Inside the Bulgarian town that cashed in on Britain’s biggest benefits fraud

Sliven, located in the foothills of the Balkan mountains, was recently discovered as the epicentre of a benefits fraud
Sliven, located in the foothills of the Balkan mountains, was recently discovered as the epicentre of a benefits fraud - Geoff Pugh

Locals call Sliven, a small Bulgarian town in the foothills of the Balkan mountains, the “windy town”. And for some of its residents, the wind has been blowing in a particularly favourable direction.

Once a prosperous place built on the proceeds of the textile trade, it had become increasingly dilapidated and down on its luck in the decades after the dissolution of the Soviet Union.

That is until four years ago, when its fortunes mysteriously changed for the better. Few could have guessed why at the time, but it now turns out the city –  some 1,700 miles from London – was at the epicentre of the biggest benefits fraud Britain has ever seen.

This week, five Bulgarian nationals – Galina Nikolova, 38, Stoyan Stoyanov, 27, Tsvetka Todorova, 52, Gyunesh Ali, 33, and Patritsia Paneva, 26 – were sentenced to a combined total of 25 years and five months in prison for stealing more than £50 million from the British taxpayer.

Patritsia Paneva, Gyunesh Ali, and Tsvetka Todorova, all pleaded guilty to fraud
Patritsia Paneva, Gyunesh Ali, and Tsvetka Todorova, all pleaded guilty to fraud

Over a four-and-a-half-year period, the gang ran a fraud operation on an “extraordinarily large scale” out of premises in Wood Green, north London. From there, they recruited “customers” residing in towns and cities in Bulgaria who fraudulently claimed to be living or working in the UK in order to receive Universal Credit payments, some totalling thousands of pounds.

It is thanks to Vassil Panayotov, a lone inspecting officer belonging to the Bulgarian organised crime force’s outpost in Sliven, that the group were eventually caught. In 2020, as the world confronted the menace of the Covid pandemic and Bulgaria locked down, Panayotov noticed that a suspicious number of locals in the town were newly wealthy and “living like barons”.

Local officials operating in Sliven today report the same, noting an influx of wealth in recent years that has brought with it new-build properties, sports cars and a growing number of casinos.

One told The Telegraph on May 30 of having a “huge impression of how the standard of living had increased”. People who had been living in “poverty”, he said, were suddenly living in “extreme luxury.”

“They saw cash and were eager to spend it… on parties for 100, 200 guests, houses, luxury cars,” the local official said.

The Wood Green gang’s fraud was effectively a pyramid scheme, with its leaders at the top, an unspecified number of lower-ranking associates in the middle, helping them find suitable candidates, and the thousands of people who provided their personal information in exchange for benefits at the bottom.

Those who allegedly benefited most in Sliven were the “fixers” in the middle, who the local official says were investing in property, vehicles and gold. “Most people who were [targeted] didn’t even realise they were part of a criminal organisation,” he says. “They were caught by the simple question: “Do you want £2,000 a month?”

When the ringleaders were caught, many of those involved in the scheme said they had been unwittingly implicated in – and benefited from – the fraud, the local official claims.

“In 2021, when [those responsible] were arrested, the people receiving benefits here were shocked,” he says. Wood Green Crown Court, however, was told this week that the benefit claimants were “complicit”.

One of the areas which appears to have been particularly targeted by the gang is Nadezhda, a mostly Roma neighbourhood on the outskirts of Sliven.

Home to roughly 30,000 people, it is one of the largest settlements of its kind in Bulgaria and sits precariously placed on the side of a main road, next to abandoned textile factories.

Among its overcrowded streets there are conspicuous displays of wealth in an otherwise rundown and impoverished district – a legacy, it seems, of the booming trade in benefit fraud that officials say enriched some of the people who live here.

The Roma enclave of Nadezhda was the most targeted area by the gang's activities
The Roma enclave of Nadezhda was particularly targeted by the gang's activities - Geoff Pugh

Among a host of older three-door cars and dilapidated family vehicles are a sprinkling of newer Audis and Mercedes parked on roads riddled with potholes. Other incongruities include large new houses springing up, including one sizeable property with ornate gates and decorative tiles just round the corner from a sheep tied to a lamppost. A crystal chandelier can be glimpsed through the window of another home, and a third, vast and newly-renovated family home tiled in green marble has been built next to a dilapidated shed.

But now the crime has made the national news in Bulgaria, locals seem to have closed ranks, both in Nadezhda and other more affluent parts of town, including in its leafy central district, where groups of people spill out of a wine bar onto a tree-lined square in the early summer sunshine. No one appears willing to admit to knowing anything about the case.

An array of taxi drivers, local officials, shopkeepers, and casino workers all either refused to speak to The Telegraph, or quickly denied any knowledge of the fraud, before hurrying away.

“I know of several people who live and work in England, but they all do so legally,” insisted one Nadezhda resident, who didn’t wish to be named due to sensitivities surrounding the case.

For Panayotov, whose suspicions were piqued four years ago by the town’s flashes of opulence, the reality of his findings was shocking, even to himself.

“I received information from contacts that hundreds of people were receiving social benefits from the United Kingdom [exploiting] weaknesses in the British social system,” he said earlier this week. “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.”

It had been found that the gang were using middlemen or “commissioners”, many of whom are thought to have been based in Sliven, to systematically recruit and claim Universal Credit for thousands of people living in Bulgaria. Their benefits claims were supported by a shocking array of forged documents: fictitious tenancy agreements and letters from landlords, counterfeit payslips and fake letters from employers, schools and GPs. Some even travelled to Britain for a brief stint.

Once the money began flowing, the gang and their “mediators” would step in to syphon off the cash.

In Sliven, it certainly appears clear that the influx of money has benefited the few, not the many.

In fact, all it has done is tarnish the reputation of a town that was already down on its luck.