Birmingham Director Sentenced Over Fraudulent Covid Loan Claim
A Birmingham company director has received a suspended prison sentence after fraudulently securing £37,500 in Covid support for a business which had never genuinely traded.
Faruk Chowdhury, the sole director of Learn & Earn Ltd, falsely claimed that the company had a turnover of £150,000 when applying for a Bounce Back Loan.
The company, which was incorporated in February 2020, was registered as a computer and peripheral equipment repair business.
In December 2020, Chowdhury obtained a £35,000 Bounce Back Loan after declaring that the money would be used entirely for business purposes.
Within days, he transferred £25,000 into his personal bank account, followed by the remaining £10,000 in early January 2021.
Chowdhury later secured a further £2,500 top-up in February 2021 using the same false turnover figure. This money was also transferred into his personal account shortly after it was received.
Investigators found that Learn & Earn Ltd had no genuine trading activity before or after the loans were obtained.
Chowdhury claimed that the company had generated income and that the funds had been used to purchase computer equipment, secure premises and pay him as its sole employee. However, banking records showed no payments to computer suppliers or evidence of legitimate trading. The company also failed to file accounts or submit tax returns.
Learn & Earn Ltd entered liquidation in April 2021.
Chowdhury, 45, was sentenced at Birmingham Crown Court on 28 July 2026 to 22 months in prison, suspended for two years. He was also ordered to complete 250 hours of unpaid work. He had previously been disqualified from acting as a company director for nine years in January 2022 as a result of his conduct.
David Snasdell, Chief Investigator at the Insolvency Service, said:
“Faruk Chowdhury cynically exploited a government scheme designed to support legitimate businesses through an unprecedented crisis. He made false declarations about his company’s turnover and business activities, knowing full well that the funds would be used to settle his personal debts rather than support any genuine trading. Bounce Back Loans were a vital lifeline for small businesses during the pandemic, and those who abused the scheme undermined public confidence in government support. The Insolvency Service remains committed to investigating and prosecuting those who fraudulently obtained the loans, and work to recover the stolen funds.”
The Insolvency Service is now seeking to recover the fraudulently obtained money under the Proceeds of Crime Act 2002.
The case demonstrates the serious consequences directors may face where false information is provided to obtain company funding or business borrowing is used for personal purposes.