A complex fraud investigation into the mis-selling of energy saving products to vulnerable victims has resulted in seven prosecutions.
The investigation was led by officers from Essex Trading Standards with extensive assistance from National Trading Standards (NTS) and the Tri Regional Investigation Team (TRIT). The trials concluded earlier in the year and sentencing of the conspirators has now finished.
The victims were persuaded to buy supposed energy saving products and devices through four companies by mis-selling techniques.
The companies grew from Smart Save Solutions Limited, a solar panels sales company which, along with Director Carl Smith, was previously prosecuted by Essex Trading Standards in 2017. Trading then moved into four new companies, Greenpowersolutions Limited (“GPSL”), Green Planet Advisory Limited (“GPAL”), Offgridplus Limited (“OGPL”) and Green Power Energy Solutions Limited (“GPESL”).
None of the companies traded for very long and the period over which the mis-selling occurred was only 19 and a half months during 2016/2017. In that time the companies turned over £6.5 million.
There was extensive mis-selling of products related to the solar industry by the four companies. The products were “add-ons” to existing solar and electrical systems including battery systems, PV+’s, voltage regulators, new inverters and “kill” switches.
Nearly all of the victims, who were predominantly elderly and vulnerable, were cold called by telephone for a free system ‘health check’.
Once the ‘engineer’ called the sales started and various misrepresentations were then made persuading them to buy unnecessary products.
Witnesses were told that working equipment had failed or was about to, that existing devices were incompatible or inefficient, that unattainable savings would be made or that new regulations requiring the fitting of equipment were coming in that necessitated the purchase of equipment.
Kill switches were sold to elderly victims using scare tactics, with witnesses told that unless they purchased the products the Fire Service would not attend, or household insurance would be invalidated.
Whilst largely superfluous, some devices were mis-sold as a means of saving money. However, the equipment was vastly overpriced, with it typically sold for £3,500 when company records showed that the company was buying them for £245.
Salespeople were incentivised to overcharge victims by receiving 50% extra commission if they further inflated the sales price. Some salespeople earnt up to £1,100 commission on a single sale. The vast majority of the products were installed the day after the sales visit.
Many victims were targeted on more than one occasion with one purchasing eight products from the four companies and paying out just over £30,000.
In the largest investigation ever undertaken by Essex Trading Standards, evidence was gathered concerning 47 properties. During the course of the trial the Court heard from 40 witnesses, either live or by having their statements read, who had purchased the products and between them lost £290,184. These were just a sample of the overall number of victims.
By majority verdict the jury concluded that four of the seven defendants conspired together to defraud the consumers and were also guilty of laundering the extensive benefits obtained.
The remaining three pleaded guilty during the trials to lesser offences of money laundering, while two defendants were found not guilty by the jury.
Antony Dean, 42, of Waterson Vale, Chelmsford, was the director of GPSL, OGPL and GPESL. He was also the shadow director of GPAL, placing his wife as puppet director of the company. He received over £528,000 in payments from the companies.He was found guilty by the jury of Conspiracy to Defraud contrary to Common Law and Money Laundering under the Proceeds of Crime Act and sentenced to three years for each offence. The sentences will run concurrently. He also received a Directors Disqualification Order for 10 years and a Criminal Behaviour Order preventing him from being involved in any unsolicited direct sales business.
The trial judge, HHJ Griffith, said Dean was “instrumental in setting up all four of the Phoenix companies and was “one of the driving forces of this offending”.
Lewis Manley, 31, of Challock, Ashford was a prolific salesman employed by all the companies and was responsible for a third of all sales, receiving £377,534 in commission. He was found guilty by the jury of Conspiracy to Defraud contrary to Common Law and Money Laundering under the Proceeds of Crime Act and sentenced to two years imprisonment for each offence to run concurrently. He was also found to have breached an earlier suspended sentence, for which he received an additional 8 months sentence, totalling two years and eight months imprisonment. He also received a Criminal Behaviour Order preventing him from being involved in any unsolicited direct sales business.
HHJ Griffith said Manley was “at the very heart of the conspiracy as the human face” of the companies.
Darrell Smith, 30, of Penny Close, Colchester was found guilty by the jury of Conspiracy to Defraud contrary to Common Law and Money Laundering under the Proceeds of Crime Act. The younger brother of Carl Smith, Darrell was described by HHJ Griffith as “the beating heart of the conspiracy” and was responsible for the majority of the office management, installations and financial control of the companies. He received some £819,000 from the companies but the Court accepted that the majority (approx. £530,000) was funnelled to his brother, Carl Smith, and that Darrell was acting largely under Carl’s instruction and for his benefit. He was sentenced to two years imprisonment, suspended for two years for each offence to run concurrently and 150 hrs Community Service to be completed in 18 months.
Carl Smith, 37, of Clacton Road, Horsley Cross, pleaded guilty during the first trial under the Proceeds of Crime Act to Laundering £25,319 of payments received from OGPL. He was sentenced to twelve months imprisonment suspended for eighteen months and 150 hrs Community Service. He was also ordered to pay costs and compensation to victims totalling £50,000.
