Britain’s crime agency will investigate organised crime linked to the government’s bounce back loan scheme, launched to help businesses through the pandemic.
The bounce back loan scheme, which launched in May, allows SMEs to borrow up to a quarter of their annual turnover, capped at £50,000.
The scheme has proved the most popular form of loan after the Coronavirus Business Interruption Loan Scheme (CBILS) came under fire for not being accessible by some businesses.
But critics have warned that the bounce back loan scheme, which relies on self-certification to test eligibility, is open to fraud.
The National Crime Agency (NCA) has today said it will investigate serious and organised crime linked to the scheme after intelligence suggested it was being exploited, first reported by Reuters.
A spokesperson for the agency said: “On the basis of our assessments, we have provided red flag indicators to the banking sector to aid their detection of fraudulent applications.”
In July two men were arrested in North London in connection with fraudulent applications to the scheme. The police also obtained 10 account freezing orders over accounts which had funds in excess of £550,000.
The NCA said it would assist partner investigations and investigate cases itself where there is a serious and organised crime element.
This week it emerged that the state-owned British Business Bank issued formal objections to the bounce back loan and Future Fund schemes ahead of their launch.
In letters sent to business secretary Alok Sharma in May, the Bank’s chief executive Keith Morgan raised concerns with the scheme’s “very significant fraud and credit risks”.
He added that the Bank had commissioned a review of the scheme by accountant PwC, which had classified its fraud risk as “very high”.
The NCA was contacted for comment.