Insolvency Service (National): Dodgy company director imprisoned for two and a half years for fraudulent trading

Thirty nine year old Christopher Orchard, who ran Advance AIT Limited from an office suite in Derby, was imprisoned this week for two and a half years for defrauding his customers. The criminal prosecution by the Department of Business, Innovation and Skills followed an investigation by The Insolvency Service.

Derby Crown Court heard that, between April 2005 and July 2006, Mr Orchard scoured a database of insolvent companies, and targeted the businesses that were listed as being owed money by these companies (their creditors).

Mr Orchard contacted these creditors and persuaded them to sign up with him for a fee by falsely claiming that he could pursue the owners of the insolvent companies and successfully get repayment of the debts. For providing this ‘service’ Advance AIT Ltd charged fees ranging from £95 to £7,000. In fact, no such service was provided. Although the methods of deception employed by Mr Orchard varied, a common feature was that he engaged in some minimal activities to create the impression that something was being done to ‘chase’ the directors and that he was providing a genuine service.

The investigation found that:-

a total of £258,174.12 was paid into the Advance AIT bank account between 8 April 2005 and 14 July 2006, reflecting at least 156 separate payments from clients; and

· Mr Orchard used company funds as a private income (£2094.74 was spent on designer clothes, £2448.75 on holidays and £7,389.47 on groceries).

Following an Insolvency Service investigation Advance AIT Ltd was wound-up in the public interest in July 2007. Mr Christopher Orchard was disqualified from being a company director for six years, having signed a Company Disqualification Undertaking in May 2009 for his poor conduct.

Commenting on the case Robert Burns, Head of Company Investigations and Enforcement at The Insolvency Service said:

“Mr Orchard relied on the fact that most of the people he contacted had little idea of how the insolvency process works. He enticed unsuspecting creditors by promising a ‘no win, no fee guarantee’ and that they had ‘nothing to lose, but everything to gain’. Had these creditors known, they would have realised when a company goes into liquidation, it is the job of the liquidator to realise any assets and distribute them to the creditors. Anyone wanting to understand how corporate insolvency works should take the time to visit the Insolvency Service website.”

Glenn Wicks, Deputy Chief Investigation Officer for BIS said:

“The Insolvency Service conducted a full and through investigation into Mr Orchard’s trading activities and as a result disqualified him from the business environment. The successful criminal prosecution then taken forward by the Department for Business Innovation and Skills sends a very clear message, fraudulent trading is a serious matter which will not be tolerated and those found guilty can expect a serious punishment.”

Members of the public who think they know of a person is acting in breach of a Director Disqualification Order or Undertaking can report them to The Insolvency Service Enforcement Hotline on 0845 601 3546.

Notes to editors

1 Advance AIT Limited was incorporated on 8 April 2005. Christopher Orchard was appointed a director on the same date. Paul Bembridge was appointed company secretary on 9 April 2005. He resigned this position on 25 November 2005. The registered office was 17 Ensign House, Admirals Way, Canary Wharf, London. This is the address of Flexy Office (UK) Limited, a business that provides virtual office services to clients. Advance AIT Limited was compulsorily wound up by court order on 18 July 2007

Advance Information Systems Limited was incorporated on 7 December 2005. The only appointed director and company secretary from the date of incorporation were Westco Directors Limited and Westco Nominees Limited respectively. The registered address was 2^nd Floor, 145-157 St John Street, London. This is the address of Westbury Chartered Accountants which includes a company incorporation business called Companies Made Simple. Advance Information Systems Limited was compulsorily wound up by court order on 18^th July 2007.

Advance AIT Management Limited was originally incorporated on 11 October 2004 under the name ICC Investigations Limited. The registered address was 17 Ensign House, as above. It changed its name to Advance AIT Management Limited on 9 April 2005. Advance AIT Management Ltd was struck off the Register on 22 August 2006 and dissolved by notice in the London Gazette dated 29 August 2006.

Advance AIT Financial Limited was originally incorporated on 15 September 2004 under the name Thomas Partnership Investigations Ltd. On 8 October 2004 it changed its registered address to 17 Ensign House – the same virtual offices as Advance AIT Limited. Advance AIT Financial Ltd was struck off the Register on 11 July 2006 and dissolved by notice in the London Gazette dated 18 July 2006.

2 CHRISTOPHER ORCHARD was charged as follows:

Count 1: FRAUDULENT TRADING, contrary to section 458 of the Companies Act 1985.

PARTICULARS OF OFFENCE: CHRISTOPHER ORCHARD, between the 8^th day of April 2005 and the 18^th day of July 2007, was knowingly party to the carrying on of the business of Advance AIT Ltd, trading as Advance AIT and Advance Group, for a fraudulent purpose, namely to defraud its customers.

Count 2: FRAUDULENT TRADING, contrary to section 458 of the Companies Act 1985.

PARTICULARS OF OFFENCE: CHRISTOPHER ORCHARD, between the 7^th day of December 2005 and the 18^th day of July 2007, was knowingly party to the carrying on of the business of Advance Information Systems Ltd, for a fraudulent purpose, namely to defraud its customers.

3 On 6 May 2009 Christopher Orchard signed a Director Disqualification Undertaking banning him from being a director of a company for a period of six years. Disqualification undertakings were introduced in April 2001, they are an administrative equivalent of a disqualification order but do not involve court proceedings. Without specific permission of a court, a person with a Company Director Disqualification, including Undertakings, cannot:-

act as a director of a company; take part, directly or indirectly, in the promotion, formation or management of a company; be a liquidator or administrator of a company; or be a receiver or manager of a company’s property.

Further information on director disqualifications and restrictions can be found athttp://www.insolvency.gov.uk/directordisqualificationandrestrictions/whatisdisqualification.htm

4 The Department for Business, Innovations and Skills prosecutes a range of criminal insolvency cases in magistrates and Crown Courts across the country. Most of the cases are referred by the Insolvency Service.

5 The Insolvency Service administers the insolvency regime, investigating all compulsory liquidations and individual insolvencies (bankruptcies) through the Official Receiver to establish why they became insolvent. The Service also authorises and regulates the insolvency profession; deals with disqualification of directors in corporate failures; assesses and pays statutory entitlement to redundancy payments when an employer cannot or will not pay employees; provides banking and investment services for bankruptcy and liquidation estate funds; and advises ministers and other government departments on insolvency law and practice. Further information about the work of The Insolvency Service is available from http://www.insolvency.gov.uk

6 Media enquiries should be directed to:-

Denise Rawls, Press Office Manager 020 7674 6910

Ade Daramy, Press Officer 020 7596 6187

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Contacts

NDS Enquiries 
Phone: For enquiries please contact the issuing dept 
ndsenquiries@coi.gsi.gov.uk