Another interesting summary in the Times reporting on the staggering levels of fraud committed against the UK taxpayer during the pandemic. Whilst the Insolvency Service are clearly doing their best to hold fraudsters to account through disqualification orders and similar punitive measures, it appears that we are no closer to a financial recovery of any meaningful value, or at the very least imposing real financial pain on those who took advantage of the country’s generosity in the face of the unprecedented challenges of the Covid pandemic. 

The insolvency industry with its highly effective recovery powers is uniquely placed to assist the authorities in investigating and pursuing bad or fraudulent Covid debt. With the average quantum of each individual instance of fraud likely to be somewhere between £30,000 and £50,000 as far as bounce back loans are concerned, commerciality will be a key challenge in securing a financial return, however, this cannot and should not be the sole performance indicator in this instance. The sheer levels of fraud and shamelessness of those who obtained undeserved funding mean that simply the act of pursuit (and not just being allowed to “get away with it”) will carry substantial value, not just in terms of morality but in terms of supporting the UK’s insolvency industry which, even more so in current times, often acts as the last defence of good corporate conduct and ethics. By supporting that industry through collaboration and sharing of the workload, the enforcing agencies will effectively allow the monstrous amounts of dissipated Covid support funds to act as fuel for an industry that polices and combats fraud at a broad level where authorities sometimes struggle.

Through a collaborative approach and by sharing key data, those red flags which were missed at the outset can be applied in retrospect (such as the age of applicant companies, lack of available or overstated financials, attempts at dissolution, repeated use of suspicious registered office addresses), with a view to identifying common themes and ultimately bundling offending cases into manageable portfolios that may allow practitioners to commence steps towards a potential financial recovery. And when cash is leaving the UK by the suitcase, it certainly seems that time is of the essence.