How a Bulgarian Gang of 5 Stole $67.4 Million in UK's Largest Benefit Fraud

A gang of five fraudsters has been jailed for 25 years in the U.K. for falsely claiming over £53 million (~$67.4 million) in benefits. In what is dubbed as the largest benefit, money laundering-related scheme in England and Wales, the gang made thousands of false Universal Credit claims.

A group of three women and two men, all Bulgarian, used both real people and hijacked identities to make thousands of fraudulent claims between 2016 and 2021, as per the BBC .

Here’s How the Gang Stole Over £53 Million in Benefits

In the investigation, it was found that the group set up three 'benefit factories' across London to churn out the claims. The fake benefit claims were supported by a barrage of forged documents, which included fake tenancy agreements, counterfeit payslips, and mocked-up letters from landlords, employers, and GPs to trick the Department of Work and Pensions (DWP).

The fraudsters were persistent with their claims when they got rejected and they would try again and again until the applications were granted, the Crown Prosecution Service said in the court documents.

The gang also transported thousands of Bulgarians over to London, often by plane at their own expense, to make claims for Universal Credit. Their IDs would be used to start the claim and the application would be further supported by the fake documents.

As per the investigation, while the initial benefit payment, or some of it, was paid to the claimant, the recurring monthly payments were pocketed by the gang, who would often withdraw the claims in cash from hundreds of different bank accounts.

At the moment it is not known who these bogus claimants were, but some are thought to have returned home to Bulgaria immediately.

The Gang

One of the gang members, Galina Nikolova, started making fraudulent claims in 2016 before Brexit changed the rules on EU citizens claiming benefits. She worked alongside another Bulgarian, Gyunesh Ali. Apart from these two, Stoyan Stoyanov, Tsvetka Todorova and Patritsia Paneva, who are believed to be Ali’s employees, were also involved.

The scam was run from the back of a grocery store in London. Investigators suggest that Ali was the ringleader of the scam and he taught others how to defraud the welfare system.

The gang was able to take advantage of the benefits programme and in particular a relaxation of the benefit rules during the pandemic. When face-to-face checks for Universal Credit were stopped during the Covid restrictions, the number of people on the benefit almost doubled, to just under six million, in the four months, as per the BBC.

At the same time, fraud also soared with official figures showing that £10.2 billion (~$12.9 billion) was lost to fraud on Universal Credit between 2020 to 2022.

A Tough Scam to Unravel

The two-year investigation found a breakthrough after Nikola’s arrest in 202. The DWP investigation team and Crown Prosecution Service officials told BBC that this was the most complex case they have ever worked on.

The fraud was detected after investigators spotted repeating patterns in the applications. In May 2021, DWP investigators alongside officers from the Metropolitan Police raided three businesses in the Wood Green and Stoke Newington areas of north London, including Antonia Food.

Video footage of the raid was shared by the Crown Prosecution Service showing officers entering Antonia's Foods supermarket, the place that allowed the gang to hide in plain sight.

Mounting Evidence

Over three floors at Deluxe Advisors, which was Ali’s company, investigators found computers, with Universal Credit application pages open, filing cabinets full of claim packs, and folders containing records of the benefit claims, BBC reported.

Several hundred low-tech mobile phones and thousands of SIM cards were also found. The phones were labeled with the names and claim numbers of the applicants. For instance, two phones were used to make 100 fraudulent claims posing as numbers of bogus landlords.

A voice-changing microphone was also found which the investigators assumed was used to change the fraudster’s voice when a benefits official would call to check the details. They also found spreadsheets, with exact details for thousands of claims.

The court sentenced Nikolova to eight years, Ali to seven years and three months, Stoyanov, to four years, and Paneva to three years and two months in prison.