Construction directors banned and tagged for abusing covid loan scheme

Two construction businessmen have been banned from running a company for a total of 16 years after breaching the rules of a covid loan scheme.

One was also given a two-year suspended sentence with a four-month electronically tagged curfew.

Ivan Hristov Fratev, 57, from London, was the sole director of Chingford-based BI&F Ltd, a firm that traded as a construction, security and extermination business from premises in Alpha Road.

In May 2020 he applied for £50,000 under the Bounce Back Loan Scheme, which was established to help businesses keep afloat through the pandemic.

Bounce Back Loans allowed a business to borrow between £2,000 and up to 25% of the company turnover in the calendar year 2019, with a maximum loan of £50,000.

Within two weeks of the money arriving in the company bank account, Fratev applied to dissolve BI&F Ltd, without informing the bank that had loaned him the money. Failure to notify creditors of plans to strike off a company is a criminal offence.

Fratev was caught through powers granted to the Insolvency Service in December 2021, which allow it to investigate directors of dissolved companies who are suspected of closing their business to avoid repaying Covid-19 support loans.

At Snaresbrook Crown Court on 23 June 2023, Fratev was given a two-year suspended sentence and a four-month electronically tagged curfew between 7pm and 7am for dissolving his business after taking out the loan. He is also subject to a six-year disqualification from being a company director.

The judge also included 15 days’ rehabilitation activity requirement as part of his suspended sentence.

Chief investigator of the criminal investigation team at the Insolvency Service, Peter Fulham, said: “Covid-19 financial support schemes were funded from the public purse to support genuine businesses during the pandemic. Directors who abused the scheme have exploited taxpayers.

“This two-year suspended prison sentence, along with a curfew order and a six-year disqualification, reflects the thoroughly dishonest conduct of Ivan Fratev and should serve as a warning to others who engaged in such behaviour.

“The Insolvency Service will act to remove directors who abused Bounce Back Loans from the business arena.”

The other disqualified construction director is Ryan William Moir, 34, from East Sussex. He was sole director of East Sussex-based Croxton Group Ltd, which traded as a builder from Green Street industrial estate in Eastbourne.

Moir applied for the maximum £50,000 Bounce Back Loan on behalf of his company in May 2020. He stated on the application that Croxton Group Ltd’s turnover the previous year had been £250,000.

When the company went into liquidation in May 2022, it owed around £184,500, including more than £49,400 towards the Bounce Back Loan.

An investigation by the Insolvency Service showed that the company’s 2019 turnover had in fact been less than £21,000. That meant Croxton Group Ltd had received almost 10 times more than it was entitled to under the rules of the scheme.

The company’s liquidators are taking action to recover the money.

Moir was banned from being a company director for 10 years, beginning on 19 July 2023.

Another director from a print business operating in London was also disqualified for 10 years as part of the investigation by the Insolvency Service into companies that abused the Bounce Back Loan scheme.