from Romford has been sentenced for Covid Bounce Back Loan fraud (BBL)*, demonstrating the seriousness with which the Insolvency Service addresses such misconduct.
Details of this Case
Charles Ling, aged 57, of Havering-atte-Bower, Essex, who operated Bradcon (Bespoke) Joinery Ltd, was convicted at Snaresbrook Crown Court on 2 April 2025 for fraud by false representation. Ling applied for a second Bounce Back Loan of £30,000 in June 2020, despite already having received a valid £20,000 loan for his business in May 2020. The investigation revealed that Ling falsely declared the second loan as his first and misused £11,500 for personal expenses, including cash withdrawals and a mortgage payment.
Bradcon (Bespoke) Joinery Ltd entered Creditors Voluntary Liquidation in 2021, with the appointment of Liquidators triggering the Insolvency Service’s investigation into the misuse of BBL funds.
Sentencing and repayment
The Court handed Ling a 15-month suspended sentence, required him to complete 100 hours of unpaid work, and also sough confirmation that the loan had been fully repaid during the investigation.
A Warning from the Insolvency Service
David Snasdell, Chief Investigator at the Insolvency Service, emphasised:
“Covid Bounce Back Loans were vital to supporting businesses during the pandemic. Misusing these funds not only breaches the law but also undermines public trust in such schemes. The Insolvency Service remains committed to pursuing fraudulent activity.”
The scale of Bounce Back Loan fraud
The Insolvency Service has been actively investigating directors who abused the Bounce Back Loan Scheme. In the 2024-25 period alone, over 1,000 directors were disqualified, with 736 cases specifically related to Covid loan abuse. The average length of disqualification was eight years. Additionally, 87 bankruptcy restriction orders were issued for similar misconduct. These figures highlight the robust measures in place to deter and penalise fraudulent activity.
The first director to receive a custodial sentence for Bounce Back Loan fraud was Abdulrazag Zagroba, who was sentenced to 24 months in prison in June 2022. Zagroba, the sole director of Amigo Pizza (Manchester) Limited, misused a £20,000 loan for personal expenses, including sending cash abroad and purchasing a car.
Antony Batty, Insolvency Practitioner, described this case as a milestone, stating:
“This case represented a milestone and was a long time in coming. There have been, and will continue to be, many more. It also shows the powers that the Insolvency Service has at its disposal.”
The Government recognises that some companies who took out BBLs might not survive but expect such companies to be formally Liquidated, and an investigation to be conducted by the liquidator – a Licensed Insolvency Practitioner – into the use of the BBL, or indeed any pandemic financial support scheme.
The vast majority of BBLs were used to support businesses through the Pandemic and were used, as permitted, to pay rent, staff costs and overheads. However, we have come across numerous examples of possible abuse, for example:
- using the BBL to repay or make loans, from/to Directors or Shareholders;
- to repay more expensive loans/finance agreements;
- or to purchase cars and even jacuzzies!
If directors are to avoid director disqualification and/or prosecution for any such Bounce Back Loan fraud, they need to take formal advice, which will normally require the repayment of the BBL on terms to be agreed. We would strongly advise directors in such a position not to ‘put their heads in the sand’ but to seek advice early and to try to deal with the situation in an open and transparent way.
Antony Batty continues:
“In this case a suspended custodial sentence was handed down even though the full £30,000 was repaid and the amount misappropriated was only a relatively minor £11,500, which demonstrates that the Courts are getting tougher on Bounce Back Loan fraud. Many directors have avoided custodial sentences for more severe transgressions of BBL rules, with director disqualification the most common punishment.”
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*About the Bounce Back Loan Scheme
The Bounce Back Loan Scheme was introduced to provide crucial financial support to businesses impacted by the Covid-19 pandemic. Loans were capped at £50,000 and required repayment over six to 10 years. Misuse of funds can lead to investigations, even if a company has dissolved.
