Police have been told to investigate Covid loan fraud only when there is evidence of links to organised crime.
Up to a third of the £45 billion lent through the bounce back loan scheme (BBLS) for small businesses, which can borrow up to £50,000, is thought to have been subject to fraud. Loans are guaranteed by taxpayers.
Private Eye reported that Angela McLaren of City of London Police had written to forces to say that officers should be called in only on cases that “involve clear links to serious organised crime and core policing business”. The letter said that “policing will not routinely investigate or prioritise public sector fraud investigation [that is, Covid fraud] at the expense of core business”.
It said that responsibility for managing fraud originating from the public sector rested with the Cabinet Office, which could refer cases to the National Investigation Service. This is leading the law enforcement response to BBLS fraud.
About ten experts are said to have been seconded to the business department to look at “serious and organised crime threats” linked to the loan schemes. Few of them are police officers.
The National Audit Office has said that the BBLS has lent more than expected. Launched in May last year, it was expected that between £18 billion and £26 billion would be borrowed. The watchdog has said that the government now faces a loss of between £15 billion and £26 billion from businesses being unable to repay the loans and through fraud.
Loans under BBLS were designed to be handed out quickly to small businesses. The swift application process and limited customer checks have made the scheme vulnerable to fraudsters.
Arrests have been made over BBLS fraud allegations. Last week, two people who used the identities of eight people to obtain loans were jailed. The Metropolitan Police said loans worth £297,000 were obtained by the pair, with a further sum stopped by the banks.
The National Crime Agency said it had “provided red flag indicators to the banking sector to aid their detection of fraudulent applications”.
Police told not to focus on upto £15M of Covid-19 bounce back loans fraud