Director moved £100k of fraudulent Covid loans through family bank accounts

A company director moved £100,000 in fraudulent Covid loans through family bank accounts

Muhammadh Chaudhry, who previously went by the name of Masood Jamati, secured a £50,000 Bounce Back Loan for a media business in July 2020.

The 41-year-old then fraudulently obtained another £50,000 loan for UK Media Kit Hire Ltd in September 2020, which he claimed was a film and TV production company.

Money from the two loans was transferred through savings accounts held by close relatives. Chaudhry, of Scotland Bridge Road, Addlestone, was sentenced to two years in prison, suspended for 22 months, at Guildford Crown Court on Wednesday 11 December.

He was also banned as a company director for seven-and-a-half years.

Chaudhry repaid the loan back in full during August and September 2024. He has also paid back £2,000 of the £50,000 from the second loan and agreed to repay the remaining balance.

Chaudhry first applied for a Bounce Back Loan at the start of July 2020, falsely claiming his annual turnover was £200,000 as a sole trader. His second Bounce Back Loan application in September 2020 came just four days after he changed his name from Masood Jamati to Muhammadh Chaudhry.

Chaudhry claimed that the turnover for UK Media Kit Hire was again £200,000, the smallest amount businesses could put down in order to receive the maximum £50,000 permitted under the scheme.

Insolvency Service investigators found no evidence that UK Media Kit Hire had ever traded. Chaudhry agreed to use the loans “wholly for business purposes” in making the applications.

However, money from the loans was moved through his family’s savings accounts before being paid back to him and his wife and withdrawn in a series of cash and cheque transactions.

Bank analysis revealed that money in the account was also used for holidays to Pakistan.

Mark Stephens, Chief Investigator at the Insolvency Service, said “Muhammadh Chaudhry cynically invented a turnover figure to secure Covid support for his media business which we found absolutely no evidence had ever traded.

“He then fraudulently applied for a second Covid loan for UK Media Kit Hire, another company which again appears never to have done any business.

“These actions were clearly pre-planned and Chaudhry deliberately chose to take advantage of a taxpayer-backed scheme which was set up to support legitimate businesses during the pandemic.

“While we are of course pleased that Chaudhry has eventually accepted responsibility for his actions and committed to paying back the money in full, we note that this was only done when he was faced with potentially even more serious consequences.”