**Welsh Businessman Receives Suspended Prison Sentence for Fraudulent £150k Covid Loan Claims**
A company director from Haverfordwest has been handed a suspended prison sentence after admitting to fraudulently securing £150,000 in government-backed loans that were intended to support businesses affected by the Covid-19 pandemic. Zahid Afzal, 37, exploited the financial lifeline offered during the national crisis to unlawfully claim funds for which he was not eligible.
The sentencing at Swansea Crown Court highlighted the strain placed on public support systems during the pandemic, particularly the government’s “Bounce Back” loan scheme. Designed to offer crucial financial breathing space to small and medium enterprises, the scheme permitted eligible businesses to borrow between £2,000 and £50,000 on favourable terms, aiming to avert widespread closures and job losses.
Prosecuting barrister Harry Dickens detailed how Afzal initially applied for, and received, two legitimate loans for his companies—Phones Onn and Phone Bits Ltd—from HSBC and NatWest banks respectively. However, Afzal then exploited his understanding of the system to make three additional fraudulent applications to Lloyds, Starling, and Metro Bank, again in the names of his phone businesses.
In those subsequent applications, Afzal falsely declared that there had been no previous loan applications for the companies in question. Further, he deliberately exaggerated business turnovers to qualify for the maximum possible payout from each loan. This misrepresentation enabled him to unlawfully obtain a further £150,000, proceeds of which were largely moved from company accounts into his personal funds.
Afzal pleaded guilty to three counts of fraud by false representation. The court was told that prior to these offences, he had no previous criminal record. Addressing the court on behalf of Afzal, defence counsel Jon Tarrant noted that his client had provided employment for eight individuals—six of whom were reliant on their jobs to keep their UK visas. Tarrant portrayed Afzal as a formerly respected community member and family man whose “unwise decisions” had reversed his fortunes and caused remorse.
Judge Catherine Richards, presiding over the case, cited the collective reliance on societal trust that underpinned public funding initiatives like the Bounce Back loans. She denounced Afzal’s deliberate and calculated actions, highlighting that his deception targeted a system created in good faith — at a time when businesses and families across the UK relied on such support for survival.
While the judge acknowledged that immediate jail time was warranted by the seriousness of the offences, she opted for a suspended sentence, weighing this against the potential negative impact on Afzal’s employees and the further burden on public finances. As part of his punishment, Afzal was handed a two-year prison term suspended for two years, along with an obligation to complete 300 hours of unpaid community work.
A proceeds of crime investigation is now underway to trace the movement of the fraudulent funds. The prosecution advised the court that a formal application would be lodged to restrain approximately £74,000 currently held in one of Afzal’s personal bank accounts while the investigation continues.
The case casts a spotlight on the vulnerabilities in emergency funding schemes and highlights the trust-based nature of public economic support. It serves as a stark reminder that exploiting such mechanisms, particularly amid national hardship, carries substantial legal and moral consequences.
As authorities work to recover lost funds and tighten safeguards, the incident stands as one of several to emerge around pandemic-related financial support, prompting further scrutiny of mechanisms put in place during times of crisis and the responsibilities of those who benefit from them.