David Mayhew, 53, of Caelum Drive, Colchester, was found guilty by the jury of Conspiracy to Defraud contrary to Common Law and Money Laundering under the Proceeds of Crime Act. As a salesman for the companies Mayhew was responsible for some of the misleading statements and scare tactics used. He was sentenced to 18 months and 12 months imprisonment, suspended for two years, for each offence to run concurrently and 100 hrs Community Service to be completed in 18 months. He also received a Criminal Behaviour Order preventing him from being involved in any unsolicited direct sales business.
David Jenkins, 50, of Alder Drive, Chelmsford,was the Director of OGPL, office manager and link between the companies and the salespeople. He pleaded guilty on the first day of the second trial to Laundering £26,089 of payments received while the Director of OGPL under the Proceeds of Crime Act. He was sentenced to nine months imprisonment suspended for two years and 100 hrs Community Service to be completed in 18 months. He also received a Criminal Behaviour Order preventing him from being involved in any unsolicited direct sales business.
Emily Dean, 32, also of Waterson Vale, Chelmsford,was the Director of GPAL. She also received £8,620 in payment from GPSL and pleaded guilty under the Proceeds of Crime Act to laundering these funds on the first day of the second trial. She was sentenced to 100 hours Community Service to be completed in 18 months.
During sentencing at Southwark Crown Court the Judge, HHJ Griffith said the companies “phoenixed” from Smart Save Solution Ltd” and “I have no doubt, looking at the history of these four companies, together with their trading practices, that they were each a vehicle for fraud”.
Following the sentencing, Judge Griffith commended Essex Trading Standards for its efforts on the investigation.
Councillor Mark Durham, Essex County Council Cabinet Member responsible for Essex Trading Standards, said: “These prosecutions are the culmination of a huge amount of work from Essex Trading Standards and our partners. This was an extremely complex investigation, the largest Essex Trading Standards has ever undertaken, and clearly shows we won’t hesitate to take action where it is necessary to protect the public from fraudulent trading practices.
“I would like to thank everyone involved for their efforts and am proud to see this joint investigation come to a successful conclusion. It sends a clear message we won’t tolerate those looking to take advantage of elderly and vulnerable victims.”
Trish Burls, Chair of the NTS Tri Regional Investigation Team, said:
“It’s clear to see that profit and greed were the main drivers behind this multi handed fraud with defendants linked via a network of companies all with one aim and that was to make as much money as possible miss selling solar panels and linked products to identified and targeted victims.
“This has been one of the longest running and most complex cases our team have supported to date, and we are pleased to have been able to provide significant operational support to Essex Trading Standards to allow them to carry out their duty in bringing this offending before the court. This joint approach has allowed us to share the load and bring this investigation to a successful conclusion.
“Once again, this clearly highlights the value of partnership working and demonstrates that together we can successfully prosecute even the most complex and protracted of investigations and protect consumers across the country. Hopefully the sentencing will act as a clear deterrent for those engaged in this type of activity.”
Notes to Editors
1. Smart Save Solutions Ltd (SSSL), R/O & Trading address: 650 The Crescent, Colchester CO4 9QB Company Number: 07488586 was a seller of residential solar panel systems.
a. The offending spanned the 22nd July 2013 to the 21st January 2015 and involved the extensive mis selling of the solar panel systems.
b. Carl Smith was convicted on the 20th March 2017, by his neglect as a director, of a single offence of Engaging in an Unfair Commercial Practice contrary to Regulations 3 and 8 of The Consumer Protection from Unfair Trading Regulations 2008.
c. On the 8th December 2017 he received a sentence of 18 months suspended for 24 months and was ordered to pay costs and compensation to victims. He was disqualified from being a director for 10 years. Smart Save Solutions Ltd was also convicted.
2. Money Laundering offence: Acquiring criminal property, contrary to s. 329 of the Proceeds of Crime Act 2002
3. The terms of the Criminal Behaviour Order, designed to prevent future similar offending are:
“whether by himself or assisting, instructing, encouraging, procuring, or soliciting any other person) from doing the following:
Being involved in the process of making sales of goods or services directly to consumers in their homes, whether in person or by any other means where the means of making the appointment is unsolicited. For the avoidance of doubt, for the purposes of this Order, being involved in such a process includes (but is not limited to):
a) “Unsolicited” means where the appointment to attend the consumers home is made by cold telephone call, door knocking or any means other than one where the consumer has entirely instigated the appointment.
b) facilitating such a process by carrying out related administrative activities;
c) acting as a director, company secretary, or other officer of a company which carries on business using such a process;
d) being a partner in any undertaking which carries on business using such a process;
e) carrying out any part of such a process himself;
f) carrying out a role in which he has supervision and/or oversight, directly or indirectly, of any person whose job is to carry out any part of such a process;
g) carrying out any training for any person whose job is to carry out any part of such a process; and
h) carrying out a role in which he is required to deal with the proceeds, bank accounts, or accounting documentation of any company, partnership, or other undertaking which carries on business using such a process, regardless of whether any funds at any point come under his control through any means whatsoever, whether or not he himself has any direct contact with consumers.