UK Man Jailed for COVID Loan Fraud - Gambled Funds on Crypto Markets
When government relief meets digital asset speculation—the outcome isn't always pretty.
The Risky Bet
A British citizen thought pandemic business loans made better gambling stakes than business capital. Instead of keeping operations afloat, he tossed the funds into high-risk crypto trading and casino games.
Legal Reckoning
The UK Financial Conduct Authority doesn't take kindly to emergency funds funding speculative binges. The court agreed—handing down a prison sentence that serves as a stark warning to would-be financial opportunists.
Another day, another reminder that free government money usually comes with invisible strings attached. The house always wins—especially when it's Her Majesty's treasury.
Ioannou transfers nearly £20K to his personal account
Ioannou received £100,000 within eight days between late June and early July 2020 after making two separate £50,000 loan applications. He submitted the first application in May 2020, stating a £216,000 turnover for 2019. He then submitted a second application, stating a turnover of £236,000 for 2019.
Haralambos Ioannou made almost 38 transactions, transferring £20,000 to his personal account. During the same period, Ioannou paid approximately £25,000 to gambling sites from his personal account and used an additional £8,000 to expand his cryptocurrency portfolio, alongside other investments. Ioannou also withdrew nearly £6,000 through ATMs and transferred another £16,000 to his ex-wife’s account.
Snasdell condemned Ioannou for fraudulently applying for a second Bounce Back loan and exploiting a government-backed scheme that was a lifeline for many businesses during the pandemic. Every company was only entitled to one such loan.
“He not only fraudulently applied for a second loan but then spent it on activities which had nothing to do with his company’s operations such as gambling, crypto-investments, cash withdrawals and payments to his then partner.”
–David Snasdell, Chief Investigator at the Insolvency Service
Snasdell warned that the agency is committed to strongly punishing those who exploit government-backed schemes for personal gain. He said the agency will continue to go after all those who deliberately abused the Covid-19 support at the expense of British taxpayers.
The Insolvency Service insists Bounce Back loans must be repaid
The Insolvency Service emphasized that all money lent to companies during the COVID-19 pandemic must be repaid within six to ten years. The repayments were supposed to start 12 months after the companies received the loans.
The agency also warns that companies that fail to repay the Bounce Back loans will be investigated, even after they have been dissolved. If any misconduct is discovered, action may be taken against the company or its representatives. The loans were made on the condition that they were not to be spent for personal use.
The agency disclosed that it will investigate misconduct, including falsifying loan application information and dissolving businesses to avoid loan repayments. It will also investigate whether other Covid-19-era assistance, such as the Eat Out to Help Out and Job Retention schemes, were used correctly.
The Insolvency Service has clarified that companies breaching any government-backed schemes will either be wound up by the court or be required to compensate their creditors. Company directors will also be disqualified for varied periods depending on the specific cases.
The agency revealed that two separate companies that submitted falsified documents to the government’s Bounce Back loan scheme were wound up by the court. Both companies secured around £230,000 worth of funding, including Bounce Back loans of £100,000. The investigation showed that the false documents were also submitted to 41 other local authorities.
Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.
