Bulgarians behind UK’s biggest benefits fraud ‘systematically plundered’ welfare system

A Bulgarian gang who orchestrated the largest benefits fraud ever uncovered in the UK were able to go undetected for years because of a “woefully inadequate checking system” at the Department for Work and Pensions.

The five defendants, who “systematically plundered” the UK’s welfare system, were jailed for a total of 25 years and five months.

Galina Nikolova, 39, Stoyan Stoyanov, 28, Tsvetka Todorova, 53, Gyunesh Ali, 34, and 27-year-old Patritsia Paneva all admitted stealing upwards of £50 million of taxpayers’ money over a four and a half-year period.

False claims were made using an array of forged documents for Universal Credit with real people who were “nearly always living in Bulgaria” and who “were complicit and also gained financially”.

At Wood Green Crown Court on Thursday, Judge David Aaronberg said the sums involved were “eye-watering”, adding: “You systematically plundered the state’s support mechanism for the needy in order to fund your lifestyles and those of many others.”

He it was fraud on an “industrial scale”, which had resulted in the loss of millions of pounds to the taxpayer, adding: “It falls to me to sentence you today for your involvement, along with others not before the court, in the largest fraud of its type ever to be prosecuted in this country.”

‘Woefully inadequate’ systems

Judge Aaronberg added that the gang had been able to operate for so long because of “woefully inadequate checking systems” at the Department for Work and Pensions which failed to identify “repeated use of the same names, addresses and telephone numbers”

The court heard that one phone number had been used for around 600 false claims and around 40 shell companies, set up to provide false payslips, were all registered to one address.

There were a similar number of properties that were “recycled and repeatedly used” for thousands of different claims, the court heard.

Nikolova and Ali, the “leading” architects of the fraud, were jailed for eight years, and seven years and three months respectively. They were told they were also banned from being company directors for 12 years and were liable for deportation following their release from prison.

Ali was said to have “revelled” in the vast amount of cash he was making through his dishonesty, which he used to fund a lavish lifestyle.

The judge said he “rejected entirely” claims by Nikolova that she had been forced to carry out the fraud out of fear of others who had not been prosecuted.

Patritsia Paneva, Gyunesh Ali, Tsvetka Todorova admitted stealing upwards of £50 million
Patritsia Paneva, Gyunesh Ali and Tsvetka Todorova were among three who admitted stealing upward of £50 million

Paneva, who said she worked from a windowless office at the back of a grocery store, processing claims for the gang, was sentenced to three years and two months. The judge said she had been “recruited” by Nikolova because of her “naivety”, and there was no evidence that she had enjoyed a lifestyle like the other defendants.

Stoyanov, described as a “trusted subordinate”, was seen laughing in the dock before he was jailed for four years. The court heard Stoyanov, Nikolova’s partner, was a “conduit for those higher up in the chain”.

Todorova, who was operating her own fraud with a similar methodology and stole just under £300,000, was given a three-year sentence. However, because she had already served 18 months in prison on remand, half of her sentence, she was able to leave court on licence.

Judge Aaronberg said the gang had been able to operate for so long because of “woefully inadequate checking systems” at the Department for Work and Pensions, which failed to identify “repeated use of the same names, addresses and telephone numbers”.

The fraud was only uncovered after a lone policeman in Sliven, Bulgaria, tipped off British authorities when he noticed that his city was suddenly awash with cash and criminals were “living like barons”.

The Telegraph previously revealed that thousands of people living in Sliven, of whom many had never visited Britain, were receiving up to £2,500 a month in benefits from the UK.

Inspector Vassil Panayotov, who alerted police in Britain, said the true scale of the fraud was likely to be hundreds of millions of pounds higher than estimated.

Judge Aaronberg, thanked the Bulgarian authorities for their “assistance and cooperation” in the case.

‘Industrial-scale fraud’

He said the sentencing guidelines envisaged a maximum fraud of £2 million, adding: “In respect of you, Mr Ali and you, Ms Nikolova, I am dealing with losses to the taxpayer which exceed by more than 10 times the highest amount of money specified in the guideline.”

At a previous hearing, the judge speculated that those making the sentencing guidelines “may never have contemplated the possibility that there could be a benefit fraud as big as this”.

The gang members were charged with conspiracy to make false representation, which carries a maximum 10-year sentence and were entitled to credit for their guilty pleas and time served.

Ben Reid, a specialist prosecutor for the Crown Prosecution Service, said: “For a number of years, these defendants conspired to commit industrial-scale fraud against the Universal Credit system, costing the taxpayer more than £53 million.

“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. The CPS proceeds of crime division and DWP will now pursue confiscation proceedings against the defendants, to remove from them any available criminal benefit from this enterprise.”

The DWP said it had put measures in place to bring these people to justice, and to do so took a great deal of time, effort and investigation from the counter-fraud team.

It added that “easements” were put in place during the pandemic to ensure people were supported financially but “controls were now back in place”.