COVID-19 restrictions left a long lasting impact on small and mid-sized businesses and some of them had a hard time reviving. To cope with the financial difficulties in these challenging times, the Government introduced business grants to provide the much needed support to the businesses and residents. But, a significant ratio of fraudsters took advantage of the pandemic grants and used the amount for personal benefits.
NSW Police suspects that a group of fraudsters submitted 120 bogus grant applications to get funds meant for struggling businesses. They confirmed about establishing Strike Force Sainsbery to “identify fraudulent individuals who had sought payments intended to support small businesses and residents through the COVID-19 restrictions”.
The Service NSW chief executive, Damon Rees, said that “businesses were required to reaffirm their eligibility every 15 days to continue to receive the COVID-19 micro-business grant payment from 20 September”.
Investigators identified anomalies in some applications in late October. The alleged fraud was identified by comparing the phone numbers in the police database with the ones used in the grant applications.
The total amount of suspected fraud accounts to $20m and a long list of fake companies are a part of it. These grant applications amounted to at least $15.9m, but around $4.6 million were saved after being flagged by the investigators. Almost 2.6 percent of all payments were transferred to the fraudulent applicants.
NSW police investigators used the artificial intelligence software to target the alleged swindlers and unveiled this fraud worth millions.
To strengthen its detection system, Service NSW is continually keeping itself updated and takes action to report suspected fraudulent activity to the NSW Police.
Also, the law enforcement bodies and CPA Australia is leaving no stone unturned to prevent future frauds with multiple checks and balances. This helps in ensuring that the grant applications are accurately filed and properly reviewed so that the taxpayer funds go to those who meet the eligibility criteria and need it the most.
If your business is struggling to survive due to the pandemic and you’re willing to file a business grant application, our tax accountants at KPG Taxation can help you out.