Jailed restaurateur ordered to pay more than £36,000 following Covid loan fraud

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The former owner of a Derbyshire curry house who was sent to prison for Covid fraud has been ordered to repay more than £36,000.

Syed Hussain was jailed for 18 months and banned as a company director for three years in August 2023 after admitting charges of fraud by false representation.

In May 2020, Syed fraudulently secured a £50,000 Bounce Back Loan while serving a suspended sentence for breaching fire safety regulations at the former Moja Indian restaurant in Matlock.

The 24-year-old claimed on the application form that the turnover of Magic of Spice was £200,000. He later said putting this figure down was a mistake.

Syed dissolved the restaurant on the same day the funds appeared in his bank account, stating that it had been struggling for the previous year. He then transferred £30,000 of the loan to two family members who used the money for their own personal spending.

A further £10,000 was used for personal expenses such as hotels and car hire. No evidence was provided to the Insolvency Service of the money being used for business purposes, and Hussain also made no repayments to the loan despite this being a condition of the scheme.

On Friday 17th May, he has was ordered to pay £36,200 during a confiscation hearing at Derby Crown Court. 

Mark Stephens, chief investigator at the Insolvency Service, said: “Syed Hussain’s cynical actions in exploiting a taxpayer-backed scheme introduced at a time of national emergency were completely unacceptable.

“His behaviour in failing to notify the bank when he was applying to have his company struck off the register was equally calculated and pre-planned.”

Derby Crown Court gave Syed three months to pay the money or face an additional 18 months in prison. He would still owe the full amount ordered in the event he fails to comply and is returned to prison.

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