Treasury officers attempting to cease fraudsters making off with huge Covid loans have been known as a “Dad’s Military operation” by a former Tory minister who condemned the lacklustre bid to cease “suitcases of money leaving the nation”.
Lord Agnew, who give up as the federal government’s anti-fraud minister earlier this 12 months, stated the primary few months of taxpayer-funded emergency loans being issued have been “glad days for crooks”.
In an eviscerating evaluation of the federal government’s try and keep away from the loans being given to untraceable firms, Agnew stated he was “genuinely fully dumbfounded” why the operation was not correctly resourced.
He revealed it took officers six weeks to create a system that would catch fraudsters making duplicate claims for the loans, which have been designed to maintain companies afloat. Nonetheless, he added by that point “60% of the cash had already gone out of the door”.
He recalled: “I used to be writing letters of congratulations to Border Drive workers for selecting up suitcases of money leaving the nation. It was glad days should you have been a criminal in these first few months.”
Out of a possible 100,000 fraud instances, Agnew stated simply 49 had resulted in arrest – a determine he branded a “shame”.
He claimed the financial crime invoice, handed by MPs on Monday, was a “begin” however solely mounted round 1 / 4 of the issues that wanted fixing in tackling critical offences, resembling cash laundering.
Agnew admitted he was “very anxious” that ministers would declare the invoice would clear up all the problems and warned that might be an “absolute tragedy”.
In a direct assault on probably the most senior civil servant within the Treasury – the division wherein Agnew was once a minister – he additionally stated {that a} letter he acquired from Tom Scholar “embodies the whole lot in regards to the complacency that grips the civil service”.
It comes two months after the Treasury confirmed it had written off £4.3bn price of the £5.8bn of fraud witnessed throughout its Covid enterprise mortgage schemes.
Agnew stated he give up as a result of he was requested to defend the transfer, however determined he “couldn’t arise with any nice integrity and say that we’d performed a terrific job, as a result of we hadn’t”.
Talking to the Treasury choose committee on Wednesday, Agnew stated the Again Bounce Mortgage Scheme was an “necessary intervention” to assist maintain small and medium-sized companies afloat when robust restrictions have been in place that pressured them to shut.
“We needed to get the cash out rapidly to legit companies and provides them the assist they wanted,” he stated. “However on the fraud facet it was only a Dad’s Military operation.”
Agnew stated the financial crime invoice – heralded by the federal government as a key transfer to assist deal with soiled cash being laundered within the UK – was a begin, however added: “This shouldn’t actually be known as an financial crime invoice, as a result of it’s about tightening up some Land Registry disclosures …
“This solely offers with in all probability 25% of what must be performed. The Firms Home scenario is solely terrifying – the gaping holes that exist there by way of their incapacity to hold out any correct anti-money-laundering checks on folks making use of for an organization.”
Agnew additionally stated the top of fraud on the British Enterprise Financial institution had just lately “resigned out of frustration as a result of she was not getting supported” in bids to make sure “a a lot more durable set of reporting requirements from the banks”.
He additionally dismissed as “complete drivel” and a “traditional fob off” explanations by the federal government about why it could not publish a listing of the companies that acquired loans.
The Treasury has been contacted for remark.