This is the Bulgarian ghetto where millions of pounds of taxpayer’s money was sent as part of Britain’s largest ever benefits scam.
A gang of five Eastern Europeans were jailed last week after making 6,000 false claims for Universal Credit as part of a five-year scam that cost the British taxpayer at least £54million.
Many of the claimants – often illiterate and unable to speak any English – came from Nadezhda, a notorious Roma gypsy area surrounded by abandoned factories on the edge of Sliven, a city in the foothills of the Balkan mountains.
When visited the slum, luxury Mercedes, Porsches and BMWs weaved their way along dusty unpaved roads alongside ramshackle horse and carts.
Casinos and jewellery shops sit in stark contrast to neighbouring market vendors selling fruit and veg, meat, cheeses and basic cooking equipment.
Nadezhda, described by one former resident as ‘like no other place in Europe’ is home to 20,000 occupants. Like a city within a city, it is separated from the rest of Sliven by a high wall and railway lines and is accessed by a narrow graffiti-lined underpass.
Bulgarian police first rumbled the scam after noticing a sudden influx of wealth flowing into the area – where many survive on 900 Lev (£392) per month – with three and four storey mansions replacing ramshackle dwellings and 30 casinos opening in the city.
Inside the wall, one four-storey mansion boasted ornate golden railings and outside was parked a Porsche Panamera which when new cost up to £142,000.
On another street our reporters spotted a £58,000 BMW M340 with UK number plates while in the main square a £76,000 Porsche Cayenne was parked.
There is no suggestion these cars were bought through proceeds of the fraud and locals insist many in the community work legitimately around Europe to earn money, often in the construction industry.
Speaking exclusively to , local resident Christina who spent five years living in Boston, Lincolnshire, said gang members had exploited lax work from home rules during Covid to sign up thousands of applicants who were not required to appear in person to receive cash.
She said: ‘The gangs took advantage of Covid because there was no need to show up in person to ask for benefits. It was much easier to organise a scam with big numbers and not bring them to the UK.’
Claimants were also able to apply for child benefits for infants that they were not caring for with scant checks, locals said.
Community members claim the gang’s ringleaders do not come from Nadezhda but ‘bought’ the identities of desperate people who do live there.
But Inspector Vassil Panayotiv – who first alerted the British authorities after finding thousands of people were living like ‘barons’ claiming up to £2,500 per month from UK taxpayers said ‘customers’ would pay the gang a one-off commission of up to £800 and would then receive the monthly benefits.
Christina’s husband Manal – who worked in a food packaging plant while living in the UK before deciding to move home – said: ‘This has been discussed in the community that members of the ring are not from Nadezhda. They have connections here but they are not from here.’
In the main square, construction worker Georgi and his son Memo were selling homemade cheese to locals from buckets in the back of his battered Volvo estate.
Georgi says he was not involved in the scam and believes it has brought shame on his community.
He said: ‘I feel deeply ashamed of what happened, I feel embarrassed by the criminal deeds of other people that people in the UK associate with everybody here.
‘Probably the money is too much for people, even living in the UK but in Bulgaria this is a very significant amount of money.
‘From a social point of view it seems like a great system and if I was in Britain and eligible I would try to make use of it if I had the right to.
‘But to scam people is a sin before God and it turns a whole community into scapegoats and makes black sheep of us even though most people are just trying to make honest money.
‘Because of a rotten few we are all pointed to as scammers and it’s very very detrimental to us here.’
After the fraud was reported to the British Embassy in Sofia in 2021, police conducted a series of raids across North London that identified three ‘benefit factories’ in the Wood Green area where repeated claims originated.
At Wood Green Crown Court last week Bulgarian nationals Galina Nikolova, 38, Stoyan Stoyanov, 27, Tsvetka Todorova, 52, Gyunesh Ali, 33, and Patritsia Paneva, 26, all admitted stealing £54million of benefits and money laundering and were jailed for between three and eight years.
The court heard the benefits recipients in Bulgaria ‘were complicit and also gained financially’ from the scam.
One of the hubs was behind a functioning corner shop selling groceries. The group appeared to be hiding in plain sight – posting photos on social media smiling and posing behind the counter of Antonia’s Foods supermarket in Wood Green.
The enormous haul of money gained from their ‘complex financial web’ of claims was laundered through a number of accounts, then withdrawn in cash – with £750,000 in bank notes found stuffed in suitcases at one of their homes.
Investigators who arrested the gang and searched their properties also discovered hundreds of ‘claim packs’ containing forged and false documents, and more than 900 digital devices.
Prosecutors said the gang used the benefits system ‘like a cash machine’ and on one of the seized mobile phones was a video showing the fraudsters showering their flat with hundreds of £20 notes.
They used their ill-gotten gains to fund luxury lifestyles, buying designer clothes, watches and even a high-end Audi sports car. On social media they shamelessly flaunted expensive spa breaks and posted snaps of them holidaying abroad.
Since the crackdown, the building of new mansions has slowed.
Sliven, Bulgaria’s eight largest city, used to boast a textiles industry so successful it was known as the Manchester of the Balkans. But when the factories closed and fell into disrepair jobs disappeared and it slumped to become one of the poorest.
Despite this, the city boasts 30 casinos that Mr Panayotiv says are funded by organised crime as well as shops selling designer sunglasses and clothes.
Martin Zaimov, a politician in Sliven, said exploitation in the slum was rife with corrupt electors buying Nadezhdans votes for as little as £3 – so it’s little surprise gang leaders would be able to buy people’s identities to use in the fraud.
He said: ‘Nadezhda means hope which is a somewhat ironic and hypocritical name. I am sure there is some form of hope there but I don’t think people who live there would name it that.
‘If British people think their benefits are too generous, why would anybody here think any differently?
‘Just like the Bulgarian system it was created with good intentions but at some point it gets too large. Benefits in Bulgaria are very strict, they are limited in time and what you will get is some scant minimum. It’s nothing comparable in terms of levels to what you would get in the UK.’
Their criminal convictions mark what is the largest benefit fraud prosecution and investigation ever brought to the courts in England and Wales.
But Mr Panayotiv believes the convictions barely scratch the service and his investigation suggests the gang was making up to £200 million per year.