Ministers ignored red flags over Covid fraud, says former head of SFO

theguardian.com:

The former head of Britain’s financial crime prosecutor has said “red flags were ignored” in the rush to distribute taxpayer funded emergency loans to businesses during the pandemic, and questioned whether fraud was taken seriously by the government.

Parliament’s spending watchdog estimates fraud and error were likely to have cost the UK government as much as £16bn across the various Covid loan schemes, including those for small businesses.

Sir David Green, the Serious Fraud Office (SFO) director from 2012 to 2018, said there had been warning signs that should have been picked up.

“Red flags were ignored,” said Green. “Obviously, there was a political priority to get money out the door to assist individuals and businesses, to keep the economy afloat, but just because you need to get money out the door doesn’t mean you throw ordinary prudence out the window. And I think some of the red flags that were ignored tend to suggest that that is what happened.

“Examples would be the failure to cross-check with HMRC about the trading experience and turnover of a company that was claiming a Covid loan, or the fact that, I think, well over 2,000 applications for a particular type of loan came from the same business address.”

Green, who is now a partner at Cohen & Gresser, where he works defending complex fraud and other white-collar cases, expressed wider concerns that fraud was not a priority.

“I do not think that the SFO can really succeed until it is taken seriously by government,” he said. “And I think there is evidence … that the support for it is somewhat half-hearted.”

As evidence, Green cited insufficient funding to recruit and retain high quality staff, including the disparity in pay received by the respective heads of the SFO and