Organised Crime Groups are believed to have submitted fraudulent applications to Liverpool Council to get their hands on cash grants aimed at helping businesses survive the pandemic.
The emergency business grants were issued rapidly to prevent the sudden collapse of companies, job losses and devastation to the economy caused by the national covid lockdowns last year and the beginning of 2021.
But Liverpool Council said that as of the end of the 2020/21 financial year five potentially fraudulent applications had been identified as having links to organised crime.
Three others were investigated by Merseyside Police, including one which saw 65-year-old Izzldenein Yousif jailed in July this year after claiming a £10,000 grant for a car wash business that no longer existed.
Council officers had received a tip-off and discovered the business, Izzy Bizzy Hand Car Wash on Prescot Road, Fairfield, had stopped trading three years earlier.
When the council rang the 65-year-old to confront him over the fraud, Yousif said he had already spent the money and hung up.
Yousif was eventually found squatting in the grounds of the disused Newsham Park Hospital and arrested.
However an annual counter fraud report by the council's Internal Audit Service, published this month, revealed that other cases appeared more sophisticated.
The report stated: "As noted nationally, the rapid response required to administer the grants inherently increased the risk of fraudulent applications being processed.
"The Council has to date identified eight potentially fraudulent grant applications which have all be reported to the relevant authorities.
"Five are being investigated by the National Investigation Service (NATIS) due to their potential links to Organised Crime Groups, and three are being investigated by Merseyside Police.
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"One of these Merseyside Police cases has resulted in a six-month custodial sentence for the applicant after they admitted submitting a fraudulent application for £10,000. The money has also been returned.
"In order to support the prompt review and investigation of fraudulent applications, a liaison has been established with Merseyside Police to allow for a timely triage of suspected frauds to help improve the likelihood of successful prosecutions."
A Liverpool City Council spokesperson said: "We are unable to comment in detail on active investigations.
"However, we have robust checks and balances in place to identify fraudulent applications and will not hesitate to inform the relevant authorities and provide evidence to support prosecutions."
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