Former Nottingham chicken shop owner jailed over £50,000 Covid loan fraud

The former manager of a Nottingham city centre chicken shop has been jailed after fraudulently securing £50,000 in Covid support, after selling the business the year before the claim.

Mujeebullah Khan applied for the maximum-value Bounce Back Loan on behalf of Chunky Chicken in May 2020.

However, Khan and his business partner had sold the business in April 2019.

He was sentenced to 22 months in prison when he appeared at Nottingham Crown Court on Wednesday 17 December.

The 38-year-old finished repaying the loan in full shortly before being sentenced.

David Snasdell, chief investigator at the Insolvency Service, said: “Mujeebullah Khan’s offending was very simple – he secured £50,000 in Covid support for a business he had sold the previous year.

“The Insolvency Service continues to prosecute Covid fraudsters and will take action against anyone who abused these schemes intended to help legitimate businesses during the pandemic.”

Khan falsely stated that Chunky Chicken was carrying on its business at the start of March 2020 as part of the application.

All £50,000 was transferred two months later to a third party to repay a business debt.

Khan was declared bankrupt in May 2021 and signed an eight-year Bankruptcy Restrictions Undertaking in September of that year, restricting him from being able to borrow more than £500 without disclosing his bankrupt status.

The Insolvency Service is continuing to crackdown on Covid loan fraud post-pandemic. In April, a Brighton café owner received a suspended prison sentence after falsely claiming £150,000 in Covid support loans.

In January, a restaurant owner was jailed for almost three years and ordered to repay almost £40,000 after using Covid business loans to clear personal debts.

Last year a restaurant manager was handed a suspended sentence after using a £50,000 Bounce Back loan to buy £12,000 of jewellery.