Ivan Hristov Fratev, 57 and Bradley Malone, 57, both from London, and Ryan William Moir, 34, from East Sussex, have been banned from running businesses for a total of 26 years, after each separately claimed £50,000 for their companies in breach of the loan scheme's rules.
Fratev was also given a 2-year suspended sentence with 4 months' electronically tagged curfew, at Snaresbrook Crown Court on 23 June 2023, in addition to a 6-year ban, for dissolving his business after taking out the loan. The judge also included 15 days rehabilitation activity requirement (RAR) as part of his suspended sentence.
Fratev was the sole director of Chingford-based BI&F Ltd, which traded as a construction, security and extermination business from premises in Alpha Road. In May 2020 he applied for the maximum £50,000 Bounce Back Loan, designed to help businesses keep afloat through the pandemic.
But within two weeks of the money arriving in the company bank account, Fratev applied to dissolve BI&F Ltd, without informing the bank that had loaned him the money. Failure to notify creditors of plans to strike off a company is a criminal offence.
He was caught through powers granted to the Insolvency Service in December 2021, which allow it to investigate directors of dissolved companies who are suspected of closing their business to avoid repaying Covid-19 support loans.
Peter Fulham, Chief Investigator of the Criminal Investigation Team at the Insolvency Service said:
Covid-19 financial support schemes were funded from the public purse to support genuine businesses during the pandemic. Directors who abused the scheme have exploited taxpayers.
This two-year suspended prison sentence, along with a curfew order and a 6-year disqualification, reflects the thoroughly dishonest conduct of Ivan Fratev and should serve as a warning to others who engaged in such behaviour.
"The Insolvency Service will act to remove directors who abused Bounce Back Loans from the business arena."
In another case in London, Bradley Malone, the sole director of ONENETPRINT Ltd, a print business trading from Palmers Road in East London, applied for the maximum £50,000 Bounce Back Loan in June 2020, stating that his company's previous year's turnover was £200,000.
The Bounce Back Loan scheme allowed a business to borrow between £2,000 and up to 25% of the company turnover in calendar year 2019, with a maximum loan of £50,000.
The company went into liquidation in February 2022 owing the full amount of the loan, which triggered an investigation by the Insolvency Service.
Malone told investigators that, during the application process, he had merely clicked 'next' on his phone, and the money arrived within the hour. But investigators discovered that Malone had in fact overstated the company's turnover for 2019 in the application, to claim the maximum £50,000 loan.
They found that the company's actual turnover for that year had been around £90,200, meaning ONENETPRINT Ltd had received around £27,400 more than it was entitled to, under the rules of the scheme.
In a third case, Ryan Moir, sole director of East Sussex-based Croxton Group Ltd, which traded as a builder from Green Street industrial estate in Eastbourne, applied for the maximum £50,000 Bounce Back Loan on behalf of his company in May 2020. He stated on the application that Croxton Group Ltd's turnover the previous year had been £250,000.
When the company went into liquidation in May 2022, it owed around £184,500, including more than £49,400 towards the Bounce Back Loan. An investigation by the Insolvency Service showed that the company's 2019 turnover had in fact been less than £21,000, meaning that Croxton Group Ltd had received almost 10 times more than it had been entitled to under the rules of the scheme.
The company's liquidators are taking action to recover the money.
Malone and Moir were both banned from being company directors for 10 years, after the Secretary of State for Business and Trade accepted disqualification undertakings from each director. Malone's ban began on 17 July 2023, and Moir's began on 19 July 2023. Fratev's court-ordered 6-year disqualification started on 23 June 2023.
The bans prevent the former directors from becoming involved in the promotion, formation or management of a company, without the permission of the court. In addition to his ban and two-year suspended sentence, Fratev is also subject to 4 months' electronically monitored curfew between 7pm and 7am, and was ordered to pay court costs of £500.
Background
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Ivan Hristov Fratev is of London. His date of birth is September 1965.
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BI&F UK Limited (Company number 12150010) Incorporated in August 2019.
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Ryan William Moir is of Heathfield. His date of birth is May 1989.
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Croxton Group Ltd (Company number 10775998) Incorporated in May 2017.
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Bradley Malone is of London. His date of birth is March 1966.
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ONENETPRINT Ltd (Company number 07987005) Incorporated in March 2012.
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Bounce Back Loans were a government scheme in which active businesses impacted by the pandemic could take out interest-free, taxpayer-backed loans of up to £50,000. Loans were for the economic support of the business.
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The Rating (Coronavirus) and Directors Disqualification (Dissolved Companies) Act, which became law in December 2021, extended the Insolvency Service's investigatory powers, on behalf of the Business Secretary, to directors of dissolved companies.
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Persons subject to a disqualification order are bound by a range of restrictions.
