Covid loan fraudster ordered to repay nearly £200,000
A man who abused the government’s Covid support schemes by fraudulently securing multiple Bounce Back Loans for his mobile phone businesses has been ordered to repay almost £200,000 following court proceedings.
Zahid Afzal, 37, previously obtained £150,000 through three separate Bounce Back Loan applications made between May and November 2020. While his companies had already lawfully received £52,500 under the scheme, Afzal went on to submit further applications to obtain the maximum loan amount for each business, despite companies being entitled to only one loan.
The loans were taken out in the names of Phone Bits Limited and Phones Onn Ltd, businesses operating mobile phone shops and kiosks across England and Wales. Afzal falsely declared that the companies had not previously received Bounce Back Loans and overstated turnover figures in order to qualify for higher borrowing.
At a confiscation hearing at Swansea Crown Court on 19 January 2026, Afzal was ordered to repay £197,306 within three months. The total reflects the full value of the fraudulently obtained loans, alongside indexation to reflect changes in the value of money since 2020.
Despite more than five years having passed since the loans were taken out, Afzal has repaid only £2,722. Failure to comply with the confiscation order will result in a two-year prison sentence. Even if he is imprisoned, the repayment obligation will remain in force.
The confiscation order follows a suspended prison sentence handed down in June 2025, after Afzal pleaded guilty to fraud offences uncovered during investigations by The Insolvency Service. He was sentenced to two years’ imprisonment, suspended for two years, and ordered to complete 300 hours of unpaid work.
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 that criminals such as Afzal are not allowed to benefit financially from their greed during the pandemic.”
Investigations revealed that Afzal’s first fraudulent application was submitted just one day after £32,500 in legitimate Bounce Back Loan funding had been paid into Phone Bits Limited’s account. Further false declarations were made in July and November 2020 for Phones Onn Ltd, where Afzal claimed the business had an annual turnover of £200,000, despite previously stating it was only £80,000 when applying legitimately for a £20,000 loan.
In addition to the false declarations, substantial sums from the loan proceeds were transferred into Afzal’s personal bank accounts, breaching the scheme’s requirement that funds be used solely for the economic benefit of the business.
Following his conviction, the Insolvency Service obtained a restraint order under the Proceeds of Crime Act 2002, preventing Afzal from moving or spending assets while recovery action progressed.
The case forms part of ongoing efforts to pursue and recover public funds lost to Covid-related fraud, reinforcing the continued enforcement focus on Bounce Back Loan abuse.