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Mohammed Rashidzadeh obtained a £50,000 Bounce Back Loan for his business but almost immediately transferred the money from his company account to buy a house in Huddersfield
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Rashidzadeh applied to close down Cozy Bed Ltd through Companies House within eight days of receiving the funds, while deliberately failing to notify the bank that lent him the money of his intentions
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The 34-year-old, now based in North Wales, was jailed for 18 months following investigations by the Insolvency Service
A Covid fraudster who bought a house in Huddersfield using Bounce Back Loan funds has been jailed.
Mohammed Rashidzadeh appointed solicitors to help him buy a three-bedroom semi-detached house in the Almondbury area of the town just two days after receiving the £50,000 loan in June 2020.
The 34-year-old also attempted to strike his Cozy Bed Ltd company off the Companies House register without informing the bank who had lent him the Bounce Back Loan.
Rashidzadeh, now of Caellepa, Bangor, was found guilty of offences under the Fraud Act and Companies Act following a four-day trial at Leeds Crown Court earlier this year.
He was sentenced to 18 months in prison on Thursday 25 September.
Mark Stephens, Chief Investigator at the Insolvency Service, said
Mohammed Rashidzadeh’s offending was twofold and deeply cynical. He immediately misused the £50,000 Bounce Back Loan funds he obtained to buy himself a house instead of supporting his business through the pandemic.
His second offence was equally calculated – attempting to dissolve his company without properly notifying his creditors, including the bank who had provided the loan. The strike-off process exists to protect creditors’ interests, and deliberately concealing such applications from lenders is a criminal offence that undermines the entire corporate framework.
The Insolvency Service remains committed to taking robust action against Bounce Back Loan fraudsters. Government-backed schemes were a lifeline for legitimate businesses during an unprecedented crisis, and we will continue to pursue those who deliberately exploited this support at the taxpayers’ expense.
Cozy Bed Ltd was established in March 2019 as an online bed retailer with Rashidzadeh as its sole director.
Rashidzadeh applied for the £50,000 loan in June 2020, declaring that Cozy Bed Ltd had a turnover of £203,000.
Within days of receiving the government-backed loan, Rashidzadeh began misusing the funds. Just two days after the money arrived, he contacted solicitors to handle the purchase of a house on Morton Green for £116,000.
Rashidzadeh transferred the entire loan amount from the company account into his own personal bank account by the end of the month.
All £50,000 was subsequently passed to the solicitors as part of the house purchase in late July 2020.
Meanwhile, Rashidzadeh was taking steps to dissolve his company and avoid repaying the loan.
In mid-June – just eight days after receiving the funds – he applied to close Cozy Bed Ltd down by having it struck-off the Companies House register.
The legal process requires companies to notify all creditors, including lenders, but Rashidzadeh failed to inform the bank of his application.
Cozy Bed Ltd was struck-off the register in October 2020. No Bounce Back Loan repayments were ever made by Rashidzadeh.
Rashidzadeh sold the house on Morton Green in August 2021.
The Insolvency Service is seeking to recover the fraudulently obtained funds under the Proceeds of Crime Act 2002.
