A consultancy boss has been convicted after claiming a £25,000 bounce back loan before closing the business in an attempt to avoid repayment
Rajesh Dhirajal Vaghela, who was a director of RKV Consultancy Ltd, which had traded as a consulting firm from Stanmore since its incorporation in March 2019, applied for a £25,000 bounce-back loan in May 2020.
The loan was paid into the company’s bank account but within a week of receiving the money, Vaghela filed paperwork with Companies House to have the business dissolved and later transferred all the loan money to personal bank accounts.
After the company was dissolved in October 2020, the Insolvency Service and cross-government counter-fraud systems identified its closure as probable bounce-back loan fraud.
Investigators found that Vaghela had not informed his bank of his application to dissolve the consultancy, which is a breach of the law.
He pleaded guilty to charges under the Companies Act 2006 and Fraud Act 2006 at Willesden Magistrates Court in February 2023 and was sentenced on 13 April 2023 at Harrow Crown Court.
He was sentenced to six months in prison, suspended for 18 months, after pleading guilty to fraud by abusing the bounce back loan scheme.
Vaghela was also ordered to pay £2150 court costs. He had repaid the loan in full before being sentenced.
The sentence follows six other criminal prosecutions of company directors for Covid loan abuse by the Insolvency Service in the last year, all of which resulted in convictions, including one immediate imprisonment.
Peter Fulham, chief investigator of the Insolvency Service’s Criminal Investigation Team, said: ‘Directors who abused the Covid-19 financial support schemes, which were provided by the government to support genuine businesses in need of help during the pandemic, have exploited taxpayers.
‘This sentence reflects the thoroughly dishonest conduct of Rajesh Vaghela and should serve as a warning to others who engaged in this behaviour that they are at risk of criminal prosecutions and could potentially end up in prison.’
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