A UK business owner who exploited emergency Covid-19 support meant to keep small businesses alive has been ordered to repay every pound after being convicted of fraud involving the Bounce Back Loan Scheme.
Zahid Afzal, 37, secured £150,000 in government-backed Covid loans for mobile phone businesses operating across England and Wales by repeatedly breaking the rules of the scheme. The money, intended to support struggling firms during lockdown, was instead diverted for personal use.
At a confiscation hearing at Swansea Crown Court on Monday 19 January, Afzal was ordered to pay back £197,306 within three months. The figure includes the full value of the fraudulent loans plus indexation to reflect the change in the value of money since 2020. If he fails to repay the amount, he will face a two-year prison sentence, although the debt will still remain enforceable even if he is jailed.
Afzal initially made two legitimate Bounce Back Loan applications in 2020, receiving £52,500 for his companies Phone Bits Limited and Phones Onn Ltd. However, he then went on to abuse the system by submitting three additional applications for the maximum £50,000 loan, despite the scheme clearly allowing only one loan per business.
Between May and November 2020, Afzal secured one £50,000 loan for Phone Bits Limited and two £50,000 loans for Phones Onn Ltd. Investigators later found that he had falsely declared that neither company had previously received a Bounce Back Loan, even though funds had already been paid into their accounts.
In one case, Afzal applied for a second loan just one day after £32,500 had already been deposited into Phone Bits Limited’s account. In another, he inflated the turnover of Phones Onn Ltd to £200,000 in order to qualify for the maximum loan, despite previously declaring a turnover of just £80,000 when applying for a legitimate £20,000 loan.
Over five years later, Afzal has repaid only £2,722 of the £150,000 he fraudulently obtained. Investigators also uncovered that a significant portion of the funds had been transferred from business accounts into Afzal’s personal bank accounts, in direct breach of the scheme’s rules, which restricted use of the money strictly to business purposes.
Afzal’s businesses operated mobile phone shops and kiosks in Carmarthen, Shropshire, Andover in Hampshire and North Devon. His actions were uncovered following a detailed investigation by the Insolvency Service, which led to criminal charges and a suspended prison sentence in June 2025. He was sentenced to two years in prison, suspended for two years, and ordered to complete 300 hours of unpaid work.
Further investigations under the Proceeds of Crime Act resulted in a restraint order being placed on Afzal’s assets, preventing him from moving or spending funds while recovery action continued. The confiscation order now ensures that he cannot profit from fraud committed during one of the most difficult periods for businesses across the UK.
Alexander Grierson, Head of Asset Recovery at the Insolvency Service, said Afzal’s admission in court that he still held the fraudulently obtained funds made recovery efforts more straightforward. He stressed that tackling Bounce Back Loan fraud remains a priority and that offenders will not be allowed to benefit from exploiting emergency support designed to protect jobs and livelihoods during the pandemic.
For diaspora communities, particularly those running small businesses in the UK, the case serves as a reminder that Covid support schemes were created to provide genuine help and that abuse of public funds carries serious long-term consequences. Authorities continue to pursue offenders years after the pandemic, reinforcing that financial misconduct does not simply fade with time.
