Whether you are an individual or business, Coronavirus will have impacted you like the rest of the world and the UK Government quickly rushed in various financial schemes to protect both individuals and businesses during the pandemic.
The current figures for Government backed lending schemes, such as the Coronavirus Business Interruption Loan Scheme and the Bounce Back Loan Scheme, as well as the Coronavirus Job Retention Scheme are in excess of £100 billion.
The schemes are essential for businesses that have financially struggled due to the pandemic and all the Government schemes have been extremely successful in terms of uptake.
With so much money being allocated to these schemes, and the relative ease in which applications can be made, it is not surprising that many individuals and businesses have misused them and are now attracting Organised Crime Groups.
It has been reported that many applications under the Government backed lending schemes have been made by dormant companies or where accounts have been falsified, and the monies used by individuals to fund their luxury lifestyle. Furthermore, it is not unusual to hear that claims for Furlough are being made, with staff still continuing to work, claims being made for staff that no longer work for the employer and claims being made for Furlough and not being passed on by the employer.
Since the very first reported arrest of a man from the West Midlands in July 2020, there has been a flurry of investigations, culminating in both individuals being arrested and/or asset recovery proceedings being commenced against them and/or the businesses.
There are a number of options that can be deployed by the authorities when investigating, prosecuting or attempting to recover the payments made.
During any investigation, criminal or civil, either by HMRC or the Police, and where assets, especially monies from the fraud are in an identifiable bank account, an application for a Restraint Order and/or Account Freezing Order may be made. The aim of these Orders is to preserve and stop the dissipation of the assets.
Once these orders are granted, anyone that disobeys them will be carrying out further offences.
Fraud by False Representation is the most obvious offence that will be committed. This would include making false representations, knowing that it is or might be untrue or misleading in order to make a gain for themselves or another or to cause a loss to another.
False Accounting, is another obvious offence that will be committed in order to carry out fraud the Government Coronavirus schemes, especially applications under the Coronavirus Business Interruption Loan Scheme. This would include falsifying any account, record or document made or required for any accounting purpose with a view to gain for themselves or another, or to cause a loss to another.
It must be noted, that although it will be very likely that anyone defrauding the Government Coronavirus schemes will face criminal investigations and/or prosecutions, Under Part 5 of the Proceeds of Crime Act 2002, there are other avenues available for HMRC and/or the Police to recover assets of any person that they think holds property which is, or represents, property obtained through unlawful conduct.
For agencies such as HMRC and the Police, Civil Recovery of assets is a very attractive alternative to seeking a conviction at great expense to the much depleted public purse. Furthermore, proceedings under Part 5 allow property that is not in the possession of the individual carrying out the unlawful act, to be recovered. This would include family, friends, associates who can all be involved in the proceedings.
It is vital to obtain clear, concise and proactive advice at the onset of any investigation, and often it is the most important part of any case. Decisions made or not made at this stage can have consequences throughout your case. Often, and especially with proceedings under Civil Recovery, strict time limits apply.
We at DBT & Partners have the right team for you and with our vast experience in representing, individuals, businesses/corporates and third parties within these types of matters, we are the specialists for you.