Andrew Pilley sentenced to 13 years in prison for fraud

Andrew Pilley, who was found guilty in May on four counts of fraud relating to the mis-selling of energy contracts, has been sentenced to 13 years in prison.

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.

Andrew Pilley, aged 52 of Thornton Cleveleys, was sentenced to 13 years in prison and disqualified from being a director for 13 years, having been 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 Ofgem and/or the Energy Ombudsman – which led to nine-year and three-year sentences
• 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 and Ise.co.uk which falsely purported to be made by customers and contained fabricated content – which led to a one-year prison sentence

Michelle Davidson was sentenced to six years in prison and disqualified from being a director for nine years, having been found guilty of:

• Fraudulent trading
• Being concerned in an arrangement which facilitates the acquisition, retention, use or control of criminal property by another

Lee Andrew Qualter was sentenced to seven years in prison and disqualified from being a director for nine years, after being found guilty of fraudulent trading.

Joel Chapman 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.

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 per cent, rising to 86 per cent 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 £15m to £75m. By 2019, turnover was over £100m and combined profits were between £2m and £12m.

The sentences follows an investigation and successful prosecution 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.

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 of 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.”

Pilley is also the owner of Fleetwood Town FC. The club has been working with the English Football League, as he may now not pass its Owners' and Directors' Test.

The club said: "Fleetwood Town Football Club acknowledges the sentencing in the court case involving former club chairman, Andy Pilley.

"The club would like to reiterate convictions are against individuals and not Fleetwood Town FC, or any of the businesses associated with them, and will continue to operate as normal.

"Fleetwood Town remain in communication with the EFL and will be making no further comment at this time."