Three men have been arrested over alleged fraud linked to Rishi Sunak’s ‘Eat Out to Help Out’ scheme.
The men were arrested at their London addresses yesterday as part of an HMRC fraud probe into the use of the discount offer – which allowed diners 50 per cent off sit down meals.
It was widely used by restaurants, cafes and pubs across the UK throughout August to entice people to eat out again after lockdown.
But a Daily Mail investigation last month unearthed allegations into alleged fraud linked to pizza chain Papa John’s.
HMRC declined to confirm or deny whether the arrests relate to the franchise.
Meanwhile, another three men have been arrested over alleged fraud linked to the coronavirus bounceback loans.
Three men have been arrested over alleged fraud linked to Rishi Sunak’s ‘Eat Out to Help Out’ scheme. Pictured: Diners enjoy a meal at a restaurant during the Eat Out to Help Oout scheme
The scheme, announced by Chancellor Rishi Sunak (pictured), was widely used by restaurants, cafes and pubs across the UK throughout August to entice people to eat out again after lockdown
That scheme aims to help small and medium-sized businesses recover from the impact of lockdown rules.
HM Revenue and Customs (HMRC) said the three men arrested as part of the Eat Out to Help Out probe were aged 43, 48 and 37.
They were arrested on suspicion of cheating the public revenue and fraud by false representation.
The three men arrested as part of the coronavirus bounceback loan scheme were held in the Birmingham area on October 30 accused of fraudulently obtaining £145,000 in Government-backed loans.
All three suspects were questioned and have since been released under investigation, the National Crime Agency (NCA) said.
They mark the first such arrests amid a crackdown on scams relating to Government support schemes and come amid fears of widespread fraud.
Kath Doyle, deputy director of HMRC’s fraud investigation service, said: ‘The vast majority of businesses will have used Eat Out to Help Out responsibly but we will not hesitate to act where we suspect abuse of the scheme.
‘This is taxpayers’ money and any claim that proves to be fraudulent limits our ability to support people and deprives public services of essential funding.’
More than 100 million cut-price meals were eaten across the UK under the Eat Out to Help Out scheme, which was announced by the Chancellor as lockdown measures were eased in July.
More than 100 million cut-price meals were eaten across the UK under the Eat Out to Help Out scheme, which was announced by the Chancellor as lockdown measures were eased in July
An astonishing 36million meals were eaten on Bank Holiday Monday alone in a final cut price blow out
The ‘Eat Out to Help Out’ scheme (pictured: Chancellor Rishi Sunak at a restaurant during the scheme) cost the taxpayer £522million to date and the final bill could well top £600million when all the claims are in
The scheme offered a 50 per cent discount of up to £10 off meals on Monday, Tuesday and Wednesday in August.
The aim of the scheme was to boost the hospitality sector and encourage diners to eat out again, amid concern of a slow return following lockdown.
An astonishing 36million meals were eaten on Bank Holiday Monday alone in a final cut price blow out.
But last month a study claimed it played a ‘significant’ role in accelerating Britain’s second wave of coronavirus.
There was a sharp increase in clusters of Covid-19 infections a week after the Government scheme began, according to University of Warwick researchers.
They believe the initiative was to blame for as many as 17 per cent of new infection clusters between August and early September – one in every six.
But experts questioned the findings of the study and said outbreaks it picked up could not be definitively linked to restaurants or eating out, pointing out that it also took into account cases in areas where outbreaks were declining.
Meanwhile, the ‘Eat Out to Help Out’ scheme cost the taxpayer £522million to date and the final bill could well top £600million when all the claims are in.
But recent reports have suggested it had been abused by fraudsters, with a report suggesting one of the biggest alleged frauds into the Eat Out to Help Out scheme was at the Papa John’s pizza chain.
A Daily Mail investigation last month claimed outlets run by Raheel Choudhary took part in the scheme when they were collection and delivery-only during the height of the pandemic.
Mr Choudhary, who who owns 61 Papa John’s franchise restaurants, instructed staff to record thousands of ‘phantom covers’ while the Government scheme was running, according to whistleblowers and sales reports seen by the Mail.
He is the US giant’s largest UK franchisee. Because these non-existent meals were classed as ‘Eat Out to Help Out’, the taxpayer paid half the bill.
Mr Choudhary said at the time he was ‘co-operating fully’ with an internal investigation by Papa John’s.
HMRC declined to confirm or deny whether the arrests relate to the franchise.
Raheel Choudhary, pictured with his Lamborghini, is the UK’s biggest franchisee of Papa John’s restaurants – but he is suspected of pocketing £250,000 of taxpayers’ money
At the time of the Mail’s investigation, fraud experts warned the suspected scam was the ‘tip of the iceberg’, and highlighted how easily Government coronavirus schemes could be exploited, costing taxpayers billions of pounds.
The bounceback loan scheme arrests are thought to mark the first of many after the National Audit Office (NAO) warned last month taxpayers could lose as much as £26billion from fraud, organised crime or default.
The loans scheme is designed to support small and medium-sized businesses affected by the pandemic.
They are able to borrow up to £50,000 and do not have to pay any fees or interest for the first year.
Rachael Herbert from the NCA said: ‘The NCA and others will pursue those serious and organised criminals who seek to exploit the help provided to businesses during a national crisis.’