How Britain’s largest advantages rip-off was uncovered by lone detective
The UK’s biggest ever benefit scam was exposed by a lone detective in a quiet Balkan city after he saw the fraudsters ‘living like barons’.
Inspector Vassil Panayotov, a detective from the small town of Sliven in Bulgaria, first became suspicious after he noticed locals sporting designer clothing and a huge increase in the number of properties being built.
He launched his own investigation into the apparent influx of cash into the town and soon discovered that thousands of residents were receiving up to £2,500 a month in benefits from the UK despite never stepping foot in the country.
Mr Panayotov alerted the British authorities, who later discovered the scale of deceptive scam, which was being run by a gang of Bulgarian fraudsters who raked in £54 million by churning out fake documents to trick DWP officials.
Galina Nikolova, 38, and her boyfriend Stoyan Stoyanov, 27, along with Tsvetka Todorova, 52, Gyunesh Ali, 33, and Patritsia Paneva, 26, were arrested on May 5, 2021.
They appeared in court on Tuesday for the first of their three-day sentencing hearing at Wood Green Crown Court.
Galina Nikolova, 38, and her boyfriend Stoyan Stoyanov, 27, (pictured together) along with Tsvetka Todorova, 52, Gyunesh Ali, 33, and Patritsia Paneva, 26, were arrested on May 5, 2021 after being found responsible for the UK’s largest benefit fraud scheme
Bodycam footage shows the moment police raided the gang’s food shop in North London
Bundles of cash stuffed in shopping bags and suitcases, a luxury car and designer goods including watches, jackets and glasses were found during a raid on their properties
The town of Sliven in Bulgaria where the benefit fraud gang was operating
Sliven is located in the foothills of the Balkan mountains in the east of Bulgaria
Mr Panayotov told The Telegraph: ‘I first became suspicious when I started to see the influx of money into Sliven. I wondered how these people had got such money.
‘I received information from contacts that hundreds of people were receiving social benefits from the United Kingdom using the weaknesses in the British social system.
‘When I received that information I started to check myself and began my own investigation. I eventually concluded that we were talking about maybe £200 million every year from the UK.’
Mr Panayotov claimed the gang had at least 6,000 customers who each paid a one-off commission of between £500 and £800. They would then receive on average between £2,000 and £2,500 a month for two months, he added.
After this point, the gang would take the cash for themselves, and over time they became so rich they started ‘living like barons,’ Mr Panayotov said.
He added: ‘The money coming into Sliven transformed the area. It did so in terms of property, but also people were buying designer clothes, and opening shops, casinos.
‘I gave the information to the British police and they launched their own investigation into the gang.’
Huge stacks of cash were also found during the investigation into the five man gang
This is the moment police arrived at the house of Galina Nikolova and Stoyan Stoyanov before arresting the couple in 2021
Police officers can be seen talking to Stoyan Stoyanov at his home before his arrest
Patritsia Paneva, 26, (left) and Tsvetka Todorova, 52, (right) were also arrested after being involved in the fraud scheme
Gyunesh Ali, 33, was also part of the gang and was arrested
DWP investigators later searched the homes of the gang and found shopping bags crammed with designer goods, Rolex watches, jackets and wads of cash.
Bundles of cash stuffed in shopping bags and suitcases, a luxury car and designer goods including watches, jackets and glasses were also found during a raid on their properties, the Crown Prosecution Service (CPS) said.
The group appeared to be hiding in plain sight – posting photos on social media smiling and posing behind the counter of Antonia’s Foods supermarket in Wood Green.
One of the hubs was behind a functioning corner shop selling groceries.
The enormous haul of money gained from their ‘complex financial web’ of claims was laundered through a number of accounts, then withdrawn in cash – with £750,000 in bank notes found stuffed in suitcases at one of their homes.
The vast sums made in the fraud were laundered through a network of bank accounts, Wood Green Crown Court heard.
Tom Little KC, prosecuting, told the start of a three day sentencing hearing: ‘The offending in this case was well organised and was committed on an extraordinarily large scale over a number of years by these defendants and by others. This is the biggest fraud ever detected upon the DWP.’
Mr Little told the court how gang members forged letters from local primary and secondary schools as part of the swindle.
‘Forged letters from schools would be used if it was said that there were children part of the claim because that potentially boosted the value of the claim.
‘Children as I’ve indicated who either did not exist or lived in Bulgaria were involved in some of the claims that allowed the value to be increased.’
He said people who had never even been to the UK benefited from the scam: ‘They may have travelled here for a short period of time to support the claim before returning to Bulgaria with the claim remaining ongoing.
‘Some were already here, made the claim and then departed. Some never even travelled here at all.’
The gang raked in £54m from Britain’s biggest ever benefit fraud. Pictured: A woman stands among piles of £20 notes on the floor of an apartment
The enormous haul of money gained from the claims was laundered through a number of accounts, then withdrawn in cash
Gang members used their Photoshop skills to create fake photos of ineligible claimants stood in front of doors to imaginary houses, the court heard.
‘Stoyanov refers to having someone who works with Photoshop who does ‘magic tricks’, said Mr Little.
‘Todorova advises taking photographs in front of the house for which the false claim is being made and stated: ‘They need to take three pictures in different poses and in Photoshop they will put him in front of the door and they will open it’.’
Mr Little referred to messages and photos shared between the defendants mocking the ‘naivety’ of the DWP.
‘Images are exchanged on the Deluxe WhatsApp Group that poke fun at the naivety of the DWP in relation to the fraudulent claims,’ Mr Little said.
Ali, Nikolova, Stoyanov, Todorova, and Paneva, all admitted fraud and money laundering offences dating from between October 2016 and May 2021.
While under investigation Ali fled the country to Bulgaria. But he was extradited back to the UK on 25 February 2023.
The sentencing is due to last three days.
Ben Reid, Specialist Prosecutor for the CPS, earlier said: ‘This case is the largest benefit fraud prosecution ever brought to the courts in England and Wales.
‘For a number of years, these defendants conspired to commit industrial-scale fraud against the Universal Credit system, costing the taxpayer more than £50 million.
‘Submitting thousands of false claims, the organised criminals enriched themselves from government funds designed to protect and help the most vulnerable people in our society.
‘This was a complex and challenging case which required close and effective working between CPS prosecutors, the Department for Work and Pensions and our international partners in both Bulgaria and through the UK desk at Eurojust, to dismantle and successfully prosecute the organised crime group.
‘The guilty pleas entered by all five defendants, reflects the strength of the evidence against them.
‘The CPS Proceeds of Crime Division and DWP will now pursue confiscation proceedings against the defendants, to remove from them any available criminal benefit from this enterprise.’
Mel Stride MP, Secretary of State for the Department for Work and Pensions, said: ‘I am immensely proud of DWP investigators’ work, in collaboration with the Crown Prosecution Service, to take down this organised crime group.
‘The convictions underline our commitment to protecting taxpayers’ money and it is only right and fair that we bring to justice those stealing from the public purse. My message is simple – if you are committing benefit fraud, you are cheating the taxpayer, and we will catch you.’
The sentencing hearing continues.
