Monday, June 24, 2024

Jailed restaurant owner to pay more than £36,000 following Covid Bounce Back Loan fraud

The former owner of a Derbyshire curry house who was sent to prison for Covid fraud has been ordered to repay more than £36,000.

Syed Hussain was jailed for 18 months and banned as a company director for three years in August 2023 after admitting charges of fraud by false representation and an offence under the Companies Act.

Hussain fraudulently secured a £50,000 Bounce Back Loan in May 2020 while serving a suspended sentence for breaching fire safety regulations at the former Moja Indian restaurant in Matlock.

The 24-year-old then dissolved his Magic of Spice Ltd company on the same day the funds appeared in his bank account.

Hussain, of Provident Street, Derby, was ordered to pay £36,200 during a confiscation hearing at Derby Crown Court on Friday 17 May.

Mark Stephens, Chief Investigator at the Insolvency Service, said: “Syed Hussain’s cynical actions in exploiting a taxpayer-backed scheme introduced at a time of national emergency were completely unacceptable.

“His behaviour in failing to notify the bank when he was applying to have his company struck off the register was equally calculated and pre-planned.

“The Insolvency Service will not tolerate deliberate abuse of the public purse which is why Hussain now faces a financial penalty to go with the time he has spent behind bars.”

Hussain applied for the maximum permitted £50,000 loan in May 2020, claiming on the application form that the turnover of Magic of Spice was £200,000. He later said putting this figure down was a mistake.

Hussain said that he had decided to close down the company based on Dale Road in Matlock when he made the application as it had been struggling for the previous year.

The loan application was made by Hussain when he was only months into a suspended sentence for breaching fire safety regulations at his restaurant.

Hussain transferred £30,000 of the loan to two family members who used the money for their own personal spending.

A further £10,000 was used for personal expenses such as hotels and car hire. No evidence was provided to the Insolvency Service of the money being used for business purposes.

Hussain also made no repayments to the loan despite this being a condition of the scheme.

Derby Crown Court gave Hussain three months to pay the money or face an additional 18 months in prison. Hussain would still owe the full amount ordered in the event he fails to comply and is returned to prison.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.









Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.

Close