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Action Against Companies Fraudulently Claiming COVID Support

The Insolvency Service has taken firm action against two companies that fraudulently applied for thousands of pounds worth of COVID support loans, and the businesses have now been shut down.  The two separate companies submitted false documents to at least 41 local authorities and the Government’s Bounce Back Loan scheme to secure £230,000 worth of grants put in place to support businesses during the pandemic.

LV Distributions Ltd and SIO Traders Ltd were wound-up in the High Court in separate hearings on 27 July 2021 following confidential enquiries conducted by the Insolvency Service, which proved neither company ever traded.

Here at IWORK we have long been aware of fraudulent COVID-related claims.  We have seen some individuals openly stating what they are doing, and deliberately taunting the many who were excluded from the government’s COVID support measures, so we are very pleased to see some justice.

SIO Traders claimed they supplied PPE and secured £95,000 worth of business grants from 10 local authorities. The company also received a £50,000 Bounce Back Loan they were not entitled to.

LV Distributions had registered their offices in Redhill, Surrey, and claimed to sell medical care products. Similar to SIO Traders, in a 10-day period between 17 and 27 August 2020, LV Distributions provided false lease documents and utility bills to 27 local authorities.  The company fraudulently secured £35,000 in business grants from 2 local authorities, as well as a £50,000 Bounce Back Loan. Investigators, however, uncovered that the premises LV Distributions falsely claimed to operate from were either unoccupied, up for rent or occupied by a different company.

It is inevitable that there will be more cases brought against companies that have fraudulently claimed COVID support, and we hope to see some criminal proceedings as well corporate insolvencies.

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