The phone company boss fraudulently obtained Covid “Bounce Bank” loans
Zahid Afzal of Albert Street, Haverfordwest, Pembrokeshire has been ordered to pay back nearly £200,000(Image: PA)
The owner of mobile phone shops who fraudulently pocketed £150,000 in loans designed to help businesses hit by the Covid pandemic has been ordered to pay back his ill-gotten gains. Zahid Afzal initially made legitimate applications for “Bounce Bank” loans but then used his knowledge of the process to fiddle the system and acquire three more loans he was not entitled to.
The 37-year-old was handed a suspended prison sentence at Swansea Crown Court last June but has now been ordered to pay almost £200,000 in proceeds of crime payments in the next three months or face two years in prison.
So far the defendant – who operated phone stores or kiosks in Carmarthen, Shropshire, Hampshire, and Devon – has only paid back £2,722 in the more than five years since he took out the fraudulent loans. Don’t miss a court report by signing up to our crime newsletter here.
The Insolvency Service said tackling Bounce Back loan fraud was a “key priority” and that it was determined criminals such as the defendant “are not allowed to benefit financially from their greed during the pandemic.”
At the original sentencing hearing the court was told that the UK government established “Bounce Back” loans to help small and medium businesses during the coronavirus pandemic, and that the scheme allowed companies to borrow between £2,000 and £50,000 at a low interest rate.
The court heard Afzal made two legitimate applications for his companies Phones Onn and Phone Bits Ltd to HSBC and NatWest respectively, and that the applications were successful. The defendant subsequently made three more applications to Lloyds, Starling, and Metro Bank during 2020 for the same phone companies and in each case falsely declared there had been no previous applications for those firms while also inflating the turnover figures of the firms in order to access the maximum loan amounts.
The court heard that once the loans were paid to the defendant’s companies, significant amounts of money were subsequently transferred out of the business accounts into Afzal’s personal accounts.
Zahid Afzal, of Albert Street, Haverfordwest, Pembrokeshire, was sentenced to two years in prison suspended for two years and was ordered to complete 300 hours of unpaid work after pleading guilty to three counts of fraud by false representation.
At the sentencing hearing Jon Tarrant, for Afzal, said the defendant employed eight people, and said six of those needed the employment to maintain their UK visas. He said the father-of-three was a successful businessman who had established himself in a positive light to many people but that position “has now been reversed”.
Following the sentencing last year, a proceeds of crime investigation was launched into the defendant’s finances.
At this week’s hearing the defendant was ordered to pay £197,306 within three months or face two years in prison. The confiscation figure covers the three £50,000 Bounce Back loans Afzal secured, plus indexation to account for the change in the value of money since 2020.
The court heard that in the five years since Afzal took out the fraudulent loans he had only paid back a total of £2,722.
Speaking after the confiscation order was made Alexander Grierson, head of asset recovery at the Insolvency Service, said: “When Zahid Afzal stood up in court and admitted he still had the fraudulently obtained Bounce Back loan funds, he made our job of recovering them far easier.
“Afzal deliberately abused the Bounce Back loan scheme by applying for loans he knew he was not entitled to and which were not for business use. Tackling Bounce Back loan fraud remains a key priority for the Insolvency Service and we are determined criminals such as Afzal are not allowed to benefit financially from their greed during the pandemic.”
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