Newcastle Recruitment Consultant Sentenced Over Covid Loan Fraud

A recruitment consultant from Newcastle upon Tyne has been sentenced after admitting a series of offences linked to Covid fraud, bankruptcy breaches and the illegal operation of a phoenix company.

Lucien Ekamba-Elombe, 50, of Union Hall Road in Newcastle, was handed a 22 month prison sentence suspended for two years at Newcastle Crown Court on May 20. The court heard that his offences included fraudulently securing a Government-backed Covid Bounce Back Loan, continuing to act as a company director while banned and transferring large sums of company money for personal property purchases.

The case has drawn attention across Newcastle upon Tyne and the wider North East after investigators described the offending as deliberate, calculated and persistent over several years.

Insolvency Service investigation uncovered multiple offences.

The prosecution followed a lengthy investigation by the Insolvency Service into the activities of Ekamba-Elombe and his businesses.

According to investigators, Ekamba-Elombe had previously served as director of United Recruitment and Employment Limited, a recruitment company that entered liquidation in January 2019. Later that same year, he was declared bankrupt because of unpaid council tax debts.

Despite the restrictions placed upon him following bankruptcy proceedings, the court heard that he secretly established another recruitment company called Unify Group Limited in September 2019.

Investigators said the business effectively operated as a phoenix company. This is where a new company is created using a similar name and structure to a failed business, often in an attempt to continue trading while avoiding previous liabilities and debts.

The Insolvency Act 1986 places strict rules on the use of company names after insolvency. Prosecutors said Ekamba-Elombe breached those rules by operating under a name closely linked to his former recruitment business.

Nominee director used to hide involvement.

The court heard that Ekamba-Elombe attempted to conceal his role within the company by appointing another individual as director.

However, investigators later discovered the named director had no knowledge of the appointment and was effectively acting as a nominee without consent.

Officials said Ekamba-Elombe continued to control and manage the Newcastle recruitment business behind the scenes while attempting to avoid scrutiny from authorities.

David Snasdell, chief investigator at the Insolvency Service, said the offences represented a serious abuse of insolvency law and public trust.

He said: “Lucien Ekamba-Elombe’s criminal actions were calculated, persistent and wide-ranging.

“This was a prolonged and deliberate course of offending that touched almost every aspect of insolvency law.

“Ekamba-Elombe abused Covid support funds, ran a phoenix company while bankrupt and carried on as if a director ban simply did not apply to him.”

Fraudulent Covid Bounce Back Loan claim.

One of the most serious offences involved a fraudulent application for a Government-backed Bounce Back Loan during the Covid-19 pandemic.

The Bounce Back Loan Scheme was introduced to support struggling businesses during lockdown restrictions and economic disruption caused by the coronavirus pandemic.

In December 2020, Ekamba-Elombe successfully secured a £30,000 loan for Unify Group Limited despite restrictions connected to his bankruptcy and business conduct.

The court heard that significant amounts of money were later transferred from company accounts into personal accounts.

Investigators discovered that more than £12,000 had been moved directly into Ekamba-Elombe’s personal bank account. A further £8,000 was transferred to an individual or business in France which had no known business relationship with Unify Group Limited.

Authorities argued these transactions demonstrated misuse of public Covid support funding that was intended to help legitimate businesses survive during a national crisis.

Director disqualification order ignored.

The court also heard that Ekamba-Elombe had already been banned from acting as a company director before continuing his involvement with Unify Group Limited.

In January 2022, he received a five year director disqualification linked to misconduct involving his previous recruitment business, United Recruitment and Employment Limited.

The ban legally prevented him from managing or controlling a company until 2027.

Despite this, prosecutors said he continued acting as director of Unify Group Limited in direct breach of the order.

The Insolvency Service said tackling director misconduct remains a key priority, particularly in cases involving abuse of Covid financial support schemes and phoenix companies.

Mr Snasdell added: “Rooting out Covid fraudsters, cracking down on abusive phoenix companies and holding disqualified directors to account are all central to the Insolvency Service’s work.

“We are committed to protecting honest businesses, creditors and the public from individuals who believe the rules do not apply to them.”

Company funds used for property purchases.

Further investigation revealed that company money had allegedly been used to help fund two property purchases.

Between June and October 2022, more than £190,000 was transferred from Unify Group Limited into Ekamba-Elombe’s personal bank account.

The funds were later passed to solicitors connected to the property transactions.

Investigators argued that the transfers amounted to improper use of company assets for personal gain while creditors and legal restrictions remained unresolved.

The Insolvency Service has since confirmed it is pursuing recovery of the money under the Proceeds of Crime Act 2002.

Arrest warrant issued after missed court appearance.

Ekamba-Elombe initially failed to appear before the court earlier this year, leading to a warrant being issued for his arrest.

Authorities later apprehended him in April before proceedings resumed at Newcastle Crown Court.

In addition to the suspended prison sentence, the 50 year old was ordered to complete 250 hours of unpaid work and was banned from acting as a company director for a further seven years.

He had previously pleaded guilty to the offences in October last year.

The case is one of several high profile fraud investigations involving misuse of Covid financial support schemes that have emerged across the UK since the pandemic.

Officials continue to warn businesses and company directors that abuse of public support funding will be pursued through both criminal prosecutions and financial recovery proceedings.

For businesses across Newcastle upon Tyne and the wider North East, the case also serves as a reminder of the strict legal responsibilities placed upon directors following insolvency or bankruptcy.

What do you think about the sentence handed down in this Newcastle upon Tyne Covid fraud case?