With the Insolvency Service now picking up Covid loan fraud cases, we ask observers what went wrong at the National Investigation Service
To visit the website of the National Investigation Service (Natis) was to be met with a string of scalps. Images of uniformed officers carrying out “raids” and “seizures” abounded – success stories, it said, from recouping cash unduly claimed during the Government’s £47 billion Covid Bounce Back loan scheme (BBLS). Yet, despite the stab-proof vests and its police.uk domain name, Natis was not in fact a police body, but a department made up mostly of council staff run out of the scandal-hit Thurrock council in Essex. In five years of pandemic loan recovery efforts, the department has secured just 14 convictions, yet cost the taxpayer £38.5 million.
Last month, the Department for Business and Trade (DBT) announced that the unit was being scrapped, and that remaining “viable” cases were being handed over to the central government-run Insolvency Service. This move “will ensure lost funds from Covid-era fraud are recovered more quickly and effectively”, according to Gareth Thomas, the business and trade minister.
But just last week, the situation got worse. It has been mooted that due to poorly managed administration and insufficient training, most Natis investigators had not been granted state-recognised investigative powers. The upshot of this revelation is that many hundreds of Natis cases – some finished and some still in the system – are ripe for a legal challenge.
It’s the latest in a long list of setbacks in Natis’s short and colourful history, which began in the chaotic first months of the Covid pandemic when the Bounce Back loan scheme took shape.
Easy-to-access cash
In April 2020, small and medium-sized business owners were offered the chance to secure loans of up to £50,000. The idea was to stave off pandemic-induced decline, and provide a lifeline for otherwise flagging firms; funds typically hit applicants’ accounts in a matter of hours. The Government guaranteed the loans (meaning taxpayers would pick up the bill for those who defaulted, or for businesses that shuttered), with no fees or interest to pay for the first 12 months.
This easy-to-access cash inevitably caught the eye of opportunists. Loans were applied for in others’ names; individuals over-egged their turnover in order to boost borrowing power, while others used the free-flowing cash to plug personal payments. A Times investigation showed that this taxpayer-funded loot had been splashed on cars and watches, gambling sprees and home improvements. Suitcases of money doled out by the scheme were seized by airport border officials, according to a Home Office source. --->READ MORE HERE
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| Credit: Ben Montgomery/Getty |
The Government has spent £30m in an effort to recover money stolen from the Treasury during the pandemic
An investigation into £160 million of Covid loan fraud cases has secured just 12 convictions since the pandemic and will never recover its costs, The Telegraph can reveal.
The Government has spent £30 million on an investigation service run by Thurrock council, which was put in charge of recovering money stolen from the Treasury by organised criminals during the pandemic.
The £47 billion “bounceback” loan scheme resulted in widespread fraud because few checks were imposed on the money lent to supposedly failing businesses.
Many fraudsters pocketed the money and closed their operations down before using the proceeds to fund organised crime, parliamentary auditors have since found.
The rollout of the scheme has been criticised for its high rates of fraud, prompting the government to contract out its high-value investigations to the National Investigation Service (Natis).
Ministers have since given the team another £45 million to continue its investigations for another three years in an effort to clear the backlog of 147 cases it is already investigating.
But data obtained by The Telegraph shows just 12 people have been convicted since 2020 – recovering just £21 million in fraudulent loans.
Of the 290 cases investigated by the Natis so far, only 29 were passed to the Crown Prosecution Service (CPS). The remainder were dropped due to a lack of evidence. --->READ MORE HEREFollow links below to relevant/related stories and resources:
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