UK man jailed after using COVID loan for gambling and crypto

Haralambos Ioannou, a 49-year-old from Cow Lane, Edlesborough, Buckinghamshire, received a 22-month suspended sentence for spending a Covid loan on crypto and gambling. Ioannou also spent another £50,000 of illegally obtained Covid Bounce Back loan funds on payments to his ex-wife and cash withdrawals.  

The Insolvency Service confirmed on October 9 that the glazing firm’s boss had fraudulently applied for a second Bounce Back loan, bringing Opti-Bond (GB) Ltd’s total loan to £100K. According to the agency, Ioannou spent the first £50K loan properly on his glass-fitting business but squandered large amounts of the second loan on personal expenditures. 

The Southwark Crown Court also ordered the 49-year-old Ioannou, previously of South London, to pay £40K (~$53.2K) in restitution and work 150 hours without pay. Ioannou was also suspended from his position as a director for a period of five years. David Snasdell, Chief Investigator at the Insolvency Service, said the sole Opti-Bond (GB) Ltd director had no business spending on things that had nothing to do with his glazing firm.

Ioannou transfers nearly £20K to his personal account

Ioannou received £100,000 within eight days between late June and early July 2020 after making two separate £50,000 loan applications. He submitted the first application in May 2020, stating a £216,000 turnover for 2019. He then submitted a second application, stating a turnover of £236,000 for 2019. 

Haralambos Ioannou made almost 38 transactions, transferring £20,000 to his personal account. During the same period, Ioannou paid approximately £25,000 to gambling sites from his personal account and used an additional £8,000 to expand his cryptocurrency portfolio, alongside other investments. Ioannou also withdrew nearly £6,000 through ATMs and transferred another £16,000 to his ex-wife’s account. 

Snasdell condemned Ioannou for fraudulently applying for a second Bounce Back loan and exploiting a government-backed scheme that was a lifeline for many businesses during the pandemic. Every company was only entitled to one such loan.  

“He not only fraudulently applied for a second loan but then spent it on activities which had nothing to do with his company’s operations such as gambling, crypto-investments, cash withdrawals and payments to his then partner.” 

–David Snasdell, Chief Investigator at the Insolvency Service 

Snasdell warned that the agency is committed to strongly punishing those who exploit government-backed schemes for personal gain. He said the agency will continue to go after all those who deliberately abused the Covid-19 support at the expense of British taxpayers. 

The Insolvency Service insists Bounce Back loans must be repaid 

The Insolvency Service emphasized that all money lent to companies during the COVID-19 pandemic must be repaid within six to ten years. The repayments were supposed to start 12 months after the companies received the loans. 

The agency also warns that companies that fail to repay the Bounce Back loans will be investigated, even after they have been dissolved. If any misconduct is discovered, action may be taken against the company or its representatives. The loans were made on the condition that they were not to be spent for personal use. 

The agency disclosed that it will investigate misconduct, including falsifying loan application information and dissolving businesses to avoid loan repayments. It will also investigate whether other Covid-19-era assistance, such as the Eat Out to Help Out and Job Retention schemes, were used correctly.

The Insolvency Service has clarified that companies breaching any government-backed schemes will either be wound up by the court or be required to compensate their creditors. Company directors will also be disqualified for varied periods depending on the specific cases. 

The agency revealed that two separate companies that submitted falsified documents to the government’s Bounce Back loan scheme were wound up by the court. Both companies secured around £230,000 worth of funding, including Bounce Back loans of £100,000. The investigation showed that the false documents were also submitted to 41 other local authorities.

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