COVID-19 Fraud
An important part of the Government’s strategy to tackle the effects of the Covid 19 Pandemic was to provide vast economic support to businesses. This was mainly achieved through the three Covid loan schemes, ‘Bounce Back’, ‘CBILS’ and ‘CLBILS’, a scheme for larger loans.
Nearly £80bn was distributed to businesses with ‘Bounce Back’ distributing £47bn to 1.6 million recipients, who were able to borrow up to £50,000 each.
Fraud losses are now estimated at £3.5bn by accountants PwC which has been hired by the Government.
It is claimed that HMRC has, so far, only recovered 0.4% of estimated irregular payments.
Official Comments
A government spokesperson said:
‘We’re continuing to crack down on Covid support scheme fraud and will not tolerate those who seek to defraud consumers and taxpayers.
We wholly support the Insolvency Service in penalising those who sought to defraud the scheme for their own financial gain.
Many people work hard to pay their taxes, so it’s a gross injustice that fraudsters are shamefully taking advantage of measures set up to help people during the lockdown.
We cannot let criminals profit from the COVID crisis, as every pound stolen by fraudsters could be invested in our vital public services.’
The country will now undoubtedly see a rise in recovery cases being conducted by HMRC, of both a civil and criminal nature.
Amandeep Murria of Kangs Solicitors outlines legislation available to HMRC when pursuing those suspected of COVID-19 Fraud and the penalties which may be passed upon those convicted of an offence.
Kangs Solicitors has been successfully defending clients charged with alleged financial misconduct for over 25 years and is rated as one of the best criminal law firms in the country, being top ranked in the leading legal directories, The Legal 500 and Chambers and Partners.
Kangs Solicitors won The Legal 500 award for ‘Criminal & Fraud Law Firm of the Year’ and the firm’s founding solicitor, Hamraj Kang, won The Legal 500 award for ‘Individual Criminal & Fraud Solicitor of the Year’.
We are here to assist clients with any financial criminal investigation or prosecution whether it is being conducted by the police or another investigating authority.
For an initial no obligation discussion, please contact our team at any of the offices detailed
below:
London
Birmingham
Manchester
24 Hours number
Relevant Law | Kangs HMRC Investigations Solicitors
In pursuing actions arising from COVID 19 Fraud, HMRC will implement, inter alia, sections 1 and 2 of the Fraud Act 2006 and various sections of Proceeds of Crime Act 2002. (‘POCA’)
The Fraud Act 2006 states:
‘1 Fraud
(1) A person is guilty of fraud if he is in breach of any of the sections listed in subsection (2) (which provide for different ways of committing the offence).
(2) The sections are—
(a) section 2 (fraud by false representation),
(b) section 3 (fraud by failing to disclose information), and
(c) section 4 (fraud by abuse of position).
2 Fraud by false representation
(1) A person is in breach of this section if he—
(a) dishonestly makes a false representation, and
(b) intends, by making the representation—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.
(2) A representation is false if—
(a) it is untrue or misleading, and
(b) the person making it knows that it is, or might be, untrue or misleading.
(3) “Representation” means any representation as to fact or law, including a representation as to the state of mind of—
(a) the person making the representation, or
(b) any other person.
(4) A representation may be express or implied.
(5) For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).’
The Proceeds of Crime Act 2002 (‘POCA’) states at the following sections:
‘Section 327 Concealing etc
(1) A person commits an offence if he—
(a) conceals criminal property;
(b) disguises criminal property;
(c) converts criminal property;
(d) transfers criminal property;
(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.
(2) But a person does not commit such an offence if—
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct. ’
Section 328 Arrangements
(1) A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.
(2) But a person does not commit such an offence if—
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.’
Section 329 Acquisition, use and possession
(1) A person commits an offence if he—
(a) acquires criminal property;
(b) uses criminal property;
(c) has possession of criminal property.
(2) But a person does not commit such an offence if—
(a) he makes an authorised disclosure under section 338 and (if the disclosure is made before he does the act mentioned in subsection (1)) he has the appropriate consent;
(b) he intended to make such a disclosure but had a reasonable excuse for not doing so;
(c) he acquired or used or had possession of the property for adequate consideration;
(d) the act he does is done in carrying out a function he has relating to the enforcement of any provision of this Act or of any other enactment relating to criminal conduct or benefit from criminal conduct.’
Penalties Upon Conviction | Kangs POCA Defence Solicitors
Prosecutions for offences under Sections 1 and 2 Fraud Act 2002 may be conducted either in a Magistrates’ Court or a Crown Court.
Conviction may result in the following penalties:
Before:
- a Magistrates’ Court:
a maximum sentence of six months imprisonment, a fine to the statutory maximum, or both.
- a Crown Court:
a fine, imprisonment for a term not exceeding ten years or both.
Prosecutions for offences under Sections 327, 328 and 329 of POCA may be conducted either in a Magistrates’ Court or a Crown Court.
Conviction may result in the following penalties:
Before:
- a Magistrates’ Court:
a maximum sentence of six months imprisonment, a fine to the statutory maximum, or both.
- a Crown Court:
a fine, imprisonment for a period ranging between two and thirteen years or both.
How Can We Help? | Kangs Fraud Offences Defence Solicitors
If you are concerned about any aspects of potential Covid Loan fraud, money laundering or other financial criminal investigation, it is essential to seek immediate expert advice.
We can explain your rights to you and provide you with guidance on any likely future action.
On a daily basis we:
- advise clients who anticipate that they may be arrested or invited to attend voluntary interviews with HMRC or any other enforcement agency,
advise clients generally in all matters concerning allegations of Fraud and Money laundering criminal activity,- represent clients at interviews under caution conducted by any of the law enforcement agencies,
- discuss with law enforcement agencies whether or not there is any potential mitigation available to avoid prosecution or court trial,
- provide representation before all criminal courts,
- identify and instruct suitable leading barristers, including Kings Counsel.
Who Can I Contact For Help? | Kangs National Criminal Defence Solicitors
Our expert criminal defence team is here to assist you and is available 24/7 on telephone number 07989 521 210.
Hamraj Kang leads the award-winning team of lawyers nationally recognised for its excellence and expertise in the area of financial misconduct defence work.
If we can be of assistance, our Team is available via telephone 0333 370 4333 and by email info@kangssolicitors.co.uk.
We provide initial no obligation discussion at our three offices in London, Birmingham and Manchester.
Alternatively, discussions can be held virtually through live conferencing or telephone.
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