Jail for 'benefit factory' fraudsters who cheated DWP out of £54m

Organised crime group members get sentences of up to eight years for "industrial-scale" Universal Credit scam
Wood Green Crown Court Photo: Google Maps

By Jim Dunton

31 May 2024

Five Bulgarian nationals behind the largest benefits fraud case ever brought before a court in England or Wales have been handed jail sentences of up to eight years.

Thousands of false claims for Universal Credit were made though three so-called "benefit factories" in London that the defendants were involved with between 2016 and 2021. In the process the Department for Work and Pensions paid out £53.9m in fraudulent claims.

According to the Crown Prosecution Service, the gang used both real people and false identities for their bogus claims, which were supported by fictitious tenancy agreements, counterfeit payslips and made-up letters from landlords, employers, schools, and GPs.

The CPS said the benefit factories were businesses that claimed to help people obtain national insurance numbers and benefits. Many applicants were found to have travelled to the UK solely for the purpose of making claims through them. They then left the UK, placing their claims in the hands of the crime group. 

Galina Nikolova, 39; Stoyan Stoyanov, 28; Tsvetka Todorova, 53; Gyunesh Ali, 34; and Patritsia Paneva, 27, were jailed by a judge at Wood Green Crown Court yesterday. They had all plead guilty to fraud and money-laundering offences at earlier hearings.

Nikolova was handed an eight-year sentence; Stoyanov was given a four-year sentence; Todorova three years; Ali seven years and three months; and Paneva was jailed for three years and two months.

The five were first arrested in May 2021, when raids found hundreds of "claim packs" with  forged and false documents, as well as bundles of cash stuffed in shopping bags and suitcases, a luxury car and designer goods including watches, jackets, and jewellery.

CPS specialist prosecutor Ben Reid said the case was the largest benefit fraud prosecution ever brought before a court in England and Wales.

"For a number of years, these defendants conspired to commit industrial-scale fraud against the Universal Credit system, costing the taxpayer more than £53m," he said.

Left to right: Galina Nikolova, Gyunesh Ali, Patritsia Paneva, Stoyan Stoyanov and Tsvetka Todorova
Left to right: Galina Nikolova, Gyunesh Ali, Patritsia Paneva, Stoyan Stoyanov and Tsvetka Todorova

"Submitting thousands of false claims, the organised criminals enriched themselves from government funds designed to protect and help the most vulnerable people in our society. 

"This was a complex and challenging case which required close and effective working between CPS prosecutors, the Department for Work and Pensions and our international partners in both Bulgaria and through the UK desk at Eurojust, to dismantle and successfully prosecute the organised crime group."

Reid said the CPS Proceeds of Crime Division and DWP would now pursue confiscation proceedings against the defendants.

Civil Service World offered DWP the opportunity to respond to the sentencings. It said it was unable to do so because of pre-election rules on government communications.

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