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Criminal gangs allegedly pocketed £2 billion of furlough money

A report has found that organised crime gangs have got their hands on up to £2 billion from the Government’s furlough scheme.
The National Audit Office, which oversees government spending on behalf of Parliament, released a report which indicates that criminal fraudsters siphoned off between 2.5 and 5 per cent of the total money awarded to all businesses. Using official estimates from Her Majesty’s Revenue and Customs, the NAO said between £1 billion and £1.95 billion had “almost certainly” been claimed by organised criminals. The Government is investigating the fraud but so far just three people have been arrested by its dedicated tax enforcement teams.
The NAO’s report said that agents working on behalf of companies to make applications for grants, allowed under the furlough scheme, made it even easier for criminals to pose as multiple businesses and intercept their money. Organised criminals were able to claim payments intended for legitimate businesses for months as businesses were not alerted that their details had been used to make a fraudulent claim until August, it said.
A source in senior law enforcement said organised crime groups were probably using the money to prop up income streams that suffered during lockdown, including criminal activities such as prostitution rings and drug smuggling. The source suggested that there is also evidence that new criminal enterprises had been established specifically to target the government supports. 
The report suggests that possibly up to £3.9 billion paid out by the Government was lost due to crime, fraud, or error, and said the Government should also have informed workers directly that they had been furloughed in order to prevent employers from “double dipping” by letting employees continue to work.

Nearly one in 10 workers said their bosses asked them to work during their furlough.
The NAO auditor general, Gareth Davies, said, “It appears that the scale of fraud and error could be considerable, particularly for the furlough scheme.”

Separately a spokesman for the government commented that, “The Government’s priority from the start of the outbreak has been on protecting jobs and getting support to those who need it as quickly as possible. We make no apology for the speed at which they were delivered.” 



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