First Bounce Back Loan Criminal Conviction

On Friday 24 June 2022, The Insolvency Service obtained their first criminal prosecution for Bounce Back Loan fraud against Mr Abdulrazag Zagroba.

Mr Zagroba incorporated a Company called Amigo Pizza (Manchester) Limited in the months leading up to the Coronavirus pandemic. In June 2020, Mr Zagroba applied to Companies House to dissolve the company, under Section 1003 of the Companies Act 2006.

Shortly thereafter he applied for a £20,000 Bounce Back Loan. Despite the fact that the terms of the Bounce Back Loan were that it was to be used strictly for the purpose of company business, Mr Zagroba used the funds to purchase a car for himself and to send the balance to his family, who were living abroad at the time.

Due to the strike off application, the Company was dissolved before the first repayment in respect of the Bounce Back Loan fell due.

Mr Zagroba was sentence to two years in prison and was disqualified from acting as a director for seven years, having pleaded guilty under Section 2 of the Fraud Act 2006 and Section 1007 of the Companies Act 2006.

As referred to in previous blogs, the Insolvency Service now has more powers at its disposal to take action against directors, including investigating directors of dissolved companies, as opposed to those that have been placed into Liquidation.

If you wish to discuss anything in this article, are concerned about your own affairs, or that of your business or company, please contact Chris Parkman of Purnells on 01325 340579 or at chris@purnells.co.uk