A family of criminals funded their lavish lifestyles by raking in £150,000-worth of bogus Covid-19 loans after setting up fake firms.
The relatives living in Ilford in east London, who cashed in on Bounce Back Loans provided from public money during the pandemic, have now been sentenced – including immediate jail terms for two of them.
The illicit businesses applying for government help were launched or used by Kashid Rashid, 53, his 46-year-old wife Noreen Malik, nephew Rehaan Mohammed, 32, and Rashid’s 61-year-old brother brother Rizwan Haider.
The offenders insisted they had been adversely affected by lockdown and claimed inflated annual turnovers to qualify for the maximum loan of £50,000 each time.
The money was instead used to pay for house upgrades and private school fees, while also sent to other family members and businesses they controlled.
Voice notes recovered by the National Crime Agency caught Rashid discussing the need to create false invoices to support his applications.
They used three businesses to successfully apply for three Bounce Back Loans totalling £150,000.
And Rashid planned to buy another firm in July 2020 – four months after the first lockdown was announced – with the aim of claiming a further BBL worth £50,000.
The fake firms applying for government help were launched by Kashid Rashid, 53 (pictured)
He was joined in the fraud by defendants including nephew Rehaan Mohammed, 32 (pictured)
He told the owner he would pay £15,000 if they applied for the loan through their business account ahead of the sale. The owner decided not to proceed.
The last of four applications was submitted by Mohammed but ultimately rejected because the company was dormant.
NCA investigators discovered one of the frauds based on documents found in Rashid’s hire car.
Fingerprint analysis identified that Patric Ciwinski, 36, had attempted to fraudulently set up a false universal credit claim in the name of Robert Wright.
However, no funds were received before the fraud was uncovered.
Rashid was also separately found to be fraudulently claiming Universal Credit in the name of an alias after failing to disclose he had a child and never having lived at the address he claimed. He was arrested in August 2020.
NCA officers found that Rashid had legally changed his name nine times in ten years in order to frustrate financial institutes’ abilities to run proper credit checks.
Mohammed was arrested in April 2021 and declined to answer any questions in interview.
Malik attended a voluntary interview with officers in June 2021, while Ciwinski did so in December 2021 and Haider the following October. All declined to answer questions from officers.
Rashid admitted one count of fraud by false representation in relation to the Universal Credit fraud but denied all other charges alongside his co-defendants.
They were convicted by a jury at Southwark Crown Court in south London after a five-week trial on November 28 last year.
Rashid has now been sentenced to six and a half years in prison at the same court last Friday. He has previous fraud convictions in the United States and Romania.
Once he serves his sentence in the UK, he will be extradited to Romania to serve a further four-year prison sentence.
Mohammed was handed three years behind bars for his role.
Malik and Haider each received two-year sentence suspended for two years and Ciwinski was given a 12-month community order.
Rashid, Mohammed, Malik and Haider were also disqualified from being company directors for set periods.
Judge Hale said the group had ‘deliberately exploited a government scheme which was set up to assist a national crisis’, describing their offending as ‘a systematic and repeated assault on the banks and the Bounce Back scheme’.
Following the sentencing, Alistair Reid from the NCA said: ‘Bounce Back Loans were a vital tool for businesses to help them stay afloat and continue trading during the Covid-19 pandemic.
‘However, this family saw it as an opportunity to exploit the system at a time when the country was facing unprecedented challenges.
‘The money they fraudulently claimed was instead spent on their own lavish lifestyles – funding car payments, house renovations and private school payments.
‘All the while, Rashid was also fraudulently claiming Universal Credit payments to further supplement his deceitful income.
‘Fraud of this nature undermines trust in government initiatives, diverts essential funds away from genuine businesses and damages the integrity of financial systems.
‘The effects are far reaching, beyond the immediate loss, ultimately harming local economies, jobs, and communities that strived to recover and rebuild from Covid lockdown.’
Fraud and error linked to Covid support schemes cost taxpayers an eye-watering £10.9billion and much of it will never be recovered, a report found last December.
Tom Hayhoe, appointed in 2024 as Covid counter fraud commissioner, said controls on spending at the start of the pandemic were ‘inadequate’.
His final report stated that many decisions taken during Covid lockdowns ‘paid too little attention to the risk of fraud’.
But it added, in some cases, ‘this was accepted as necessary and proportionate to the importance of responding rapidly to the crisis’.
Mr Hayhoe was tasked by Chancellor Rachel Reeves with trying to recoup public money lost to Covid-related fraud.
His report admitted that only £1.8billion of the estimated £10.9billion lost to fraud and error in Covid spending had been recovered.
It also warned that ‘much of the shortfall is now beyond recovery’, although ‘areas remain where investing in recovering money paid out incorrectly is worthwhile’.
The previous Conservative government introduced policies to support firms and workers during Covid including wage furlough, Bounce Back Loans and the Eat Out To Help Out scheme.
Many of these programmes were credited with helping to prop up the UK economy during the pandemic.
But Mr Hayhoe said prioritising speed in the delivery of this support led to a ‘high level’ of fraud risk.
His review also highlighted significant financial losses linked to Government contracts for buying PPE (personal protective equipment).
More than 38billion items of PPE were bought between February and July 2020, but about 11 billion had not been used by March 2024 and losses amounted to an estimated £10billion, the report said.
Recovering public money lost due to Covid fraud has been difficult as some evidence has ‘degraded’ and stolen funds have been dispersed and moved offshore, according to Mr Hayhoe’s findings.
The report added that there were limitations in the ability to fully understand the details of Covid-era spending due to key decision-makers moving on and information being lost.
The report recommended the Government launch a scrutiny panel with senior officials to help implement improvements and learn lessons.