Woman invented business to get £50,000 Covid loan

A Northolt woman who invented a business to get a £50,000 Covid Bounce Back Loan backed by the government has been sentenced for fraud.

Jagoda Rubaszko made up administrative service company which she falsely claimed had a turnover of £210,000.

She then paid the loan into five separate bank accounts in Poland over a two-month period.

Rubaszko was sentenced to 18 months' imprisonment, suspended for 21 months, for fraud by misrepresentation at Isleworth Crown Court on 5 June.

She will be tagged and under curfew between 19:30 and 06:00 every day for six months and must complete 175 hours of unpaid work.

Rubaszko was investigated by The Insolvency Service, a government agency that administers compulsory company liquidations and personal bankruptcies.

The service said it is seeking to recover the fraudulently obtained money.

The Bounce Back Loan Scheme was designed to enable businesses to access finance more quickly during the coronavirus outbreak.

Rubaszko applied to a bank for a loan on 26 April 2021, which was approved on 28 April 2021 and paid into her bank account.

In the application, she claimed she had been operating a business since 1 March 2020 and had a turnover of £210,000.

But investigations into Rubaszko's finances showed her tax returns were no higher than £15,100 each year between 2019 and 2021.

In a prepared statement, Rubaszko claimed to have been contacted by a man called Daniel, who told her how to apply for the loan, and to declare herself bankrupt to avoid repaying it.

But Rubaszko admitted she had never met Daniel, even though she said she paid him a £17,500 commission for his "help" after receiving the £50,000.

Her bank records showed no such payment was made – instead, 22 smaller payments up to £11,690 were made to five individual bank accounts in Poland.

After declaring herself bankrupt, Rubaszko was subject to a 10-year Bankruptcy Restrictions Undertaking (BRU) on 12 May 2023.

The BRU prevents her from managing a limited company until 2033.

Chief investigator at the Insolvency Service, Mark Stephens, said Rubaszko claimed to be a business director, but she had no business at all, and now reality has "caught up with her".

He added: "She invented a man called Daniel, who she has blamed for her actions, claiming he had told her to apply for the loan, and she believed she'd get away with this by declaring herself bankrupt.

"What is definitely real, is that she took money which was meant to help businesses during a difficult period, and sent that funding off to the bank accounts of five men in Poland."

The bounce back scheme provided a total of £47bn in loans of which an estimated £4.9bn was lost to fraud.

The House of Commons Public Accounts Committee said in 2022 that the focus on delivery of the bounce back loans meant lenders were not required to do credit or affordability checks - or even verify application information.

To offset this risk to lenders the government guaranteed the loans 100% - meaning that if the borrower did not repay the loan, the taxpayer will.

The committee concluded that the scheme came at a "staggering" cost to the taxpayer and money that "could have been spent on improving existing public services, reducing taxes or to reduce government borrowing".

Listen to the best of BBC Radio London on Sounds and follow BBC London on Facebook, X and Instagram. Send your story ideas to [email protected]