Faruk Chowdhury, a 45-year-old from Bordesley Green, Birmingham, has been handed a 22-month prison sentence suspended for two years after admitting to fraudulently obtaining £37,500 in Government Covid bounce back loans. The funds, intended to support struggling businesses during the pandemic, were instead used to clear his personal debts, the Insolvency Service confirmed.
Chowdhury, of Churchill Road, was the sole director of Learn & Earn Ltd, a company registered at an address in Maidstone, Kent. The business was established in February 2020, just weeks before the pandemic officially took hold, and listed its trading activity as 'repair of computers and peripheral equipment' on Companies House.
Fraudulent Loan Applications
In December 2020, Chowdhury applied for a Bounce Back Loan from a bank, falsely declaring that his company had a turnover of £150,000. Based on that misrepresentation, he received an initial £35,000. He obtained a further £2,500 top-up in February 2021, again claiming the same inflated turnover figure. In both applications, he stated the funds would be used for business purposes.
Within days of receiving the first £35,000, Chowdhury transferred £25,000 to his personal bank account. The remaining £10,000 followed in early January 2021. The £2,500 top-up was also swiftly moved to his personal account. Banking records later showed no evidence of genuine trading activity, no payments to any computer supplier, and the company never filed accounts or submitted tax returns.
Court Proceedings and Sentencing
Chowdhury appeared at Birmingham Crown Court on Tuesday, July 28, 2026, where he pleaded guilty to two counts of fraud by misrepresentation. The court heard that he had claimed the loans were needed to buy computer equipment and pay himself as the sole employee, alleging his business had been impacted by the pandemic. He also said he needed the money to secure premises and consolidate personal debts due to a poor credit rating.
However, the Insolvency Service investigation revealed that Learn & Earn Ltd had no genuine trading activity. The company entered liquidation in April 2021, and Chowdhury was disqualified from acting as a director for nine years in January 2022 as a result of his misconduct.
Judge Recorder William Rose sentenced Chowdhury to 22 months in prison, suspended for two years, and ordered him to carry out 250 hours of unpaid work. The court also noted that the Insolvency Service is pursuing recovery of the fraudulently obtained funds under the Proceeds of Crime Act 2002.
Insolvency Service Response
David Snasdell, Chief Investigator at the Insolvency Service, condemned Chowdhury's actions. 'Chowdhury cynically exploited a government scheme designed to support legitimate businesses through an unprecedented crisis,' Snasdell said. '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.'
Snasdell emphasised the importance of the Bounce Back Loan scheme, which provided a vital lifeline for small businesses during the pandemic, and warned that those who abused it 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,' he added.
Broader Context and Impact
The case highlights ongoing efforts by authorities to crack down on pandemic-related fraud. The Bounce Back Loan scheme, launched in May 2020, allowed businesses to borrow up to £50,000 with a 100% Government guarantee. However, its rapid rollout made it vulnerable to abuse, with many applicants simply required to self-certify their turnover.
According to the National Audit Office, fraudulent claims for bounce back loans may have cost taxpayers up to £4.9 billion. The Insolvency Service continues to investigate hundreds of cases, seeking both criminal convictions and director disqualifications. In Chowdhury's case, the nine-year disqualification prevents him from acting as a company director or being involved in the promotion, formation, or management of a company without court permission.
Chowdhury's company, Learn & Earn Ltd, never filed any accounts or tax returns, and its bank accounts showed no legitimate business income. The Insolvency Service noted that the company's description of its activities as computer repair appeared to be a front for the loan fraud.
The case serves as a warning to others who may have abused the scheme. Authorities have recovered millions of pounds through confiscation orders and voluntary repayments, but significant sums remain outstanding. The Insolvency Service encourages anyone with information about Covid loan fraud to report it.
