Three men have been arrested over a £6m Bounce Back Loan fraud probe after using ‘specialist knowledge’ to carry out a scam.
The three city workers are said to have made bogus claims for the loans designed for small businesses by using false data and documents.
The National Crime Agency (NCA) said all three men worked for the same London financial institution and are suspected of using their “specialist knowledge” to carry out the scam.
Two of the suspects, aged 30 and 31, were arrested at their office by members of the NCA’s Complex Financial Crime team, while the third, aged 30, was arrested at an address in Camden.
The bounce back loan scheme was introduced in May to give firms access to low-interest finance quickly. Companies can borrow between £2,000 and up to 25% of their turnover up to a maximum of £50,000.
The scheme has been open to abuse and there are fears many of the loans will never been repaid. It has also resulted in a boost for the car market as many company directors have used the cash to splash out on new cars.
Under the terms, the government guarantees 100 per cent of the loan and there are no fees or interest for the first 12 months, followed by an interest rate of 2.5 per cent a year after that.
The three suspects have been released while inquiries into the extent of the fraud and whether other people were involved continue.
Gary Cathcart, head of financial investigation at the NCA said: ‘Ensuring the integrity of the financial sector is a vital part of our work to tackle illicit finance.
‘Professional enablers who use their specialist knowledge to facilitate criminal activity represent a significant threat, and the NCA will continue to work closely with our partners to target anyone involved in fraud.’
Levels of fraud arising from taxpayer-backed Covid-19 loan schemes could be up to five times higher than those on other borrowing schemes, senior UK bankers warned MPs in December.
Executives at Lloyds and Santander told the Treasury Select Committee that around one per cent of bounce back loans may have been taken out fraudulently.
More than £43.5bn of bounce back loans had been approved as of mid-December, according to figures published on the government’s website. Huge numbers of car dealers took out the loans and used them to buy stock.