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Judge orders defendant to pay back £90,000 after Right to Buy fraud

A defendant who admitted fraud under the Right to Buy scheme has been ordered to pay back more than £90,000.

At Newcastle Crown Court in July 2020 Monica Li was given a 10-month prison sentence suspended for 18 months.

She had purchased her council house valued at £65,000 from Your Homes Newcastle in 2011 for £40,950 successfully applying for a £24,050 discount on the strict condition that the property was her principal home.

However instead of living in the two-bed property, she was living in another house in Sunderland. After buying the property at a reduced price due to the Right to Buy discount, she then rented it out. 

At a Proceeds of Crime hearing this month (8 March), Li, aged 44, of Wetherall Close, Sunderland, was ordered to pay back £90,950.

The judge took into account the discount Li received at the time of the purchase, the rental income, appreciation in the value of the property over 10 years and other assets she had accrued.

Li was also ordered to repay £90,950 within three months which can be extended to six months to allow the house to be sold. Under the Proceeds of Crime Act if funds are not repaid a defendant can be committed to prison.

The prosecution was brought by Newcastle City Council on behalf of Your Homes Newcastle (YHN).

Cllr Linda Hobson, Newcastle’s Cabinet member for housing, said: “The case was investigated by our internal fraud team who now have the resources to investigate and pursue cases like this and tenancy fraud.

“Purchasing a council house fraudulently by claiming a discount and then renting it out while living elsewhere is indefensible – especially when there is such a need for affordable social housing. It’s morally wrong, dishonest, and has severely backfired in this instance.

“I hope this case sends out a strong message to anyone thinking of doing this – or may be doing it – that if we catch you, we won’t hesitate to prosecute you, and the financial penalties can be life changing.”

Tina Drury, Managing Director of YHN, said: "I hope this action reassures our customers that we always do everything in our power to protect the council's assets so those in genuine need can benefit from them.”

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