A Yorkshire-based director whose companies provided services to construction projects has been disqualified for 11 years, after attempting to defraud the Bounce Back Loan Scheme.
Stephen Burke, 63, from Rotherham, overstated the turnover of his companies to secure £200,000 in taxpayer-funded loans to which he was not entitled during the pandemic, the Insolvency Service said.
Burke was the director of four companies that provided services to construction projects – including Yorkshire Plant Hire and Sales Ltd, Yorkshire Site Preparation Ltd, Woodhouse Civil Engineering Ltd and Richmond Brokers Ltd.
One of the four companies, Yorkshire Site Preparation Ltd, was listed as dormant in Companies House records by January 2020. Of the other three, company accounts ending January 2020 indicated turnover ranging from just £635 to £3,400.
However, Burke, who was the sole director of each company by 2020, claimed in his application for Bounce Back Loans that turnover for each company was between £200,000 and £320,000, allowing him to secure four separate loans for the full £50,000 permitted under the scheme.
He spent £174,000 repaying a personal loan to his former partner, which was a breach of the loans’ conditions that could only be used for legitimate business expenditure.
In February 2021, Burke sought to dissolve all four companies, but the dissolution was blocked when the outstanding loans were identified. The companies were instead placed in liquidation. Liquidators have now begun recovery action.
The secretary of state for business, energy and industrial strategy accepted a disqualification undertaking, which will see Burke banned for 11 years from directly, or indirectly, becoming involved in the promotion, formation or management of a company without the permission of the court.
Construction News understands that Burke may also face a separate criminal prosecution as a result of his actions.
Insolvency Service chief investigator Rob Clarke described Burke’s abuse of the scheme as “abhorrent”.
“Coronavirus support schemes were introduced to help British businesses through the most testing of times, providing them with the financial support to protect jobs and return to prosperity,” he said.
“Stephen Burke not only sought to defraud the Bounce Back Loan Scheme for personal gain, but then sought to cover his tracks by dissolving the companies he’d used.
“This abhorrent conduct has rightly resulted in a lengthy ban, removing his ability to trade, with the benefit of limited liability until 2033,” added Clarke.
In June, two Devon-based directors were disqualified for 11 years, after applying for £100,000 in loans during the pandemic, despite their company, Ace Building and Maintenance Services, being insolvent and unable to pay its debts.
The Bounce Back Loan Scheme was introduced by the government in 2020, after the economy took a hit during the pandemic. It was meant to help smaller business borrow between £2,000 and £50,000 at a low interest rate to tide them over the period.
Lenders have identified about 18,000 loans under the scheme as “suspected fraud”, according to government figures. A total of just over 1.5m loans were issued during the pandemic with an overall value of £47bn.