Biggest benefit frauds cases against the UK government

Benefit fraud costs the UK billions every year, with the Department of Work & Pensions estimating that over £9 billion was lost to error and overpayment in the 2023-24 financial year. Benefit fraud schemes range from individuals purposely lying to obtain small increases in their benefits to multimillion pounds schemes carried out by international gangs.

As fraud runs rampant through the UK economy it should come as little surprise that our public sector is one of the chief targets of criminals. It is also unlikely to be much of a surprise that the defences and checks in place to detect fraud are extremely limited and wholly inadequate; making the UK an attractive target to criminals from across the world.

It is difficult to put an exact figure on the total amount of benefit fraud in the UK. The Department of Work & Pensions estimate that last financial year over £9 billion was lost to error and overpayment; with the true figure likely to be noticeably higher.

In this article, we are going to look at some of the biggest benefit fraud cases and types of schemes committed against the UK government.

£53.9 million benefit fraud

Galina Nikolova and four other conspirators, all members of a Bulgarian gang, managed to perpetrate the largest known benefit fraud in UK history.

Between October 2016 and May 2021, the gang made thousands of fraudulent claims for universal credit using both real people and false identities. Forged letters from employers, schools, GPs and landlords, fake pay slips, and fictitious tenancy arrangements were all used when applying. Investigators described the gang as running a claims factory, where claims were being constantly submitted.

Once a claim was accepted, the gang would then fly in foreign nationals to attend meetings to secure the claims where necessary. It is believed that these people would receive a pay-off from the gang for doing this and any benefits would then go into accounts controlled by the gang.

This scheme was initially brought to light by a detective in the Bulgarian city of Sliven who was curious about where the sudden influx of wealth that was behind a rise in building projects and designer clothing came from. Bulgarian authorities estimate that, given what they can see, the true value of the fraud is likely in the hundreds of millions.

For her part, Nikolova was sentenced to just eight years; whilst her conspirators were sentenced to between 3 and 7 years.

£2.4 million COVID grant fraud

Twelve men from a national organised crime gang were convicted for running this large scale fraud exploiting schemes set up by the UK government to help businesses through the pandemic.

The gang set up non-trading shell companies and stole the identities of legitimate business directors to make hundreds of fraudulent COVID grant applications.

The gang obtained 53 Small Business Grant Funds worth £530,000, Eat Out To Help Out scheme payments worth over £500,000, and over £1.3 million across 26 Bounce Back Loans.

£2.2 million universal credit fraud

Tanyo Danchev masterminded a four year fraud that stole £2.2 million from the British taxpayer that exploited universal credit.

Danchev would fly in accomplices from his native Bulgaria and, upon picking them up from the airport, drive them to job centers to submit fraudulent universal credit claims using documents falsified by himself. These benefits were then paid into an account controlled by Danchev.

The scheme eventually unraveled when it was discovered that the companies listed as employers in multiple claims were non-trading. Further investigations then discovered that the bank accounts being used were linked to both Danchev and many other claims.

He received seven years in prison after pleading guilty to all charges.

As we have seen in our previous article on 'an-introduction to fraud in the UK', it’s not just the public sector that is heavily targeted by financial criminals. If you are worried about your company’s exposure to fraud speak to one of our experts about how Red Flag Alert will make your company do smarter, safer, and quicker business with our anti-fraud solution.