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3:41 pm, March 10, 2010
Publishing scam raked in more than £740,000
Three Bolton-based companies which used misleading sales practices in a publishing scam raked in more than £740,000 before they were shut down.
Fairchild Publications Ltd, Hogan-Reynolds Publications Ltd and Smithson Publications Ltd, which produced booklets covering child safety issues, have been wound up in the High Court following an investigation by Company Investigations of the Insolvency Service.
The companies, run by the Fearn family, solicited sponsorship for the booklets of about £200 for 30 booklets, which were then sent unsolicited to schools.
Four members of the family: Susan Fearn, Wayne Fearn, Gareth Fearn and Eddie Fearn, ran the three companies, the court heard.
Nominated company officers not belonging to the family were appointed while the Fearns were engaged in some other capacity.
Investigators found the appointed company officers were found to have little knowledge of the day to day running of the businesses.
In a news release, the Insolvency Service said the companies used “a host of misleading sales practices” to obtain payment from sponsors, including deceiving businesses into believing that they had previously agreed to sponsor booklets; representing that the booklets were of benefit to schools when, in fact, the booklets were compiled from information freely available on the internet and were unsolicited by schools; and representing that they were acting for a charitable purpose or cause when, in reality, they were private companies operating for profit.
The misleading sales practices were compounded by aggressive and persistent debt collection tactics causing numerous businesses to pay for sponsorship that they had not agreed to.
Fairchild Publications Ltd had received payments from sponsors of at least £636,000 and Hogan-Reynolds Publications Ltd received payments of at least £107,000. Little of this money was spent on the production and distribution of booklets. Instead it was used to fund payments to those in control of the companies and their telesales staff, with the companies adopting wage payment methods which facilitated tax evasion, such as the systematic use of cheque cashing services and the use of false employee names to withdraw cash from the companies.
Fairchild Publications Ltd and Hogan-Reynolds Publications Ltd ceased trading and were abandoned during the investigation and were succeeded by Smithson Publications Ltd, which was promoted to continue the same business. The court found that the companies had continued a method of trading which was contrary to the public interest and which represented an abuse of limited liability status.
Business minister Ian Lucas said: “We hope that the action we have taken in this and other such cases sends a clear message that we are determined to crack down on such companies and will not allow them to get away with cheating honest businesses.”
Fairchild Publications Ltd was incorporated in August 2007. Its registered office and trading address is at 3A Crown Street, Bolton BL1 2RU.
Hogan-Reynolds Publications Ltd was incorporated in November 2007. Its registered office is at Swan Centre, 4 Higher Swan Lane, Bolton BL3 3AQ and its trading address was at 55A Wallgate, Wigan WN1 1BE.
Smithson Publications Ltd was incorporated in July 2009. Its registered office and trading address is at 20 Manor Street, Bolton BL1 1TU.
The petitions to wind up the companies in the public interest were presented on December 9, 2009.
3:41 pm, March 10, 2010
Publishing scam raked in more than £740,000
Three Bolton-based companies which used misleading sales practices in a publishing scam raked in more than £740,000 before they were shut down.
Fairchild Publications Ltd, Hogan-Reynolds Publications Ltd and Smithson Publications Ltd, which produced booklets covering child safety issues, have been wound up in the High Court following an investigation by Company Investigations of the Insolvency Service.
The companies, run by the Fearn family, solicited sponsorship for the booklets of about £200 for 30 booklets, which were then sent unsolicited to schools.
Four members of the family: Susan Fearn, Wayne Fearn, Gareth Fearn and Eddie Fearn, ran the three companies, the court heard.
Nominated company officers not belonging to the family were appointed while the Fearns were engaged in some other capacity.
Investigators found the appointed company officers were found to have little knowledge of the day to day running of the businesses.
In a news release, the Insolvency Service said the companies used “a host of misleading sales practices” to obtain payment from sponsors, including deceiving businesses into believing that they had previously agreed to sponsor booklets; representing that the booklets were of benefit to schools when, in fact, the booklets were compiled from information freely available on the internet and were unsolicited by schools; and representing that they were acting for a charitable purpose or cause when, in reality, they were private companies operating for profit.
The misleading sales practices were compounded by aggressive and persistent debt collection tactics causing numerous businesses to pay for sponsorship that they had not agreed to.
Fairchild Publications Ltd had received payments from sponsors of at least £636,000 and Hogan-Reynolds Publications Ltd received payments of at least £107,000. Little of this money was spent on the production and distribution of booklets. Instead it was used to fund payments to those in control of the companies and their telesales staff, with the companies adopting wage payment methods which facilitated tax evasion, such as the systematic use of cheque cashing services and the use of false employee names to withdraw cash from the companies.
Fairchild Publications Ltd and Hogan-Reynolds Publications Ltd ceased trading and were abandoned during the investigation and were succeeded by Smithson Publications Ltd, which was promoted to continue the same business. The court found that the companies had continued a method of trading which was contrary to the public interest and which represented an abuse of limited liability status.
Business minister Ian Lucas said: “We hope that the action we have taken in this and other such cases sends a clear message that we are determined to crack down on such companies and will not allow them to get away with cheating honest businesses.”
Fairchild Publications Ltd was incorporated in August 2007. Its registered office and trading address is at 3A Crown Street, Bolton BL1 2RU.
Hogan-Reynolds Publications Ltd was incorporated in November 2007. Its registered office is at Swan Centre, 4 Higher Swan Lane, Bolton BL3 3AQ and its trading address was at 55A Wallgate, Wigan WN1 1BE.
Smithson Publications Ltd was incorporated in July 2009. Its registered office and trading address is at 20 Manor Street, Bolton BL1 1TU.
The petitions to wind up the companies in the public interest were presented on December 9, 2009.
