UK to set up new authority to ‘chase’ fraud

Britain’s Chancellor of the Exchequer Rishi Sunak (Photo by TOLGA AKMEN/AFP via Getty Images)

By: Chandrashekar Bhat

Britain said on Wednesday (27) it will put in place a new authority to crack down on financial fraud as Chancellor of the Exchequer Rishi Sunak admitted government pandemic aid schemes had been abused.

The announcement comes amid a series of reports that economic criminals exploited the government’s low-interest loan scheme at the height of Covid-19 and even tried to smuggle money out from the United Kingdom.

While a third of the £47billion bounce-back loan scheme, aimed at providing businesses with access to cash, is unlikely to be recovered, more than 10% of the total amount is believed to be lost due to fraud.

“We will prosecute fraudsters who defraud the taxpayer,” Sunak said as he described the operation of the new Public Sector Fraud Authority, which will be operational by “July of this year”.

He said the anti-fraud team, backed by £25million in funding, will have experts in data analysis and economic crime investigators to recover money ‘stolen from support schemes’ Covid”.

It will spot suspicious businesses and individuals seeking state contracts, the government said, adding that fraud experts will also hold mandatory inspections of Whitehall’s programs to uncover vulnerabilities.

Although there are several instances of misuse of loans, The temperature said border control officials have foiled numerous attempts to smuggle money out of the country.

“Border Force officials have arrested people at airports across Britain carrying large sums of money suspected of coronavirus repayment loans,” the newspaper said, citing a Home Office source.

Investigations are ongoing.

While the purpose of the rebound loan program was to support businesses at risk of collapsing amid the pandemic, the report says some recipients even splurged on gambling, cars and watches.

Businesses could borrow up to 25% of their annual turnover, subject to the 50,000 limit, some people offered inflated figures to fraudulently secure the maximum amount. In a few cases, non-existent entities have also applied for loans.

The temperature An investigation has revealed that a gambler used a £50,000 loan to fund poker games after claiming his company made £200,000, despite only having £2.72 in his account.

In another case, a sandwich seller received a loan of £35,000 but spent the money on his garden, the game and a new business which collapsed within months.

There are also cases of corporate directors diverting loans to their personal accounts, running counter to government objectives.

Experts attribute the abuse of the scheme to the lack of due diligence on the part of the authorities when granting loans.

Sunak said: “People are rightly furious that fraudsters have taken advantage of our vital Covid support programs, and we are acting to ensure they pay the price.”

Comments are closed.