Cheat used Covid cash to fund his Class A drug addiction

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After Minister Resigns Over Rampant Fraud, We Reveal More Lockdown Leeches

Bankruptcy: Louis Maxwell

I have been talking about Covid fraud for months now, both the Recovery Loan scheme to help businesses and the Kickstart Youth Employment scheme.

Both were, in theory, admirable schemes to help the economy survive the pandemic, but in practice they were so mismanaged that they turned out to be a con artist’s dream.

So I can see why Conservative peer Lord Agnew of Oulton resigned this week as minister responsible for fighting fraud.

He accused the Treasury of having “no knowledge or little interest in the consequences of fraud” and described the supervision of the loan scheme by the Department of Business, Energy and Industrial Strategy as “regrettable”.

You won’t find a more shocking example of this than Louis Maxwell, who raised £50,000 for his car salvage business in Newport, South Wales.

The Insolvency Service says: “Maxwell in fact spent around £22,000 to buy a new tow truck, but spent the rest on Class A drugs.

He then sold the new truck to finance his drug addiction as well. At the time he was serving time for driving offences, which meant that he was not allowed to drive.

Subsequently, it was declared bankrupt in August 2021, which triggered an investigation by the Bankruptcy Service.

Sue Tovey, lead investigator for the Insolvency Service, said: “Taxpayer money was made available to help genuine businesses get through the lockdown period and where there has been abuse we will not hesitate to take action.”

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The 35-year-old was bankrupt for six years and is awaiting trial on drug, driving and theft charges.

Jailed: Asif Hussain, left, and Ibraaz Shafique

Then there is the amazing case of asif hussainwho has just served 15 years in prison for leading a gang that exported stolen cars to the Middle East.

Manchester Crown Court heard that his company, German Automotive 365 Ltd, also secured a £50,000 recovery loan even though he was not registered for VAT and Hussain has 48 previous convictions.

Judge Anthony Cross QC told the 44-year-old from Bolton: “That a criminal like you can get such a large sum is astounding.”

Hussain’s accomplice, Ibraaz Shafique, who was jailed for five years for the car crimes, managed to obtain two Rebound Loans.

One was for £50,000 for his company Merc Car Breakers Ltd and the other was for £45,000 for himself as a sole trader, which was paid into a bank account opened only five days earlier.

The judge said the “most basic of checks” would have revealed the loan applications to be fraudulent.

These are far from isolated examples of milking the scheme, which offered companies cash up to 25% of turnover, up to £50,000.

Tuition company Scholars Academy Ltd of Brighouse, West Yorks claimed a turnover of £200,000 for £50,000.

In fact, his monthly income never exceeded £640, according to a report from the Insolvency Service.

One of the directors, Aamer Aslam, 39, has been banned from running companies for 11 years. Co-director Razwan Ashraf, 31, also ran a second education business, Progress First Limited.

The Insolvency Service says this fraudulently inflated his turnover too much to get a £50,000 loan.

Ashraf is banned from being a director for 10 years.

Other directors who exploited the scheme include Iain Flitcroft, 55, of Haywards Heath, West Sussex, who received an 11-year ban as a director for overstating the turnover of his property company Hangar 8 Pashley Limited.

Colin Williams of CW Beverages Limited of Bromsgrove, Worcs, was also handed an 11-year ban.

He received a £40,000 loan even though a simple check would have revealed that his company had never traded and his bank balance was £0.

Sukhdeep Singh of SKS Holdings Limited in Billericay, Essex received a nine-year ban, and Amman and Umaad Sultan and Asim Malik of Blue Line Cars (Ilford) Limited in East London received seven-year bans, as did Gabriel-Ioan Racolta of the Colchester construction company Gam Racolta Limited.

And these are just some of the cases this year: I exposed many others in 2021.

Coincidentally, this week I received a response from the Department of Business to my freedom of information request regarding Covid fraud statistics.

It said fraud protection checks had blocked the granting of 62,380 loans worth £2.2bn.

But he refused to give figures of the fraudulent loans that have been granted.

Parliament’s Public Accounts Committee estimates that up to 60% of the scheme’s loans, amounting to £27bn, may never be repaid.

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George Holan

George Holan is chief editor at Plainsmen Post and has articles published in many notable publications in the last decade.

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