The director of a Slough construction company that filed accounts just once has been jailed over a series of fraudulent bounce back loans after business went bust owing HMRC £300,000
Arti Deda, 31, from Slough, has been jailed for two and a half years at Reading Crown Court after fraudulently obtaining two separate Covid loans worth £50,000 each. He was sentenced for fraud, and failing to keep accounting records, having only filed accounts once in 2018.
He was accepted for two Covid loans before deciding to liquidate the company owing HMRC over £300,000.
Deda secured the loans for his company, Knights Workers Limited, by overstating turnover. However, the funds were transferred from the company bank accounts to third parties, and associates of Deda as the sole director.
Knights Workers was incorporated in 2017 with a SIC code of construction and claimed to build houses, however, Insolvency Service investigators found ‘minimal evidence of any trading in the construction industry’.
The only accounts the business ever filed were in 2019 for year end 2018 showing that there were four employees at the business.
To avoid repaying the loans, Deda put Knights Workers into the hands of the liquidator in November 2021 and it was dissolved in April 2023.
The liquidated business still owes £100,000 in unpaid bounce back loans with £50,286 to HSBC and £50,000 to Starling Bank.
Deda also failed to pay a tax bill totalling £303,827 with HMRC named as an unsecured claimant for the unpaid PAYE and employee NICs, and penalties.
Deda claimed on the two separate bounce back applications that Knights Workers had a turnover of £390,000 and £495,000 respectively in 2019 but did not notify each bank that a separate application had been submitted to the other. The company was not even registered for VAT, another red flag.
In total, £44,500 was transferred to associates of Deda days after the money was received, with £13,000 also going to a third party. There was also a £20,000 transfer referenced ‘material’.
As well as being jailed, the Insolvency Service is attempting to recover the funds under the Proceeds of Crime Act 2002.
David Snasdell, chief investigator at the Insolvency Service, said: ‘This significant jail term and director disqualification reflects the seriousness of Covid-related fraud.
‘Bounce back loans were designed to support small and medium-sized businesses through the pandemic. Taxpayers’ money should not have been used for personal purposes by company directors.
‘The Insolvency Service is committed to investigating these crimes, which have a substantial impact on the public purse, and prosecuting those responsible.’
Deda was also banned from acting as a company director for 10 years.
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Peninsula Team, Peninsula Team
(Last updated )
Peninsula Team, Peninsula Team
(Last updated )
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