A Derbyshire restaurant owner who illegally obtained a £50,000 Covid bounceback loan and then closed his business the day after receiving the money has been sentenced to prison.
Owner of the old curry store Moja on Dale Road in Matlock, Syed Hussain, received an 18-month prison term.
Derby Crown Court heard that in May 2020 Hussain told NatWest that the turnover of his restaurant was £200,000, meaning he could ask for the maximum handout from them.
However, the last time he had filed any accounts, the amount was just £3,000.
Recorder Nicholas Watson said: “You applied for the loan on May 19 (2020), it was quickly approved on May 20 because the usual check and balances were not carried out.
“The funds were drawn down on May 21 and you moved them from your business account to your personal account and it is no coincidence that on the same day you dissolved the company.
“You concealed the dissolution of the business from NatWest because, had you been honest with them, they would not have given it (the money) to you.
“You then quickly dissipated the money and the Government is now £50,000 short.
“There was a vulnerability on the part of the lender because checks and balances were removed in order to give businesses the helping hand they needed at the time.
“This was a few simple clicks on the computer for you, filling out a few forms.”
At the time of asking for the money, the 24-year-old was two months into a suspended sentence for putting people’s lives at risk by flouting fire regulations at his restaurant.
On that occasion, he put the lives of people living above it at risk by failing to provide them with adequate escape routes or fire alarms and ignored warnings from Derbyshire Fire and Rescue Service to improve safety at the flat, which he was put in charge of by his father.
In doing so, should a fire have broken out at the premises or the apartment above it, they may not have been able to get out.
This week, the same court heard how he applied for the bounceback loan, brought in by the Government to prop up struggling businesses during the coronavirus pandemic which hit so many industries, especially restaurants which were forced to close.
Elisabeth Evans, prosecuting, said on the day the money was paid into his business account – Magic Spice Ltd – by NatWest, the defendant transferred it immediately into his personal account and dissolved the firm, not telling the lender.
She said: “These loans were brought in at a time of a national emergency. In his interview when he was asked about the £200,000 (turnover claim he put forward) he said ‘I think it was a mistake’. There was not the opportunity to challenge the figures on the application form and there is no evidence any of the money has been paid back.”
Hussain pleaded guilty to fraud and to a Companies Act offence. Sham Uddin, mitigating, said his client is the eldest son of the family household and is a carer for a mute uncle who lives there. He said: “He did attend the interview, he did make admissions and he accepted what he did was wrong.
“He was 20 years old at the time and he was too immature to run a business.
“The business was struggling and he made the decision to apply for the bounceback loan and totally accepts what he did was wrong and what he did was fraudulent.”
A Proceeds of Crime Act hearing, which could see money and assets seized from the defendant, will take place in January, Miss Evans said.