First arrests for alleged fraud in the UK Covid support schemes

COVID19 fraud - arrests - Verificators

In the UK, six arrests have been made over alleged fraud in two government support schemes designed to help businesses hit by Covid-19.

HM Revenue and Customs (HMRC) said three men had been arrested on suspicion of fraud linked to the “eat out to help out” discount scheme, introduced in August by the chancellor, Rishi Sunak. HMRC officers arrested the men, aged 43, 48 and 37, on Tuesday at their London addresses on suspicion of cheating the public revenue and fraud by false representation.

Three people have also been arrested over alleged fraud linked to coronavirus bounce-back loans. They are accused of fraudulently obtaining £145,000 in government-backed loans.

It marks the first such arrests amid a crackdown on scams relating to government support schemes. The fear of widespread fraud increases.

The bounce-back loan scheme arrests are thought to mark the first of many after the National Audit Office warned last month that taxpayers could lose as much as £26bn from fraud, organised crime or default.

Increase of business frauds is a parallel consequence of an economic crisis. As in any crisis, financial criminals have been making the most of COVID-19 to profit for themselves, repurposing tried and tested fraud techniques to take advantage of this current situation. Some of the entrepreneurs try to rationalise their illegal act considering their personal gains via fraud are a ‘drop in the ocean’ or excusing their decision with the common struggle to survive the crisis.

The loans system was designed to support small and medium-sized businesses affected by the pandemic. They can borrow up to £50,000 and do not have to pay any fees or interest for the first year.b

- 05 November 2020 - EN, fraud investigation