Brendan Michael Gaughan, 40, from Glasgow was director of three separate property management companies: Gaughan Group, Gaughan Property and Rentl Property. All three were incorporated in February 2020 and had conducted no business until April 2020, meaning they were not eligible for funds through the Bounce Bank Loan scheme.
None of the firms qualified for loans ‒ these were only available to those that had been doing business on 1 March 2020. However, Gaughan Group received a loan of £50,000, as did Gaughan Property, while Rentl Property received a loan of £35,000.
The funds were all transferred into a single account and used to buy a property worth nearly £160,000 in August 2020. That property was then sold for just over £140,000 in March 2021, with £100,000 of the proceeds transferred into Gaughan’s personal account.
The three businesses were all put into liquidation on the same day, 11 October 2021, which triggered an investigation by the Insolvency Service.
Gaughan did not dispute that the companies were ineligible for the loans. He has been banned from being involved in the promotion, formation or management of a company, without the permission of the court, for 12 years.
Steven McGinty, investigation manager at the Insolvency Service, noted that the Bounce Bank Loans had been set up to support trading companies which had been adversely affected by the pandemic.
He continued: “Brendan Gaughan should have known his companies weren’t entitled to the loans yet he took them anyway and used the funds for personal gain. We will not hesitate to take action against directors who have abused Covid-19 financial support like this.”
Previous reports from the National Audit Office have warned that the government may lose as much as £26bn as a result of fraudulent Bounce Back Loans.
