A Covid loan fraudster who claimed £25,000 and then applied to dissolve his business the following day has been given a 15-month suspended prison term.

Ben Hamilton, the former director of a County Durham telecoms firm, applied for the Bounce Back Loan in May 2020.

However, within 24 hours of the money being paid into Netelco Ltd's bank account Hamilton filed paperwork to close the company.

He admitted fraud and was sentenced at Teesside Magistrates' Court.

The interest-free, taxpayer-backed loans of up to £50,000 were available through a government scheme aimed at cushioning the economy from the effects of the pandemic.

Hamilton, 34, of Lealholm Crescent, Middlesbrough, was identified as a fraud suspect after failing to notify creditors, such as the bank, that he was closing the firm.

The government's Insolvency Service said he did not co-operate with its investigation or attend an interview until it obtained a restraining order on his bank accounts through the Proceeds of Crime Act, at which point he repaid the loan in full.

Chief investigator Julie Barnes described it as a "clear case of attempted fraud by a company director who thought he could abuse the Covid-19 financial support schemes and get away with it".

Hamilton was also ordered to pay £2,500 prosecution costs and a victim surcharge of £156.

A total of 1.5 million loans worth £47bn were issued through the Bounce Back Loan initiative, after about a quarter of UK businesses applied.

In a report published late last year, the National Audit Office said estimated loans worth £17bn may never be repaid due to both fraudulent activity and legitimate borrowers defaulting.

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