Insolvency Service disqualifies 450 directors over Covid fraud schemes

Over 450 directors have been disqualified by the Insolvency Service in 2022-23 for abusing the Covid-19 financial support scheme, as the agency continues to clamp down on pandemic fraudsters.

Figures published today also show that directors guilty of misconduct are being hit with longer disqualification periods. The average length of bans handed out to directors in the last year was seven years and four months, up from five years and ten months.

Of the total 932 director disqualifications obtained by the Insolvency Service, 459 were cases involving Covid-19 financial support scheme abuse.

In addition to its civil enforcement action, the Insolvency Service also brought criminal prosecutions against six directors in 2022-23 for Covid-19 related misconduct. All of the prosecutions resulted in a conviction and resulted in immediate imprisonment in one case.

Dave Magrath, director of investigation and enforcement at the Insolvency Service, said: “These fraudsters are just the latest to find out that we will not hesitate to take firm action where we uncover such abuse, and this can ultimately result in a jail sentence.

“The purpose of the Bounce Back Loan scheme was to support businesses during the pandemic, but it is clear a minority of company directors chose to maliciously abuse the scheme and defraud the taxpayer. Our team of experts continue to work round-the-clock to bring these criminals to justice.”