Phone shop owner must repay £197k Covid loan fraud

A Pembrokeshire businessman who conned the system to pocket £150,000 in pandemic support loans has been given three months to pay back nearly £200,000 or face prison.

Zahid Afzal exploited the government’s Bounce Back loan scheme after initially making two legitimate applications for his mobile phone businesses, Phones Onn and Phone Bits Ltd. The 37-year-old then used his insider knowledge to fraudulently secure three additional £50,000 loans he wasn’t entitled to.

Operating phone shops and kiosks across Carmarthen, Shropshire, Hampshire, and Devon, Afzal made applications to Lloyds, Starling, and Metro Bank in 2020. He falsely claimed his companies hadn’t previously applied for the loans whilst inflating their turnover figures to access maximum funding.

Once the money hit his business accounts, Afzal transferred substantial sums into his personal bank accounts.

Last June at Swansea Crown Court, the father-of-three from Albert Street, Haverfordwest, received a two-year suspended prison sentence and 300 hours of unpaid work after admitting three counts of fraud by false representation.

His defence barrister Jon Tarrant told the court that Afzal employed eight people, six of whom relied on the work to maintain their UK visas. He described his client as a successful businessman who had “established himself in a positive light to many people but that position has now been reversed”.

This week’s confiscation hearing revealed that in the five years since obtaining the fraudulent loans, Afzal has repaid just £2,722. He must now pay £197,306 within three months or serve two years behind bars. The figure includes the three loans plus indexation accounting for changes in money value since 2020.

Alexander Grierson, head of asset recovery at the Insolvency Service, said: “When Zahid Afzal stood up in court and admitted he still had the fraudulently obtained Bounce Back loan funds, he made our job of recovering them far easier. Afzal deliberately abused the Bounce Back loan scheme by applying for loans he knew he was not entitled to and which were not for business use. Tackling Bounce Back loan fraud remains a key priority for the Insolvency Service and we are determined criminals such as Afzal are not allowed to benefit financially from their greed during the pandemic.”