An increase in post-Covid-19 fraud checks by the Insolvency Service has seen the number of company directors convicted of fraud spike, according to new research.
The number of directors convicted of criminal activity has increased to 122 in the year to the end of September, a 205 per cent hike on 2020 levels.
Mazars, the advisory firm which conducted the research, said that the number of Government schemes created at the beginning of the pandemic and the volume of demand “forced banks to dilute their normal due diligence procedures.”
That left the schemes open to fraud.
A National Audit Office report has estimated that as many as half of all bounce-back loan claims could be either fraudulent or defaulted on.
Just last week it was confirmed that the Government had hired Quantexa, a British start-up, to attempt to root out fraud in the schemes and protect the taxpayer purse. The firm uses artificial intelligence to spot unusual claim patterns.
Mazars’ Michael Pallott, the firm’s restructuring partner, said “given the state of public finances, it is in everyone’s interests to have an effective enforcement scheme to make an example out of dishonest business owners. Directors who have committed Covid related fraud need to take serious notice of these trends.”