Athlete and business owner, Rick Beardsell has been sentenced after fraudulently obtaining Bounce Back Loans for one of his companies.
The entrepreneur saw success after convincing both Deborah Meaden and Taj Lalvani to invest £75,000 in his ShakeSphere business but has since run into trouble with HMRC.
Not only did the world sprint champion illegally alter figures to claim the maximum £50,000 loan, he also took out another maximum Bounce Back Loan alongside it. The money, meant to prop up his sportwear company, Sports Creative, was instead used to help fund the purchase of a £1.3m Cheshire home.
Almost £84,000 of the £100,000 claimed was moved into Beardsell’s private bank account, with £5,000 being transferred to his wife and £10,000 going to another family member. Two mortgage payments absorbed the rest of the loan money, putting all of it out of the reach of any creditors.
Fraudulent application
At the end of 2020, the Great Britain masters athlete had told HSBC that Sports Creative’s turnover was £485,000. This figure allowed Beardsell to claim the maximum Bounce Back Loan available of £50,000. However, after investigation, the Insolvency Service found that the real figure was £90,000, meaning that the actual turnover had been inflated by nearly 439%.
Only two weeks later, in January 2021, he applied through a different bank, NatWest, for a second Bounce Back Loan, when only one was ever allowed. This time he claimed the turnover of his company was £320,000.
Forbes Burton’s Senior Client Manager and insolvency expert, Ben Westoby remarked that “businesses were required to report their pre-Covid turnover for 2019 as part of the application, meaning that there’s little excuse for the disparity between the two turnovers reported, especially in 2021.
“Given the chaos surrounding businesses in 2020 and 2021, it can almost be excused that some would be confused about the ins and outs of Bounce Back Loans. These were unprecedented times to operate a business in, and some were rightly worried about their companies’ futures. That being said, there were undoubtedly others who saw the chaos as an opportunity to fraudulently obtain funds”
Given “professional advice”
Beardsell claimed that he received “professional advice” that Bounce Back Loans could be used for any purpose that benefited the company, and that a property purchase would fall within this framework.
He also claimed that HMRC themselves gave him the green light to apply for the second loan, though the governmental organisation argued that this would not have been the case if Beardsell had revealed that he had already been successful with another application a couple of weeks prior.
The two-time world record holder said that “the funds that were transferred to my personal account constituted a director’s loan and other economical overheads for the business”. He eventually pleaded guilty to two counts of fraud.
In court
Beardsell has been sentenced to 18 months in prison, suspended for two years to allow his family to make financial provisions for his absence.
He has also been ordered to pay £11,142.70 in costs and complete 250 hours of unpaid work. The ex-world champion has already paid back the £100,000 he took in Bounce Back Loans.
The Insolvency Service has been keen in recent months to make an example of those that have abused the Bounce Back Loan scheme. The Judge Simon Berkson, presiding over the case, explained that “this is not a victimless crime. The government was trying to help struggling businesses at the time of national crisis. People where in lockdown, people were dying and people were very ill at the time when people required their public services. [Beardsell] used fraudulently obtained public funds for [his] own use, depriving honest people of the scheme’s funds when the country was in crisis”.
Sports Creative was liquidated less than a year after the second loan application in December 2021. Beardsell’s other business, ShakeSphere has been unaffected by its sister company’s troubles.
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