DWP hails convictions in £54m Universal Credit fraud case

Five plead guilty over London 'benefit factories' that generated thousands of false claims
Wood Green Crown Court Photo: Google Maps

By Jim Dunton

12 Apr 2024

Five Bulgarian nationals have admitted their part in a £53.9m Universal Credit fraud case that the Crown Prosecution Service says is the biggest of its kind ever brought before the courts in England and Wales.

The Department for Work and Pensions hailed the convictions as evidence of its commitment to crack down on benefit fraud, which is estimated to have cost around £6bn in overpayments in 2022-23. The bulk of the fraud relates to Universal Credit, according to DWP's most recent annual accounts.

The convictions – the most recent of which were secured last week – relate to three so-called "benefit factories" set up in the capital that were the source of thousands of illegitimate benefit claims.

According to the CPS, the businesses claimed to assist people with obtaining national insurance numbers and benefits to which they are entitled.

The CPS said that after applicants made their claims through the three sources, they left them in the hands of the organised-crime group. Money gained from the fraudulent claims was laundered through a number of accounts and withdrawn in cash. 

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

According to the CPS, the case focused on fraudulent claims made between October 2016 and May 2021, during which time the group made thousands of false claims for Universal Credit using either real people or hijacked identities.

It said arrests in the case were first made in May 2021. Property searches found hundreds of "claim packs" with forged and false documents. Investigators also found bundles of of cash stuffed in shopping bags and suitcases, a luxury car and designer goods including watches, jackets and glasses.

Galina Nikolova, 38; Stoyan Stoyanov, 27; Tsvetka Todorova, 52; Gyunesh Ali, 34; and Patritsia Paneva, 26, have all pleaded guilty to fraud in the case, alongside other charges. They are due to be sentenced at Wood Green Crown Court next month.

Work and pensions secretary Mel Stride said he was "immensely proud" of the work of DWP's investigators in the case – in collaboration with the CPS.

"Building on our success in preventing £18bn going into the wrong hands in 2022-23, these convictions underline our commitment to protecting taxpayers’ money," he said.

"It is only right and fair that we bring those stealing from the public purse to justice."

DWP's most recent annual report and accounts suggests the £18bn figure Stride referred to is the department's estimate of the additional benefits payments it would have made if claims were paid "on demand" without checks on entitlement or the authenticity of documents.

CPS specialist prosecutor Ben Reid said the guilty pleas entered by the five defendants due to be sentenced at Wood Green reflected the strength of the evidence against them.

"This case is the largest benefit fraud prosecution ever brought to the courts in England and Wales," he said.

"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."

The CPS said its Proceeds of Crime Division would now pursue confiscation proceedings against the defendants.

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