Pilley sentencing date set for 3rd of July as scale of fraud by Fleetwood Town owner emerges
Andrew Pilley, the owner of Business Energy Solutions and Fleetwood Town Football Club amongst a range of other businesses, will be sentenced on 3rd July 2023 following a hearing in Preston Crown Court today [Tuesday 23 May].
He and his co-defendants have been been remanded in custody after they were 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.
Further details of the fraud have now been made available following the conclusion of the seven month trial on Friday.
At the heart of the fraud was a web of interconnected companies that misled innocent 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.
Following a complex and lengthy investigation the jury delivered its verdict on Friday 19 May 2023 at Preston Crown Court and found Pilley guilty of two counts of fraudulent trading – including causing or allowing fraudulent mis-selling of energy supply contracts and concealing this from customers and Ofgem and/or the Energy Ombudsman; being concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by another – namely the proceeds of fraudulently mis-sold energy contracts; fraud by false representation based on posts on MondaySavingExpert.com which falsely purported to be made by customers and contained fabricated content.
Pilley’s sister Michelle Davidson and Lee Andrew Qualter were also convicted with Pilley of fraudulent trading while Joel Chapman was found guilty of fraud by false representation.
The successful prosecution follows an investigation by the National Trading Standards Regional Investigation Team (North West), which is hosted by Cheshire West and Chester Council. The 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.
A spokesman for trading standards, who brought the prosecution said: “The fraud worked through a telesales operation 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, children’s charities 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.”
Evidence shows that the majority of energy contracts sold by the telesales companies went to Pilley and Davidson’s BES companies. By 2014, the volume of business which was being placed with BES was 76%, rising to 86% in 2015 – with longer and more valuable contracts going to BES and the less valuable contracts going to other suppliers.
Between 2010 and 2015, annual turnover in the two BES companies grew from around £15 million to £75 million. By 2019, turnover was over £100 million and combined profits were between £2 million and £12 million.
Lord Michael Bichard, Chair, National Trading Standards, said: “Small business owners were deliberately deceived and locked in to contracts that were long-term and expensive, leaving many businesses struggling to pay the bills and sadly driving some business owners into making the difficult decision to cease trading.
“This is not a victimless crime – small business owners have lost vast sums of money to this fraud and many businesses have gone under. Legitimate businesses in the energy market have also lost out by missing out on energy contracts there were diverted to the BES companies.
“This 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.”