Inflating Turnover To Obtain A Bounce Back Loan Can Result In A Criminal Record 

Inflating turnover to obtain a bounce back loan can result in a criminal record. It seems Adam Lennard of East London recently discovered this reality.

In a report issued by the Insolvency Service on 9 February 2024 Adam Lennard received an eight months prison sentence, albeit suspended for fifteen months.

Not only that the Insolvency Service reported that Mr Lennard was ordered to pay half of the bounce back loan of £20,000 within seven days of the court hearing after using the funds for personal and family purposes according to the investigator, Julie Barnes at the Insolvency Service. 

Plainly you cannot write off a bounce back loan and certainly not when there has been a fraud.

Although the press release from the Insolvency Service seeks to reassure the public with the statement:

The Insolvency Service will not hesitate to prosecute cases like this…

it is perhaps notable this appears to have been a case in which the bringing of a prosecution followed an admission by Mr Lennard after being interviewed:

During interviews with the Insolvency Service, he admitted to using the loan for his personal use, transferring the money to his own bank account between August and November 2020.

What about cases in which admission is not a feature?

If one reviews the director disqualification outcomes published by the Insolvency Service then the apparent consistency with which inflated turnover goes hand in hand with improper personal use (as required to be used for business economic benefit) of the bounce back loan scheme support may make one wonder how it is there seem to have been relatively few prosecutions considering the number of bounce back loans taken out.

There were around 1.5 million bounce back loans taken out according to the 3 December 2021 National Audit Office Report. 

In the Department for Business & Trade’s transparency data for performance as at 31 July 2022  (updated 28 November 2023) lenders had suggested out of the then £46.6 billion lent through the bounce back loan scheme, £1.1 billion was suspected as fraud.

A staggering 13,000 businesses may have obtained more than one bounce back loan according to the Brititsh Business Bank’s letter dated 27 January 2022 to the Public Accounts Committee when only one per business was permitted.

One may be left wondering how it is that in the year 2022/2023 there appear to have been 69 people prosecuted by the Insolvency Service across all matters, not merely Covid finance related. Does it merit the question: Why was the number not higher?