A businessman who exploited a government Covid support scheme to steal £150,000 has been hit with a confiscation order for nearly £200,000.
The Details of the Mobile Phone Shop Fraud
Zahid Afzal, aged 37 from Haverfordwest, legitimately applied for two Bounce Back Loans worth £52,500 for his companies, Phone Bits Limited and Phones Onn Ltd, in 2020. However, he then proceeded to abuse the system designed to help struggling firms during the pandemic.
Afzal submitted three further fraudulent applications for the maximum loan amount of £50,000 each, despite the rules stating companies were only entitled to one loan. His businesses operated mobile phone shops and kiosks in locations including Carmarthen, Shropshire, Andover in Hampshire, and North Devon.
Between May and November 2020, he successfully received £150,000 in illicit funds: one £50,000 loan for Phone Bits Limited and two separate £50,000 loans for Phones Onn Ltd.
Court Order and Consequences
At Swansea Crown Court on Monday, 19 January 2026, Afzal was ordered to repay a total of £197,306 within three months. The judge warned he would face a two-year prison sentence if he failed to comply.
This order comes after Afzal was given a two-year suspended sentence and 300 hours of unpaid work in June 2025, having pleaded guilty to fraud following an investigation by the Insolvency Service.
Alexander Grierson, head of asset recovery at the Insolvency Service, stated: "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."
How the Fraud Was Uncovered
The investigation revealed the specific lies Afzal told to secure the cash. In May 2020, he falsely declared that Phone Bits Limited had not received a Bounce Back Loan, even though £32,500 had been paid into its account the previous day.
For Phones Onn Ltd, he fraudulently claimed the company's turnover was £200,000 in applications made in July and November 2020. This was the minimum required to get the top £50,000 loan. In stark contrast, he had stated the turnover was just £80,000 in a legitimate application months earlier.
A significant portion of the stolen £150,000 was transferred to Afzal's personal accounts, directly breaching the scheme's rules. To date, he has repaid only £2,722 of the stolen money over more than five years.
The Insolvency Service used the Proceeds of Crime Act 2002 to secure a restraint order on Afzal's accounts, freezing the assets. The final confiscation figure of £197,306 includes the three fraudulent £50,000 loans plus indexation to account for the change in the value of money since 2020.
Even if Afzal is jailed for non-payment, the debt will remain, and authorities will continue to pursue the funds.
