Obtaining a Bounce Back Loan when possibly not entitled to do so has resulted in the bid for a one-vehicle international O-Licence by Leven-based James Kilpatrick, trading as Kilpatrick Coach Hire, being refused by Traffic Commissioner (TC) Claire Gilmore.
In doing so, the TC directed that a copy of her decision be sent to Action Fraud for it to investigate whether there had been any impropriety on the part of Mr Kilpatrick in applying for the Bounce Back Loan in the way he did.
Mr Kilpatrick had been called to an Edinburgh Public Inquiry because of a lengthy adverse history in O-Licencing going back to 1998. He said that he desperately wanted to get back into the coach business as an operator. He had been excluded from the industry for many years now and had been running an eBay business, but that was not as lucrative as it once was. He also had a business called Phoenix Travel, which was an independent tour company. The O-Licence would allow him to supply transport for Phoenix Travel.
Asked to explain the reason for the deposits from Phoenix Travel into the Kilpatrick bank account and how such large sums had come to be at its disposal given the fact that it had not been trading for some considerable time, Mr Kilpatrick said that grants were available to businesses because of COVID-19.
Phoenix Travel has been awarded a COVID-19-related grant to keep it afloat by Fife Council. He had transferred the sums from the Phoenix Travel account to the Kilpatrick Coach Hire account to ensure that he continued to meet the required financial standing requirement for the O-Licence application. Mr Kilpatrick had opened the Kilpatrick Coach Hire account around June 2020, when the country was still subject to restrictions. He had applied for a Bounce Back Loan under that business name a few days later.
In her decision, TC Gilmore said that Mr Kilpatrick had been found by the former TC to have behaved dishonestly and to have been involved in deliberate obfuscation during a DVSA investigation.
In 2014, the Deputy TC found that Mr Kilpatrick did not have the requisite repute to be granted an O-Licence because of an absence of evidence of compliant business operation since his disqualification from holding an O-Licence, his involvement in ‘fronting’ while disqualified, and his claims that he had never previously been advised by a TC that he had lost his repute, despite that being clearly stated in the written decision that had been issued.
TC Gilmore found Mr Kilpatrick to be an unconvincing and unreliable witness. He deliberately avoided answering questions when it was clear that he considered honest responses might harm his case. He claimed that Phoenix Travel was still a live business, but that was contradicted by his evidence that it had done “not very much” over the last five years.
Despite that, Mr Kilpatrick had applied for, and been given, government grant funding to keep Phoenix Travel afloat. It was more probable than not that Phoenix Travel had not been operating meaningfully, far less profitably, as a business for some time. Mr Kilpatrick applied for the grants under the trading name of Phoenix Travel, but he then created a new trading name under which he proceeded to apply for the Bounce Back Loan.
He was advanced the maximum permitted sum based on his projected turnover for his business. Mr Kilpatrick fully admitted that he had created the new business amid a pandemic when there was virtually no work for coach operators. He could see nothing wrong in doing so.
Kilpatrick Coach Hire was not an existing business as of 1 March 2020 that had lost revenue because of the pandemic. It was not, therefore, entitled to receive a Bounce Back Loan. Had Mr Kilpatrick disclosed that fact, the bank concerned ought not to have loaned him any money under the scheme.
TC Gilmore did not consider it a coincidence that had Mr Kilpatrick applied for the Bounce Back Loan under the trading name of Phoenix Tours, that being a business established prior to 1 January 2019, he would have had to provide details of his actual turnover. In relation to the probable profitability of Phoenix Travel, it was unlikely that Mr Kilpatrick would have been able to establish any basis upon which he would have been entitled to a Bounce Back Loan.
She considered that Mr Kilpatrick purported to create a new business entity solely for the purpose of applying for the Bounce Back Loan. Kilpatrick Coach Hire was not an existing business as of 1 March 2020 that had lost revenue because of the pandemic. It was not, therefore, entitled to receive a Bounce Back Loan.
TC Gilmore found Mr Kilpatrick’s claims that he believed he had done nothing wrong in applying for the loan to be wholly incredible. She suspected that he, fully in the knowledge that his existing sole trader business did not have sufficient turnover to justify the grant of a Bounce Back Loan, invented a new business and banked on no-one properly checking that he met the criteria in a system where estimates were accepted and little due diligence was being carried out.
Ms Gilmore noted that Mr Kilpatrick based his projected turnover figure on the operation of a single-vehicle business that already had the benefit of an O-Licence, well in advance of submitting any application for a licence, against a backdrop of significant adverse finding and warnings of the hurdles that he would face in seeking to have any further application granted.
Mr Kilpatrick’s projected turnover figure was therefore, at best, recklessly over-optimistic and at worst, deliberately and vastly over-inflated. Considering his track record of deceit, dishonesty and obfuscation, she felt that it was the latter.
He had sought to hide behind trading names and obscure from sight his opportunistic exploitation of state-backed crisis funding arrangements for personal gain. Mr Kilpatrick had obtained large sums of taxpayer-backed, low-cost funding when he was not entitled to do so.