Fraud chiefs warn Rishi Sunak of risks of millions of pounds being stolen from state covid loans due to lack of transparency | London Evening Standard


Ritain’s leading anti-fraud organizations have accused the government of leaving taxpayers exposed to millions of pounds of potential theft under its coronavirus loan schemes because it has never published a list of those who have received the money.

Chancellor Rishi Sunak has issued nearly £35billion in taxpayer-backed loans to help 830,000 small businesses through the covid crisis.

Many received meager checks on businesses and individuals asking for the money. Fraud fighters fear that much of it is being stolen by criminals via bogus companies.

In a joint letter to Sunak, the Fraud Advisory Panel, Spotlight on Corruption and Transparency International urged the Treasury to publish the names of all recipients, as it has done in the past, such as with the nearly 40,000 grants granted under Innovate UK. scheme.

Only by releasing the details of the loans will corporate investigators and the public be able to track down and expose questionable companies and directors, the letter says.

“The lack of transparency provides an opportunity to defraud the UK,” he says.

“Publishing the information will help deter and detect crime by enabling the public and businesses to check the creditworthiness of customers and suppliers.

“Law enforcement and credit reference agencies will also be able to perform searches and data matching to identify crimes using established techniques used by the National Fraud Initiative.”

The NFI is a government exercise that matches databases between the public and private sectors to spot fraud in benefits, subsidies and other areas.

The letter warns that the 750,000 loans made under the bounce-back loans program for smaller businesses are particularly vulnerable because applicants have effectively certified themselves and received the money within 24 hours.

If the details were published on a central publicly accessible list, it would be easy to cross-reference them to other databases such as Companies House to check for suspicious activity ahead of loan applications. These could be inactive companies suddenly coming into existence or new directors being appointed.

Signatories to the letter, including former Serious Fraud Office director Rosalind Wright and white-collar criminologist Professor Mike Levi, are particularly concerned about the likelihood of fraudsters colluding with rogue bank insiders and lawyers to obtain loans for criminal enterprises or those which the administrators knew were not viable before the crisis.

They also fear that the UK will see a repeat of the subprime mortgage scandal where loans have been secured against commercial properties the value of which had been fraudulently inflated, or that organized crime groups will follow recent actions taken by Italian mafia groups to infiltrate or intimidate good UK struggling businesses to access loans and steal money.

The Fraud Advisory Panel is a charitable organization that serves as a conduit for intelligence sharing between industries and law enforcement. Its chairman, former National Fraud Intelligence Bureau director David Clarke, said: “I am very surprised to see this lack of transparency as they have been doling out taxpayers’ money.”

Some have argued that anonymity is important to protect the reputation of struggling companies, but others say it can restore a company’s reputation and improve its credit rating.

A Treasury spokesman said: “Our support programs have helped provide a lifeline to businesses of all sizes across the UK, protecting millions of jobs and ensuring they survive. to the outbreak, and we have focused our efforts on securing support for those in need in a timely, fair and transparent manner, including publishing recipients of the Corporate Covid Financing Facility.

“We have been clear that loans must be repaid and banks are taking appropriate precautions against fraud, including customer checks and transaction monitoring. Any fraudulent request may be prosecuted.

“The government expects everyone to act responsibly and within the spirit of the package, and only request and use support as intended.”


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