Construction Director Jailed for Fraudulently Securing Two Maximum Covid Loans
A company director from Berkshire has been sentenced to prison after fraudulently obtaining two Covid Bounce Back Loans for his construction firm, despite businesses being eligible for only one.
Arti Deda, 31, exaggerated the turnover of his company, Knight Workers Limited, to secure two loans of £50,000 each from separate banks in July 2020. He falsely declared annual turnovers of £390,000 and £495,000 for 2019 and claimed that his second application was his only one.
Rather than using the funds to support his business, as required under the scheme, Deda transferred substantial amounts to associates and third parties. Just days after receiving the money, he sent £44,500 to an associate, followed by a £13,000 transfer to another individual and a further £20,000 withdrawal labelled “material.”
Investigations by the Insolvency Service revealed that Knight Workers Limited, incorporated in December 2017, had little evidence of genuine trading in the construction sector. In an attempt to evade repayment, Deda applied to liquidate the company in November 2021. The firm was eventually dissolved in April 2023, with no loan repayments made.
On February 5, at Reading Crown Court, Deda was sentenced to two-and-a-half years in prison. He was also banned from serving as a company director for ten years. Additionally, he failed to fulfill his legal obligations by not providing accounting records to the liquidator upon request.
David Snasdell, Chief Investigator at the Insolvency Service, emphasised the severity of Covid-related fraud, stating:
“This significant jail term and director disqualification reflects the seriousness of Covid-related fraud. Bounce Back Loans were designed to support small and medium-sized businesses through the pandemic. Taxpayers’ money should not have been used for personal purposes by company directors. The Insolvency Service is committed to investigating these crimes, which have a substantial impact on the public purse, and prosecuting those responsible.”
The Insolvency Service is now pursuing recovery of the fraudulently obtained funds under the Proceeds of Crime Act 2002.