Future Tech

IT consultant-cum-developer in court over hiding COVID loan

Tan KW
Publish date: Mon, 22 Apr 2024, 07:12 PM
Tan KW
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Future Tech

UK government is kissing goodbye to the £100,000 an IT consultant-cum-software developer wrongly secured under the Bounce Back Loans scheme that was created during the pandemic to financially support firms.

Bounce Back Loans (BBL) were offered to small and medium sized businesses from May 2020 until March 2021, allowing them to borrow between £2,000 ($2,475) and £50,000 ($61.8k). Under the rules, it was one only loan per business and the funds were not for personal use.

Yet the UK's Insolvency Service says Syzmon Jastrzebski, director of E Marketing Ltd, a sole-trader set up in 2019 to provide software and consultancy services, hid one of the two loans he received.

Jastrzebski, whose last known address was Buxton Road, Luton, made an application for two BBLs in May 2020 both worth the maximum £50,000 ($62.230). E Marketing ceased trading a month later and was liquidated in July 2021.

The techie failed to inform the insolvency practitioners that he'd applied for and received monies from the first loan - this only emerged during investigations into his conduct by the Insolvency Service.

E Marketing didn't maintain "adequate accounting records" since its incorporation in October 2019 until its demise, according to the Insolvency Service. And investigators were unable to determine if the loads were used for the "economic benefit of the business."

In addition, Jastrzebski made payments to third parties of more than £500,000 ($622.8k) between March 2020 and June 2021. These were not explained or contested by Jastrzebski, and he failed to attend a hearing at the Bristol Business and Property Court on Tuesday, March 26.

At the hearing, 24-year-old Jastrzebski was handed the disqualification from being a company director for 13 years, meaning that unless he gets permission from a court he is not allowed to be involved in the promotion, formation or management of a company for that duration in the UK.

Kevin Read, chief investigator at the Insolvency Service, said: "Syzmon Jastrzebski caused his E Marketing business to breach the conditions of the Bounce Back Loan Scheme.

"Jastrzebski applied for two Bounce Back Loans when the rules of the scheme were very clear that only one application could be made for an individual business. He compounded this by failing to disclose the existence of the first loan he secured when his company went into liquidation.

"Tackling Bounce Back Loan misconduct is a key priority for the Insolvency Service. The 13-year disqualification order made reflects the serious nature of the breach of acceptable behaviour for any company director by Jastrzebski and means he cannot be involved in the promotion, formation or management of a company in the UK for that period," he added.

Jastrzebski was also ordered to pay costs of £3,566 ($4,442) - a mere fraction of the loans he received. We asked the Insolvency Service what happened to £100,000 (123.7k) in BBLs paid to the man.

"It would be up to the liquidators to decide if Jastrzebski had any assets to pursue in terms of recovering the £100,000," a spokesperson told us.

E Marketing Ltd was dissolved in December, and in a filing on UK company repository, Companies House, the liquidators confirm unsecured creditor claims.

"To date claims totaling £100,795 have been received. This was significantly higher than anticipated due to the discovery of the second bounce back loans taken out with NatWest Bank plc."

"There have been insufficient funds to make a payment to unsecured creditors in the matter," the filing adds.

E Marketing had no assets, as listed in the Statement of Affairs, so the liquidators had asked Jastrzebski to sign a personal guarantee for £4,800 ($5,930) to cover certain costs of the liquidation. Only £500 ($618) of this has been received.

"The liquidators had commended legal action to recover the remaining £4,300 ($5,315), but through the efforts of tracing agents have since determined that the director has returned to Poland. Pursuing the debt is therefore not viable, and must be written off."

Investigators were subsequently unable to confirm if the loans were used for the economic benefit of the business.

It seems that Jastrzebski's case is going to add this to the ever growing list of both financial misconduct and fraud committed by scumbags that exploited the pandemic. It is estimated that £21 billion ($25.96 billion) of public money was lost to fraud, according to the National Audit Office.

Why no safeguards were in place to tackle this explosion in fraudulent activity is a question asked by the NAO in February:

"Officials told us that they struggled to access the data that they needed that existed elsewhere in government to support emergency responses. The recent pandemic demonstrated that agreeing data sharing under the Digital Economy Act 2017 can be cumbersome and take too much time to be practical in an emergency.

"Improving data and interoperability is a systemic challenge for government. Public bodies have different approaches to data governance and data is dispersed across central and local government bodies. Different software and hardware may be used, and the same information recorded in different ways," the report added. ®

 

https://www.theregister.com//2024/04/22/it_consultant_receives_director_ban/

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