Director fraudulently claimed £100k in Covid loans

A Surrey company director who fraudulently moved £100,000 in Covid-19 loans through his family's bank accounts has avoided jail.

Muhammadh Chaudhry secured a £50,000 Bounce Back Loan for a media business in July 2020 and then fraudulently obtained another £50,000 loan for UK Media Kit Hire Ltd in September 2020, which he claimed was a film and TV production company.

The 41-year-old then transferred the funds through savings accounts held by close relatives, the Insolvency Service said.

At Guildford Crown Court on Wednesday, Chaudhry was sentenced to two years in prison, suspended for 22 months.

He was also banned from being a company director for seven-and-a-half years.

Chaudhry, who previously went by the name of Masood Jamati, first applied for a Bounce Back Loan at the start of July 2020, falsely claiming his annual turnover was £200,000 as a sole trader.

His second application in September 2020 came just four days after he changed his name from Masood Jamati to Muhammadh Chaudhry.

Chaudhry claimed that the turnover for UK Media Kit Hire was again £200,000, the smallest amount businesses could put down in order to receive the maximum £50,000 permitted under the scheme.

Insolvency Service investigators found no evidence that UK Media Kit Hire had ever traded.

Money from the loans was moved through his family's savings accounts before being paid back to him and his wife, and withdrawn in a series of cash and cheque transactions.

Bank analysis revealed that money in the account was also used for holidays to Pakistan.

Chaudhry, of Addlestone, repaid the UK Media Kit Hire loan back in full earlier this year.

He has also paid back £2,000 of the £50,000 from the second loan and agreed to repay the remaining balance.

UK Media Kit Hire was dissolved in January 2021.

Mark Stephens, chief investigator at the Insolvency Service, said Chaudhry "cynically invented" the turnover figure to secure Covid support for his business.

"These actions were clearly pre-planned and Chaudhry deliberately chose to take advantage of a taxpayer-backed scheme which was set up to support legitimate businesses during the pandemic," he said.

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