PRESS RELEASE : Glasgow engineer, John Gerard McGarvey, banned for £100k Bounce Back Loan abuse [December 2022]

The press release issued by HM Treasury on 8 December 2022.

John Gerard McGarvey, 37, from Rutherglen, has been disqualified as a director for 11 years after claiming two separate Bounce Back Loans totalling £100,000, and then using the money for personal benefit.

McGarvey was the sole director of CKO Civil Engineering and Surveying Limited, which was incorporated in October 2019 and ran as a surveyor’s firm based in Kirkinitlloch in Scotland until it went into liquidation in November 2021.

CKO applied for a Bounce Back Loan of £50,000 in July 2020, with McGarvey stating the company had a previous year’s turnover of £225,000.

Bounce Back Loans were government-backed loans introduced to support businesses through the pandemic. Under the rules of the scheme, companies could apply for loans of up to 25% of their 2019 turnover, allowing them to borrow from £2,000 to a maximum of £50,000, as long as the money was to be used for the economic benefit of the business.

Businesses were not allowed to apply for an additional loan unless they had originally borrowed less than the maximum amount.

But CKO applied for a second Bounce Back Loan of £50,000 just four weeks later, in August 2020. This time McGarvey applied to a different bank and stated that the business had a previous year’s turnover of £218,000.

The company struggled to survive post-Covid, and went into liquidation owing around £183,000, which triggered an Investigation by the Insolvency Service.

Investigators discovered that McGarvey had applied for two loans – which was against the rules of the scheme – and had exaggerated CKO’s turnover both times. The company’s most recent accounts showed a turnover of only around £46,400.

They also discovered that McGarvey had used the full £100,000 for his own gain, rather than to support his business.

The Secretary of State accepted a disqualification undertaking from John Gerard McGarvey after he did not dispute he caused CKO to receive two Bounce Back Loans totalling £100,000 to which the business wasn’t entitled, and then used money for his personal benefit, rather than for the economic benefit of the business.

His disqualification started on 28 October this year and lasts for 11 years.

The disqualification undertaking prevents McGarvey from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court.

Steven McGinty, Investigation Manager, said:

“Not only did John McGarvey grossly exaggerate the company’s turnover to secure an initial loan, he also applied to a second bank for another loan his company wasn’t entitled to. To compound his actions, he used the money for his personal gain.

“His 11-year ban should serve as a warning that if you abuse government support, we will use our full powers to bring you to account.”