The UK’s biggest ever benefit fraud scheme was uncovered after a lone Bulgarian police officer told British authorities his city was suddenly awash with cash and criminals were “living like barons”, The Telegraph can reveal.
Five Bulgarian nationals admitted stealing over £50 million from the taxpayer last month and on Tuesday appeared on day one of their three-day sentencing hearing at Wood Green Crown Court.
Galina Nikolova, 38, Stoyan Stoyanov, 27, Tsvetka Todorova, 52, Gyunesh Ali, 33, and Patritsia Paneva, 26, were supported by dozens of family and friends. In April they pleaded guilty to fraud and money laundering.
The gang had thousands of “customers” and joked about the inability of the Department for Work and Pensions to catch them in messages shared on WhatsApp.
Their scheme unravelled when Inspector Vassil Panayotov, a detective based in Sliven, in the foothills of the Balkan mountains, launched an investigation into the sudden influx of cash in his city after noticing properties were being built and residents were wearing designer clothing.
He found that thousands of people, of whom many had never visited Britain, were receiving up to £2,500 a month in benefits from the UK.
He alerted the UK authorities via the British embassy in Sofia and in May 2021 a series of raids were conducted across north London.
The true scale of the fraud is likely to be hundreds of millions of pounds higher than estimated, according to Mr Panayotov.
He told The Telegraph: “I first became suspicious when I started to see the influx of money into Sliven. I wondered how these people had got such money.
“I received information from contacts that hundreds of people were receiving social benefits from the United Kingdom using the weaknesses in the British social system.
“When I received that information I started to check myself and began my own investigation. I eventually concluded that we were talking about maybe £200 million every year from the UK.
“The money coming into Sliven transformed the area. It did so in terms of property, but also people were buying designer clothes, and opening shops, casinos.
“I gave the information to the British police and they launched their own investigation into the gang.”
In court on Tuesday, Tom Little KC, prosecuting, said there were currently ongoing investigations in the UK into multiple other people suspected of involvement.
Detailing the scale of the fraud, he said: “The criminality involved, in total, many thousands of fraudulent claims for Universal Credit (UC) being made to the DWP and being paid out.
“Despite its scale, the fraudulent scheme of the three conspiracies was both simple to operate and highly effective.”
Universal Credit was introduced gradually from 2013 onwards in order to streamline previous benefits such as Child Tax credit, Housing Benefit and Income Support and is typically given to those on a low income or who are unemployed.
Mr Little told the court false claims were made for UC using real people who were “nearly always Bulgarian” and who “were complicit and also gained financially”.
He said: “The claims were supported by an array of forged documents and lies told to support the false claims.
“The forged documents included fictitious tenancy agreements, counterfeit payslips and forged letters from landlords, employers, schools and GPs.”
He said that most of the claimants “lived in Bulgaria and made claims in which they falsely claimed that they lived and worked here when they did not”.
He added: “Many travelled here for a short period of time to support the claim before returning to Bulgaria with the claim remaining ongoing. Some never even travelled here.”
The main architects of the fraud were, the court heard, Ali and Nikolova.
The gang would begin by finding “customers” in Bulgaria whose personal details they could use to fraudulently pretend they were living and working in the UK.
They would then produce an array of forged documents, including fictitious tenancy agreements, counterfeit payslips, and forged letters from landlords, employers and GPs.
Mr Little said that the gang also arranged “hundreds of cheap flights” for the fraudulent claimants so they could travel to the UK and attend interviews, or take pictures “proving” they were in the country and entitled to benefits if required.
Messages and images were exchanged on a WhatsApp group at the height of the fraud showing the gang making fun of the “naivety of the DWP”.
The DWP would sometimes ask for pictures of people outside properties with the front door open to prove they lived there.
The gang would take a picture of a fraudulent claimant outside an address and then Photoshop the image to make the door appear ajar.
They also developed a system involving the use of hundreds of burner phones that were passed to waiting customers using a bucket pulley system.
