Conman sentenced to seven and a half years for fraud and theft

News from our partners National Trading Standards

A man from Stourbridge was sentenced last week to seven and a half years imprisonment, having been found guilty yesterday of 33 offences of fraud and theft for running a business franchise scam between 1997 and 2010. The conviction and sentencing follows a lengthy investigation by the National Trading Standards Central England Scambuster Team, and a trial lasting over four weeks.

Michael Patrick Phelan (61), originally from Cardiff and currently of no fixed abode, used the name Mike Jones during this period. He duped people to invest in his scam by promising them a guaranteed level of earnings and their money back within 12 months if they decided that the business opportunity was not for them.

The scam generally involved attracting people to buy the rights to distribute his books in a specific geographical area. The books were a range of four titles entitled “The Strangest…”, and included one called ‘The Strangest Pubs in Britain”. The distribution rights cost between £4,750 and £79,000. However, often the books were unavailable or promised support never materialised.

Despite the people’s dissatisfaction with the scheme, Phelan kept advertising for more agents to cover more areas. His scam ran approximately 10 years and he gained approximately £1,000,000 from it. The court also heard that he had never paid any tax or National Insurance.

Over the course of the trial the court heard evidence from more than 30 witnesses from across the country who had invested money in the scam. One individual from Blackpool gave evidence about a loan of £90,000 that he had given Phelan at a time when Phelan was based in the north west. The vast majority of this loan was never repaid, with Phelan doing a ‘moonlit flit’ down to the West Midlands to avoid paying. Here, he started once again to recruit agents into his scheme.

The victims pursued Phelan for their money back for months and years, but generally without success. Most eventually gave up any hope of getting their money back, which caused significant financial hardship for many victims, some of whom lost their homes as a result.

Phelan was present on the first day of the trial, but never returned on day two, having claimed that he was unwell and waiting to be admitted into hospital.

Enquiries were made and it became evident that Phelan had lied and had no further intention of attending the court process. His Honour Judge Carr issued a warrant for his arrest and ordered the trial to continue in his absence. Enquiries are still being made to identify his current whereabouts.

During the course of the scam, Phelan operated from Blackpool and then Stourbridge and Brierley Hill.

He was sentenced to 7½ years for the deception offences, and a further 4½ years for the theft offences, to run concurrently.

Responding to the sentencing Lord Toby Harris, Chair of National Trading Standards, said:

“Mr Phelan operated this fraudulent scheme for nearly a decade and enriched himself to the tune of around £1 million. At the same time his victims were left out of pocket and in many cases bankrupt or homeless.”

“I am pleased with the news of this conviction and I would like to thank all those involved with this investigation for their efforts in securing this conviction.”

“I urge anyone considering investing money in similar schemes to make sure they do their due diligence – you should undertake background research on the person or business you’ll be working with and always ask for references. If you suspect you are being scammed or defrauded then you should report it to the Citizens Advice consumer helpline on 03454 04 05 06.”

For more information about this case contact Phil Page in the regional Scambusters office on 0121 464 5668 / 07919 626708

For more general enquiries regarding the National Trading Standards Board please call 020 7025 7570 or email nationaltradingstandards@grayling.com.

About the National Trading Standards Board

• The National Trading Standards Board is a group of senior and experienced local government heads of trading standards, representing all trading standards services across England and Wales. The Board has been set up by the Government as part of changes to the consumer protection landscape and an enhanced role for trading standards.
• The National Trading Standards Board provides leadership influence, support and resources to help combat consumer and business detriment locally, regionally and nationally.
• The National Trading Standards Board funds the Scambuster Teams that target rogue trading, doorstep crime and scams, providing support across England and Wales through eight regionally based teams.