A man who set up sham energy companies to rip off small businesses has been handed a 13-year jail sentence following a complex and lengthy investigation by the National Trading Standards Regional Investigation Team (North West), which is hosted by Cheshire West and Chester Council.
Andrew Pilley, who owns Fleetwood Town Football Club and a range of other businesses, was sentenced following a hearing at Preston Crown Court on 4 July.
During sentencing, His Honour Judge Knowles KC remarked that Pilley’s story is ‘a sordid tale of squalid lies, greed and fraud’. At the heart of the case was a web of interconnected companies that misled small businesses across the UK. Through sham company structures associated with Business Energy Solutions Ltd, BES Commercial Electricity Ltd and Commercial Power Ltd, Pilley and his associates were responsible for targeting small business owners and deceiving them into signing long-term energy contracts between 2014 and 2016.
Pilley was remanded in custody in May after he was found guilty of fraudulent trading, fraud by false representation and being involved in the acquisition, retention, use or control of the proceeds of fraudulently mis-sold energy contracts.
Pilley (52)of Thornton Cleveleys, Lancashire, was sentenced to 13 years in prison and disqualified from being a director for 13 years. He was found guilty of two counts of fraudulent trading – including causing or allowing fraudulent mis-selling of energy supply contracts and concealing this from customers and regulators.
He was also found guilty of being concerned in an arrangement which facilitated the acquisition, retention, use or control of criminal property, as well as fraud by false representation based on posts on MondaySavingExpert.com and Ise.co.uk which falsely purported to be made by customers.
Accomplices Michelle Davidson (49) was sentenced to six years in prison and disqualified from being a director for nine years, having been found guilty of fraudulent trading and being concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by another.
Lee Andrew Qualter (52) was sentenced to seven years in prison and disqualified from being a director for nine years, after being found guilty of fraudulent trading, and Joel Chapman (37) was sentenced to eight months in prison after being found guilty of fraud by false representation.
The fraud worked through a telesales operation – described by the judge as ‘a salesforce of cold-calling liars and manipulators’ – which was run by companies that appeared to be independent with Qualter as the sole director, but were actually controlled by Pilley and his sister Michelle Davidson, who were the directors of the BES energy supply companies. The sales companies targeted small businesses and charities – including guest houses, a children’s cancer charity and companies providing support services for disabled people – as they moved into new premises or when their energy contracts were up for renewal.
In the initial ‘front end’ part of the call, the sales representative would lie about the contracts to persuade business owners to sign-up. The fraudulent mis-selling included false or misleading statements about the length and price of the contract as well as competitor rates. Business owners were then transferred to a different sales representative who would run through terms and conditions and confirm the agreement. This was a binding verbal contract and, because it was a business-to-business sale, there was no cooling off period. The fraud worked because the vast majority of customers didn’t realise they had been misled at the point of entering into the verbal contract.
Between 2010 and 2015, annual turnover in the two BES companies grew from around £15m to £75m. By 2019, turnover was more than £100m and combined profits were between £2m and £12m.
The NTS criminal investigation followed previous warnings and investigations from enforcement bodies, including Blackpool Trading Standards and Ofgem, before the current Trading Standards case began as a mis-selling investigation commenced by Lancashire Trading Standards in December 2013.
During sentencing, His Honour Judge Knowles KC said: “Cold-calling liars and manipulators duped very large numbers of honest and decent proprietors of sandwich shops, hair salons, small hotels and the like into long and expensive contracts for their gas and electricity. The bills they had to pay came to tens of millions of pounds…Pilley devised and enforced an elaborate pretence that the sales team were independent of the supply companies. The truth was that he owned them and he called the shots. Michelle Davidson…knew of the pretence and the reasons for it and she let the money pour in.”
Lord Michael Bichard, Chair, National Trading Standards, said: “Small business owners were deliberately deceived and locked in to long-term and expensive energy contracts, leaving them struggling to pay the bills and causing many businesses to go under.
“These sentences send a strong message that crime does not pay, even for influential and well-known individuals like Andrew Pilley. It has been a long and complex case and I would like to take this opportunity to thank and congratulate the Trading Standards officers involved for their commitment and perseverance to protect honest customers and safeguard legitimate businesses.”
Councillor Christine Warner, Cabinet Member for Homes, Planning and Safer Communities at Cheshire West & Chester Council, said: “Using a number of businesses based in Blackpool, Bispham and Fleetwood, Pilley and his associates targeted small businesses across the Country with no regard to the damage of locking them into long-term energy contracts, based on false information would cause for their owners and employees.
“Thanks to a tireless investigation by the Trading Standards North West Investigation Team hosted by Cheshire west & Chester Council, the criminals behind the fraud have been brought to justice and stopped from defrauding even more businesses.
“This verdict is a testament to the persistence of the Trading Standards Officers who pursued this investigation over several years and sends a clear message that these crimes will not be tolerated.”