Franchise fraud pair duped victims out of £163,000 with false claims
Two businessmen duped victims out of £163,000 by falsely claiming their franchise business was linked to major companies, including Harrods.
Simon Rickett and Dillon Boivin drove flash cars to impress investors, Leicester Crown Court was told.
They even claimed to be associated with Asda, Boots and Tesco.
Having launched UK Websaver Ltd, an online advertising and discount loyalty card scheme in 2007, they sold franchises on the misleading basis it was a fully established business with a lucrative track record. It was not.
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Eight victims from across the country lost tens of thousands of pounds in total – using savings or borrowing to buy into the business opportunity which proved completely unworkable in most cases.
The pair received 12-month jail sentences, suspended for two years, and were each ordered to do 250 hours of unpaid work, at Leicester Crown Court this week.
They had admitted eight counts of fraud by falsely promoting the venture as a proven successful business franchise opportunity, between January 2007 and June 2008.
Several franchisees suffered anxiety, depression and ill health as a result of the failure to earn a living and one man's marriage broke down with the stress, it was claimed.
Another feared he would lose his home.
When the victims complained, the defendants threatened them with legal action and, in some cases, Rickett terminated their contracts because of a "lack of success" on their part.
When Leicestershire County Council trading standards officers investigated, and examined Skype chat on the defendants' computers, they found evidence of the fraud, said James Thomas, prosecuting.
Rickett boasted on Skype to Boivin: "We can say what we want, trading standards can't touch us.
"We'll never admit misrepresentations, we'll pay them (the franchisees) off before it gets to that.
"We'll fight them for as long as possible. We'll take £70,000 into our limited companies... and bankrupt Websaver."
Rickett wrote a glowing testimonial falsely advertising the business' success on the Websaver website, featuring logos of household names which had no links with them.
They also wrongly claimed to be seeking accreditation from the British Franchise Association, whose code of ethics they breached in any event, said prosecutor Mr Thomas.
Boivin (37), of Orton Close, Rearsby, had a Porsche and Rickett (31), of Grantham Road, Bottesford, drove a Lexus, which impressed franchisees who turned up at their offices in Glenfield or Narborough for their training days.
Alarm bells started ringing with the complainants when the national company names were taken off the website, prior to the firm's collapse.
Sentencing, Judge Simon Hammond said: "False claims were made to encourage people to invest.
"It caused a great deal of anxiety and unhappiness.
"Trading standards, with help from the police, have brought these defendants to book."
The pair face being banned from holding directorships and stripped of their assets to compensate the victims at a future proceeds of crime hearing.
Jonathan Kirk QC, defending Rickett and Boivin, said: "It (Websaver) was started as a legitimate business and wasn't fraudulent from the outset.
"They worked hard getting the business going, trying to make it work. They were unsuccessful and it got out of hand.
"They're very sorry and accept culpability for what occurred."
He said they were both "family men" with no previous convictions.
Afterwards, trading standards legal affairs manager Gary Connors, said: "They were making wild claims of their business' success.
"We're pleased with the outcome of the case."