Five sentenced following fraud case

The director and employees of an energy company that claimed to recover overpayments and VAT from UK energy suppliers for small businesses have been sentenced to a combined total of 13 years at Nottingham Crown Court today (Friday 30 August).

The sentences relate to offences of fraud, fraudulent trading and conspiracy to commit fraud when the group were working for Corporate Energy Support Solutions LTD (CESS) and its associated companies, Utility Advice Centre (UAC) and Utility Bill Saver (UBS).

Steven Ricardo (45) previously of, Chorley, Lancashire; David Michael Wilkinson (32) of Hucknall; Ian Frances McHugh (54) of Westward Ho, Devon; Max Thomas Bancroft (27) of Burnley and Brian Witty (76) of Hagley, West Midlands, were involved with defrauding small businesses by offering various services to obtain refunds of overcharges from their energy suppliers; obtain refunds of overcharged VAT on their behalf and charge commission; and apply for the renewal or transfer of small businesses’ energy supplies over a period of four years.

With the promise of the recovery of overpayments and VAT from UK energy suppliers, small businesses and consumers paid an advance fee to the company in the hope of a refund for overpayments that actually never existed.

Steven Ricardo was sentenced in his absence to six years (Count 1) and two years (count 5) imprisonment, to run concurrently, meaning that he will serve four years in prison. David Wilkinson was sentenced to two years and will serve a year in prison. Ian McHugh was sentenced to two years and will serve a year in prison. Max Bancroft was sentenced to 12 months imprisonment, suspended for 18 months and 200 hours' unpaid work. Brian Witty received a conditional discharge for the next 12 months.

The judge recognised that while the detriment was in the region of £1.6m, the sentences were based on the 770 known complainants and their losses.

At different times between January 2011 and December 2015, one or more of the defendants were involved with the following offences:

• Attempting to secure a refund payment for customers from an energy supply company fraudulently stating they would secure a refund from a customer’s energy supplier when no such refund was due.
• Fraudulent trading by
  • Submitting applications for VAT refunds to energy supply companies without the knowledge and or consent of the customer;
  • Submitting such applications without agreeing the level of charge or commission to the customer;
  • Supporting such applications with forged and or digitally altered and manipulated documentation;
  • Making unwarranted, intimidating, aggressive and persistent demands for payment of a commission
• Conspiracy to commit fraud by submitting false recordings of verbal agreements with customers claiming to authorise access to customers’ energy account details or act on behalf of customers in renewal negotiations.

Many of the victims paid between £300 and £400 to secure non-existent refunds. Clients were then unable to contact CESS Ltd who defrauded its victims to the tune of £1.6 million, including more than 770 victims.

The National Trading Standards Regional Investigation Team (East Midlands), hosted by Nottinghamshire County Council was assigned this case by National Trading Standards in 2014. CESS Ltd's criminal activity was nationwide, and at one time their call centre was based in Nottinghamshire.

Mrs Ellis, licensee of the Royal Oak at Chesterfield, stated:

"This company were just one of many that pestered us with cold calls on a regular basis. They said that we had been overcharged by the energy companies and that their scheme was a government backed scheme to make them (the energy companies) repay the overcharge. It was to go back seven years or more and I could be due to several thousands of pounds refund.

"They sent a representative round who was smart, very plausible, I wasted a couple of hours with him telling me how much I was going to be able to reclaim. "I paid £325, money I could not really afford to lose.

"After paying all I got was them trying to sell me a VAT refund. I kept telling them I was VAT registered and when I asked about my refund they told me someone else was dealing with that.

"It caused me lots of stress and wasted a lot of my time with wasted telephone calls. My advice to anyone out there is there is no government scheme. It is all a scam don’t fall for it."

Mr Ford, a retired Licensee from Northampton, commented:

"CESS Ltd contacted me saying they were working with small businesses such as mine to reclaim overpayments on energy bills. They drew an analogy with the PPI issue in the financial sector. It sounded legitimate. I initially paid £325 with them saying 100% of any refund would come to me, the customer.

"In addition to obtaining a refund they said they could also manage my account for me to obtain the best tariff. This turned out to be of no benefit to the business at all. They even sent round a representative who claimed they would obtain a refund on my VAT payments made.

This resulted in costing me £1673.05 in commission charges paid to UK Energy Solutions and Services Ltd.

"You go through a period of mixed feelings and think you will get money refunded and end up enjoying additional costs.

"Even worse they actually cancelled my standing order without my knowledge and I ended up owing £3000 to the energy company because no payments had been made.

"I am pleased justice has been done. My message is beware, you learn from these events, exercise a great deal of caution if you are approached."

Councillor John Handley, Vice-Chairman of Communities and Place Committee at Nottinghamshire County Council said:

“I welcome this outcome. The director and employees of CESS LTD and its associated companies were found guilty on three counts.

“This elaborate scheme was solely designed to trick small business owners into paying for services that did not exist. These people trusted CESS Ltd to secure refunds of overcharges from their energy supplier, but the refunds never materialised. They also charged exorbitant commission and provided the energy supply companies with false documentation.

“We hope these prosecution and sentences send out a clear message to other traders that we will not tolerate fraudulent practises. We will pursue anyone who attempts to operate in this manner, which causes distress to those affected.

"Our advice to business owners is always to check with your energy supplier directly and do not just take the word of a cold caller. If an offer looks too good to be true, it usually is."

Lord Toby Harris, Chair, National Trading Standards, said:

“This case affected hundreds small businesses across the country. Given the scale of the fraud and its national significance, we invested extensive time and resources in this case. The sentences are a powerful reminder that we will support and protect legitimate businesses and continue to prosecute fraudsters and money launderers.

“I would like to take this opportunity to congratulate the team for their hard work in bringing about these prosecutions and sentences.”