A fraudster who bought a three-bedroom home with the help of Covid loans has been jailed.
Mohammed Rashidzadeh secured a £50,000 Bounce Back Loan for his business, Cozy Bed Ltd, in June of 2020.
The loan scheme, introduced by the Government in 2020, allowed small and medium-sized businesses affected by Covid-19 to borrow up to £50,000 at a low interest rate.
Within days of receiving the money however, Rashidzadeh contacted solicitors to handle the purchase of a semi-detached home in Huddersfield for £116,000.
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He transferred the entire loan amount from the company account into his own personal bank account by the end of the month.
The money was then passed to solicitors as part of the house purchase.
Just eight days after receiving the loan, the fraudster applied to close Cozy Bed Ltd down by having it struck-off the Companies House register without informing the bank that lent him the money of his intentions.
The 34-year-old, now of Caellepa in Bangor, north Wales, was found guilty of offences under the Fraud Act and Companies Act following a four-day trial at Leeds Crown Court earlier this year.
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He was sentenced to 18 months in prison on Thursday, September 25.
Mark Stephens, Chief Investigator at the Insolvency Service, said: "Mohammed Rashidzadeh’s offending was twofold and deeply cynical.
"He immediately misused the £50,000 Bounce Back Loan funds he obtained to buy himself a house instead of supporting his business through the pandemic.
"His second offence was equally calculated – attempting to dissolve his company without properly notifying his creditors, including the bank who had provided the loan.
Bounce Back Loans were introduced by the Government in 2020 to help businesses affected by Covid-19
|GETTY/MIKE KEMP
"The strike-off process exists to protect creditors’ interests, and deliberately concealing such applications from lenders is a criminal offence that undermines the entire corporate framework.
"The Insolvency Service remains committed to taking robust action against Bounce Back Loan fraudsters.
"Government-backed schemes were a lifeline for legitimate businesses during an unprecedented crisis, and we will continue to pursue those who deliberately exploited this support at the taxpayers’ expense."
Cozy Bed Ltd was established in March 2019 as an online bed retailer, with Rashidzadeh as its sole director.
When he applied for the Bounce Back loan, Rashidzadeh declared the business had a turnover of £203,000.
The company was officially dissolved in October, 2020.
No repayments were ever made on the loan, though the The Insolvency Service is seeking to recover the fraudulently obtained funds.
Rashidzadeh sold the house in Huddersfield in August of 2021.
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