£700,000 con hit small businesses
THREE men involved in a scam which duped small businesses out of more than £700,000 have avoided jail.
Stoke-on-Trent Crown Court heard yesterday the defendants were involved in the running of a number of businesses which purported to be publishers of drug awareness leaflets and booklets for school pupils.
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Hundreds of businesses from across the country agreed to sponsor the publication of booklets as they believed they would be helping to educate youngsters about the perils of using drugs.
They handed over money but hardly any booklets were sent to schools.
The businesses operated in call centres in Stockport and Stoke-on-Trent. One was based at Staffordshire University business village and another at Stoke-on-Trent City Council-owned Burslem Enterprise Centre.
Prosecutor Patrick Field said: "Telesales workers would select at random small businesses from yell.com or the Yellow Pages and call them. They would persuade them to sponsor the publication of a number of drugs awareness booklets, which could be sent to a school of the sponsor's choice."
Mr Field said the operators used scripts which had a persuasive sales pitch.
The court heard businesses could pay up to £299 for booklets.
"Sample booklets were sent to the donor to give the appearance the promise was being met," said the prosecutor.
"But invariably no booklets were sent to the schools concerned. In the main, the promise was never kept. The defendants never intended to keep the promise. They intended to cheat the small businesses out of money for the purpose of gain."
The offending spanned from January 2005 to November 2007, and netted in excess of £700,000.
The Crown's case was that Peter Kemp, aged 44, of Ack Lane East, Bramhall, Cheshire, was the "prime mover". He had pleaded guilty to conspiracy to obtain by deception and conspiracy to commit fraud. He failed to turn up at court yesterday and a bench warrant was issued for his arrest.
Michael Schaffer, aged 23, of Didsbury Road, Stockport, admitted the same two charges.
Dennis Earle, aged 33, of Heath Street, Chesterton, and Christopher Gibbs, aged 24, of Newmarket Road, Ashton-under-Lyne, pleaded guilty to conspiracy to commit fraud.
Mr Field said Kemp set up the businesses, recruited telesales staff, drafted the scripts and set up and organised the call centres.
Schaffer and Gibbs started off as telesales workers but their level of involvement changed when they signed their names on office leases and opened bank accounts.
Earle was described as a "foot soldier".
Alison Downs, defending Earle, said the married father-of-two had been naive and stupid, and was remorseful.
The judge sentenced all three to 12 months in prison, suspended for two years, with 250 hours' unpaid work.
A proceeds of crime hearing will be held on a date to be fixed.
13 Comments
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by Mr Man, stockport
Wednesday, February 17 2010, 4:31PM
“Listen you idiots, michael schaffer is a good friend of mine. now there were 4000 books i seen with my own eyes. as did trading standards. yes the books hadnt been sent out at the time trading standards arrived but they were getting sent. the reason they pleaded guilty is they were offered a lower charge....called a plea bargain. so why dont you all get off your high horses get your heads out of your a***s. and post on something else you sad pathetic losers!”
by Jim, Lightwood
Tuesday, September 29 2009, 3:57PM
“No name of the judge then?? He clearly wants "no publicity" for this amazing decision. They have got away with it and we get judges who often couldn't explain what planet they live on let alone the reason for some of their decisions. The whole justice system is a joke when sentences lie this are handed down. Bet they couldn't believe their luck.”
by Gary Elsby, Baddeley Green
Tuesday, September 29 2009, 1:18PM
“Everyone, eventually comes to agree with me Jon, for that is my quest. Welcome aboard, your membership is free and it is for life.”
by Jon, Newcastle
Tuesday, September 29 2009, 12:32PM
“Crikey, for once I agree with Gary Elsby!! My sentiments exactly!
I also have a company that has been contacted by these types of people and we always say no, although we probably reject genuine causes too as we are naturally suspicious.
Magneto - as for the PRS, don't get me started. Earl;ier this year we had 3 phone calls and 4 letters in the space of 2 weeks. Now they are rip-off merchants!”
by Gary Elsby, Baddeley Green
Tuesday, September 29 2009, 10:41AM
“A Company Director of a legitiamte Company who stole £700,000 from his own Company would be jailed. The money should be returned to the Companies concerned and any shortfall confiscated from personal posessions. Then jail them.”
by Andrew, Longton
Tuesday, September 29 2009, 10:34AM
“Mangeto
Yes I agree with you, the PRS is ridiculous.
And the PPL”
by magneto, shelton
Tuesday, September 29 2009, 10:04AM
“These people tried to sell me some sponsorship, and were very plausible. Opening gambit was would you support us again as you have in the past. Another approach was to claim you had previously agreed to sponsor, and the publication was now about to be printed. My normally shaky memory worked, and after a quick internet search it was apparant that it was highly likely to be a scam. What with all the government stealth taxes, and these regular fraudsters business in a minefield.
If you want a scam on a grand scale, maybe The Sentinel could investigate the Performing Rights Society - every UK business having to pay from £80 up to have the radio on!!! Non-profit making business yet they have 300 directors, some on £300,000 a year. The vast majority of artists get a pittance from them but the superstar elite get millions. They are secretive and employ a heavy handed debt collection agency to rake in the cash. The fact that we already pay a licence fee should be enough. Please someone - expose this national rip off.”
by caz, stoke on trent
Tuesday, September 29 2009, 10:04AM
“We were actually called bythese thieves and they were very professional sounding.However due to a previous bad experience with a similar scam we refused the offer.Whilst I dont condone for a minute benefit/council tax fraud how
on earth can people deliberately and systematically steal nearly a million pounds and not face prison?”
by Andrew, Longton
Tuesday, September 29 2009, 9:54AM
“I own a small business, and I was contacted by these people for advertising, I initialy agreed, but then as I operate on a very tight budget, (no credit cards) I decided to pull out, the grief that I got from them was beyond belief, they even rang me back and called me a To55er, funny that ay, they were trying to rip me off yet got upset cus \I said no.
What is the world coming to.
Cant believe they didnt go to jail though. fraud is fraud, whether its benefit or business, laws are there for a reason. bet they were drunk last night celerbrating.
Naive and stupid is what the defending concil called them.
No thats the bench and judge
Naive and stupid”
by Alan, Staffordshire
Tuesday, September 29 2009, 9:41AM
“Why weren`t they sent to prison????
We alll know why ;-)”