NRI businessman jailed over Covid loan fraud
Los Angeles, April 28, 2023
NRIpress.club/Ramesh/ A.Gary Singh
NRI businessman has been sentenced to six months in prison suspended for 18 months after admitting to misusing an interest-free loan the UK government is providing to help cope with the Covid lockdown -19 had offered .
Rajesh Dhirajlal Vaghela, 46, from Stanmore, who was given a £25,000 loan to avoid taxpayer loan repayment before his shop closed, has pleaded guilty to fraud by abusing the bounce-back loan scheme.
He was caught out by new powers granted to the Bankruptcy Service in December 2021, allowing it to investigate directors of defunct companies suspected of going out of business to avoid paying back Covid-19 support loans.
Vaghela, who was a director of RKV Consultancy Ltd, which had acted as a consultancy from Stanmore since its inception in March 2019, applied to his bank for a £25,000 bounce-back loan on behalf of the consultancy in May 2020.
The loan was paid into the company’s bank account, but within a week of receiving the money, Vaghela filed paperwork with Companies House to wind up the company and later transferred all of the loan money to personal bank accounts.
Investigators found that Vaghela had failed to notify his bank of his request to wind up the consultancy – a breach of the law.
“Directors who have abused the Covid-19 financial support programs provided by the government to support real businesses in need of assistance during the pandemic have exploited taxpayers,” Peter Fulham, chief investigator for the Bankruptcy Service’s criminal investigation team, said in a statement .
“This verdict reflects the thoroughly dishonest behavior of Rajesh Vaghela and should serve as a warning to others who have engaged in this behavior that they could face criminal prosecution and possible jail time,” Fulham added.
Vaghela pleaded guilty to charges under the Companies Act 2006 and the Fraud Act 2006 in Willesden Magistrates Court in February 2023 and was convicted by His Honor Judge Donne KC at Harrow Crown Court on 13 April 2023.
He was also ordered to pay £2,150 in court costs and had repaid the loan in full before his sentencing.