Jail for Bounce Back Loan fraudster
A COVID fraudster who bought a house in Huddersfield using Bounce Back Loan funds has been jailed.
Mohammed Rashidzadeh appointed solicitors to help him buy a three-bedroom semi-detached house in the Almondbury area of the town just two days after receiving the £50,000 loan in June 2020.
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The 34-year-old also attempted to strike his Cozy Bed Ltd company off the Companies House register without informing the bank who had lent him the Bounce Back Loan.
Rashidzadeh, now of Caellepa, Bangor, was found guilty of offences under the Fraud Act and Companies Act following a four-day trial at Leeds Crown Court earlier this year.
He was sentenced to 18 months in prison on Thursday 25 September.
Mark Stephens, Chief Investigator at the Insolvency Service, said:
Cozy Bed Ltd was established in March 2019 as an online bed retailer with Rashidzadeh as its sole director.
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Rashidzadeh applied for the £50,000 loan in June 2020, declaring that Cozy Bed Ltd had a turnover of £203,000.
Within days of receiving the government-backed loan, Rashidzadeh began misusing the funds. Just two days after the money arrived, he contacted solicitors to handle the purchase of a house on Morton Green for £116,000.
Rashidzadeh transferred the entire loan amount from the company account into his own personal bank account by the end of the month.
All £50,000 was subsequently passed to the solicitors as part of the house purchase in late July 2020.
Meanwhile, Rashidzadeh was taking steps to dissolve his company and avoid repaying the loan.
In mid-June – just eight days after receiving the funds – he applied to close Cozy Bed Ltd down by having it struck-off the Companies House register.
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The legal process requires companies to notify all creditors, including lenders, but Rashidzadeh failed to inform the bank of his application.
Cozy Bed Ltd was struck-off the register in October 2020. No Bounce Back Loan repayments were ever made by Rashidzadeh.
Rashidzadeh sold the house on Morton Green in August 2021.
The Insolvency Service is seeking to recover the fraudulently obtained funds under the Proceeds of Crime Act 2002.
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