Crypto News: UK Man Gets 22 Months Behind Bars For Spending Covid-19 Relief Funds On Crypto And Gambling

British businessman Haralambos Ioannou gets 22 months in jail for misusing Covid relief loans on crypto trading and gambling.

A British businessman, Haralambos Ioannou, has been sentenced to almost two years in prison. 

The 49-year-old, from Cow Lane, Edlesborough, Buckinghamshire, reportedly used the money to gamble and invest in crypto, instead of supporting his glazing business.

The Insolvency Service revealed that Ioannou applied for two separate £50,000 Bounce Back loans during the pandemic. The loans, which were designed to help small businesses survive lockdown restrictions, were limited to one per company. Despite this rule, Ioannou submitted a second application using inflated figures for his company’s 2019 turnover.

Within eight days between June and July 2020, both applications were approved, and his company accounts received a total of £100,000.

How Haralambos Ioannou Spent the Funds

According to the Insolvency Service, Ioannou used the first £50,000 loan well and kept his glass-fitting firm afloat during the pandemic. However, the second loan told a different story.

Records showed that Ioannou transferred nearly £20,000 to his personal account and spent £25,000 on gambling sites. He also used £8,000 for crypto investments and withdrew about £6,000 from ATMs before transferring £16,000 to his ex-wife. 

Southwark Crown Court concluded that the second loan was obtained and spent fraudulently. 

Ioannou was sentenced to 22 months in prison, suspended under conditions and ordered to complete 150 hours of unpaid labour. 

He must also repay £40,000 in restitution. Additionally, he received a five-year ban from serving as a company director.

Insolvency Service Condemns Abuse of Covid Relief

David Snasdell, Chief Investigator at the Insolvency Service, strongly criticised Ioannou’s misuse of funds. 

Snasdell stressed that the Bounce Back Loan scheme was meant as a lifeline for businesses struggling during the COVID-19 lockdowns. Misusing those funds not only broke the law but also undermined public trust in the program.

The Wider Crackdown on Covid Loan Fraud

The Insolvency Service reminded businesses that all Bounce Back loans must be repaid within six to ten years. 

Repayments were meant to start twelve months after receiving the loan, regardless of company status.

The agency also confirmed that investigations would continue even if a company has been dissolved. Any attempt to avoid repayment through dissolution or faking financial information could result in harsh penalties.

Authorities noted that several other UK businesses had already been wound up for submitting fake documents to access government aid. 

In two separate cases, companies obtained a combined £230,000 in loans through these kinds of fake applications. Investigations later uncovered 41 more local authorities that received similar claims.

Covid Loan Fraud and the Crypto Connection

Ioannou’s case stood out because of his use of government funds to invest in crypto during the height of market hype in 2020. That year, Bitcoin doubled in price while Ethereum quadrupled.

This drew in many inexperienced investors hoping to profit quickly.

Authorities said Ioannou transferred approximately £8,000 of his loan money into “crypto investment” accounts. However, they did not disclose which tokens or platforms were involved.

Many similar fraud cases during the COVID period included individuals who diverted loans to speculative crypto assets, gambling or luxury purchases.

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