Thousands of pounds have allegedly been siphoned off from the UK government’s bounceback Covid loans scheme to fund terrorist activities, according to a court case that started on Tuesday in London.
An ex-pub landlord, Tarek Namouz, 42, faces eight charges of entering into a terror funding arrangement between November 2020 and May 2021. He is also accused of two counts of possessing terrorist information relating to videos.
Prosecutor Jonathan Polnay told the court it is alleged that the defendant sent “the proceeds of coronavirus bounceback funding loans to Isis” in his summary of the case, referring to the Islamist group.
The bounceback loan scheme was set up by the government during the first pandemic lockdown to provide rapid financial help for small businesses.
Namouz appeared at the Old Bailey by video link from Wandsworth jail.
Mr Justice Sweeney described it as a “serious case”, which would be heard by Judge Peter Lodder, the Recorder of Richmond sitting at Kingston Crown Court.
A plea and case management hearing was set for July 22, with a provisional two-week trial from November 21. The defendant, who spoke only to confirm his identity, was remanded in custody, according to the Press Association.
The court case may highlight the potential misuse of billions of pounds of funds backed by the government that were supposed to be directed to saving British businesses during the pandemic.
Scores of cases have emerged of alleged fraudsters taking money from the bounceback loan scheme to buy vehicles, drugs or mobile phones after only light checks were made on the borrowers of bank loans guaranteed by the scheme.
The Department for Business, Energy and Industrial Strategy has estimated that as much as £4.9bn of the £47bn scheme could be lost to fraud.
The scheme was designed to be as easy to use as possible given the need for businesses to secure funding after they were forced to close operations. Companies could claim loans of up to £50,000 from their banks with only minimal checks, with the money fully guaranteed by the government.
The House of Commons public accounts committee accused the business department last month of being “complacent in preventing fraud” on the state-backed scheme.
The MPs said the focus on delivery of the loans “at breakneck speed” meant business survival had come at a “staggering” cost to the taxpayer. The Treasury has promised to spend £25mn on a counter fraud task force to recover stolen money.