A judge has demanded an explanation for how a “ringleader” in an organised criminal gang who had 48 previous criminal convictions managed to obtain a £50,000 government Covid bounceback loan.
Judge Anthony Cross QC, sentencing six men at Manchester Crown Court for their part in a conspiracy to steal and export expensive cars, said on Thursday it “defies belief” that defendant Asif Hussain, 44, managed to apply successfully for the state-backed loan despite his lengthy criminal record.
The case underscores the extent to which organised criminal gangs have been able to exploit weaknesses in the UK government’s coronavirus bounceback loans scheme.
Official estimates suggest close to £5bn of the £47bn disbursed could be lost in fraud.
The scheme proved popular, with about a quarter of all UK companies applying, but has been criticised for its limited verification and lack of credit checks on borrowers, which the National Audit Office said in December “made it vulnerable to fraud and losses”.
The judge told prosecutors that he required an explanation from “the relevant body” within 14 days as to how the loan, as well as two other bounceback loans taken out by a fellow gang member, had been obtained. “Here the most basic of checks would have revealed the fraud,” he said.
Hussain played a leading role in an organised criminal gang in the north west of England that stole cars, such as Range Rovers and Porsches, stripping them down for parts or export for sale in the Middle East.
Many of the cars were stolen in “horrific” night-time burglaries from “terrified” victims’ homes before being supplied to the gang, Manchester Crown Court heard on Thursday.
Hussain, who lived in a large detached house in Stockport, Cheshire, pleaded guilty to four offences including conspiracy to steal and fraud on the bounceback loan.
He made a £50,000 written application for a loan in May 2020 and received the money to his bogus company just seven days later, the court heard.
Jailing Hussain for a total of 15 years, Judge Cross told him: “You have a bad record, including a sentence of four years for the supply of drugs. You have a total of 48 previous offences for dishonesty and other offences. That such a man as you was able to obtain a Covid loan defies belief.”
He added: “That a criminal such as you could obtain such a huge sum is staggering.”
Ibraaz Shafique, 23, from Oldham in Greater Manchester, was another of the six defendants sentenced in relation to the criminal conspiracy on Thursday. He received a five-year jail term after admitting five offences, including over two Covid bounceback loans he obtained worth £95,000.
Launched by Rishi Sunak, chancellor of the exchequer, in May 2020, the scheme was designed to provide up to £50,000 of cash to companies struggling during the pandemic.
After his sentencing on Thursday, Judge Cross told prosecutors that it was the second case within months he had dealt with where a criminal gang had been able to obtain “huge sums of money” from the bounceback loan scheme.
In November, the same judge demanded to know how a member of a Manchester drug gang had managed to obtain a £25,000 bounceback loan.
“The public are entitled to an explanation of how these loans were obtained. That explanation must be made public,” the judge said.
The Department for Business, Energy and Industrial Strategy (BEIS) said it was continuing to crack down on Covid-19 fraud. “We are working closely with lenders and enforcement authorities to minimise fraud and ensure those that have committed fraud face consequences,” it said.