Over in Bulgaria, the city of Sliven, a once thriving industrial town famous for its textile industry, has recently been falling into decline.
Large so-called “ghettos” have been built on the outskirts and many of the city’s former factories have fallen into disrepair.
In recent years, the city has also become notorious as a source of young girls who are then trafficked into the sex industry.
Speaking exclusively to The Telegraph from the rundown offices of the organised crime division in Sliven before the sentencing, 47-year-old Mr Panayotov said he believed the gang had been making up to £200 million a year.
Once the benefits were approved, Mr Panaytov claimed the “customers” had to pay a one-off commission of between £500 and £800, after which they would receive on average between £2,000 and £2,500 a month.
He said: “Our investigation found that a few thousand people were customers of this scheme and it is likely that many are still receiving money through similar schemes.
“Nikolova had at least 5,000 to 6,000 customers and Ali was operating a similar scheme on a similar level.”
The Telegraph understands that the gang would allow the customers to receive benefits for two months, at which point they would start redirecting the money into their own accounts.
From that point on, they would take all the money for themselves and “commissioners” who helped find suitable candidates in Sliven.
Insp Panayotov said the small Bulgarian city had been “transformed” by the cash and that many of the customers had been “living like barons”.
Video and pictures shared with The Telegraph show people throwing wads of cash in the air. In another, they are seen paying a wedding singer €20,000 for one song.
While the Bulgarian authorities believe that the cash was laundered money, there is no evidence to suggest that the people in the video were aware of any crime being committed.
While showing The Telegraph the footage, Mr Panayotov said: “That is your money. That is British money.”
The officer said that the majority of the customers, and commissioners, were from the Roma minority community.
When The Telegraph visited the Roma areas of the city, many of the buildings appeared to be being developed into large “mansions”.
Mr Panayotov continued: “There are currently 30 casinos in Sliven. These casinos were mostly built by criminals who have a lot of money.
“The fraudsters are earning easy money and they spend their money easily, without any plans. They are living like barons.”
The Telegraph also visited the city of Plovdiv, around an hour outside Sofia, where Ali part owns a restaurant, and a business.
Ali fled Britain to Bulgaria but he was extradited back to the UK on Feb 25 last year to face justice.
In court, it emerged that Todorova and Nikolova had also tried, unsuccessfully, to flee the UK after their initial arrest in May 2021.
A man at the Dreams cafe in Plovdiv, where Ali was arrested, said that the money the gang had made “was crazy”.
He told The Telegraph he “would love to visit the UK”, adding: “Everyone wants to”.
In the UK, all of the five defendants, apart from Todorova, lived in and around the Wood Green area of north London.
After being tipped off by Mr Panayotov, the Department for Work and Pensions conducted its own investigation before launching a series of raids.
At Stoyanov and Nikolova’s flat, detectives found £750,000 in cash as well as a large amount of designer clothing, jewellery and watches.
Among them were two Emporio Armani watches, two Versace watches, Gucci shoes and a number of Chanel trainers.
At Ali’s home address more than £40,000 in cash was found, as well as a number of photographs of banknotes, a Tiffany ring and a video of him with a large amount of money.
Mr Panayotov said he could not understand how the scheme had gone on for so long without authorities in the UK noticing.
“At the beginning the British officers in the embassy said that was not possible,” he said. “Even our director was surprised at the scale of it.”
Following the arrests, Mr Panayotov said he was invited to celebrate at the late Queen’s Birthday party at the British embassy in Sofia.
He added: “A lot of people in Sliven hate me now”.
The DWP said its investigators worked to track and catch the fraudsters, gathering extensive evidence of false tenancy agreements and shell companies created to show false employment claims, including counterfeit payslips and GP notes. The group also created many false identity documents.
It described the case as “complex” with large amounts of intelligence needing to be worked through and police resources needing to be secured prior to arrest.
It said it stopped payments wherever possible once sufficient evidence was gathered.
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel
