Birmingham fraudster secured Covid support for company which never traded
He also misused all the funds he fraudulently applied for
- Faruk Chowdhury fraudulently claimed his Learn & Earn Ltd company had a turnover of £150,000 when applying for £37,500 in Covid support, despite having no genuine trading activity
- He transferred the Bounce Back Loan money to his personal bank accounts within days and used the money to pay off his own debts
- The 45-year-old was handed a suspended sentence, with the Insolvency Service now working to recover the fraudulently obtained funds
A Birmingham director has been sentenced after fraudulently inflating his company’s turnover to secure Covid support which he used to pay off his personal debts.
Faruk Chowdhury falsely claimed his company had a turnover of £150,000 and that the Bounce Back Loan would be used for legitimate business purposes.
Chowdhury’s company, Learn & Earn Ltd, showed no genuine trading activity before or after receiving the £35,000 Bounce Back Loan and £2,500 top-up in late 2020 and early 2021.
The 45-year-old, of Churchill Road, Birmingham, was sentenced to 22 months in prison, suspended for two years, at Birmingham Crown Court on Tuesday 28 July.
He was also ordered to complete 250 hours of unpaid work.
David Snasdell, Chief Investigator at the Insolvency Service, said:
Faruk Chowdhury cynically exploited a government scheme designed to support legitimate businesses through an unprecedented crisis. He made false declarations about his company’s turnover and business activities, knowing full well that the funds would be used to settle his personal debts rather than support any genuine trading.
Bounce Back Loans were a vital lifeline for small businesses during the pandemic, and those who abused the scheme undermined public confidence in government support.
The Insolvency Service remains committed to investigating and prosecuting those who fraudulently obtained the loans, and work to recover the stolen funds.
Chowdhury was the sole director of Learn & Earn Ltd, which was established in February 2020, just weeks before the pandemic began. The company described its trading on Companies House as “repair of computers and peripheral equipment”.
In December 2020, Chowdhury secured the £35,000 Bounce Back Loan from a bank, fraudulently claiming his business had a turnover of £150,000 and that the funds would be used wholly for business purposes.
Within days of receiving the loan, he transferred £25,000 to his personal bank account, with the remaining £10,000 following in early January 2021.
Chowdhury obtained a £2,500 top-up to the loan in February 2021, providing the same turnover figure of £150,000 and again falsely declaring the money would be used for business purposes.
The £2,500 was transferred to his personal account within days.
Chowdhury claimed in interviews that the company had generated income and that he had used the funds to purchase computer equipment and pay himself as the sole employee.
He alleged his business had been impacted by the pandemic and that he needed the loans to obtain premises and consolidate his personal debts due to a poor credit rating.
However, banking records showed no genuine trading activity, no payments to any computer supplier, and the company never filed accounts or submitted tax returns.
Learn & Earn Ltd entered liquidation in April 2021 and Chowdhury was disqualified as a director for nine years in January 2022 as a result of his misconduct at the company.
The Insolvency Service is seeking to recover the fraudulently obtained funds under the Proceeds of Crime Act 2002.
Further information
- Faruk Chowdhury is of Churchill Road, Birmingham. His date of birth is 24 May 1981
- Learn & Earn Ltd (company number 12486292)
- Read more about the Bounce Back Loan Scheme and the action the Insolvency Service can take if it finds misconduct
- Individuals subject to a disqualification order or undertaking are bound by a range of restrictions
- Directors can find information about their obligations and responsibilities at the Insolvency Service’s Director Information Hub
- Further information about the work of the Insolvency Service, and how to complain about financial misconduct.