Fraud #investigation into #insolvency #firm P&A #Partnership is #dropped

The Department for Business, Energy and Industrial Strategy has dropped a criminal investigation into a firm of insolvency practitioners accused of a multimillion-pound fee fraud.

P&A Partnership, a Sheffield-based insolvency firm that worked on high-profile administrations including those of several football clubs, had been accused of cheating creditors of scores of businesses out of millions of pounds through overcharging.

The investigation has been abandoned after officials decided that continuing was “not likely to lead to the gathering of sufficient evidence to provide a realistic prospect of conviction”.

A lack of available witnesses and “evidential difficulties” — understood to include botched raids of P&A’s offices — contributed to the decision, the government said. Two of the firm’s former insolvency practitioners admitted wrongdoing in a high court civil case last year related to the alleged professional fees scam.

Christopher White and Andrew Wood, both former partners at P&A and joint administrators of FW Mason & Sons, a Nottingham-based timber business, were accused of fraud, misfeasance or breach of fiduciary duty by liquidators from Grant Thornton.

In 2016, Mr Wood, Mr White and Jeremy Priestley, P&A’s controlling partner, told The Times that allegations about the firm’s conduct were “groundless”. Mr White has now admitted misfeasance in relation to the administration and liquidation of the timber company and Mr Wood said that “time was recorded for work which was not done at all”. Mr Priestley, who was not a party to the proceedings, continues to strenuously deny there was any wrongdoing at the firm. There was no finding of fraud or dishonesty against Mr White or Mr Wood.

The admissions ended a civil case brought against Mr Wood and Mr White on behalf of the Pension Protection Fund. P&A charged £1.2 million for the FW Mason work. There were question marks against the veracity of £800,000-worth of the fees. Mr White could now be made bankrupt as liquidators from Grant Thornton pursue him for £1.7 million in fees and costs.

As a result of the agreement, the fraud allegation was not considered during the civil case, which was settled.

Mr Justice Morgan said that while there might be a public interest in discovering whether there was “systemic dishonesty” in the firm, he ruled that “the court’s task is not to conduct public inquiries”.

The pension fund has engaged liquidators to investigate its suspicions that “excessive fees” were charged on another insolvency handled by P&A, that of William Sessions, a 200-year-old printer based in York.

It has concerns more broadly that pensioners, often the largest creditor when businesses go bust, may be losing out as a result of overcharging by the insolvency profession.

Grant Thornton is understood to be looking at scores of other businesses where they suspect excessive fees may have been charged by P&A.

P&A, which itself went bust two years ago, was accused of “time-dumping”, falsely claiming for billable hours on insolvency cases in order to profit from estates at the expense of business owners and creditors, including taxpayers.

Mr Priestley denies there was “any improper charging by P&A” and the admissions by Mr White and Mr Wood do not expose him to any liability. His lawyer said the “relevant regulatory body has not taken any steps in relation to our client and is satisfied about the conduct of my client”.

Mr Priestley is a member of the Insolvency Practitioners Association, but is not regulated by it as he is not a qualified insolvency practitioner.

Mr Wood did not respond to a request to comment. Mr White could not be reached for comment. He was ordered to pay £1.7 million to FW Mason while Mr Wood was ordered to pay £1.3 million.

Behind the story
Sheffield-based P&A was best known for often contentious insolvency work on football clubs, including Crystal Palace, Plymouth Argyle and Luton Town (James Hurley writes).

There is no suggestion these jobs formed part of the criminal investigation which has been dropped. However, there are serious outstanding questions about the fees charged by P&A more broadly, which ultimately fell on creditors, including the taxpayer.

Documents seen by The Times show Andrew Wood, a former P&A partner, claiming that an employee had informed him that the partnership had “a list of cases with cash in them that was circulated every month to certain people so that they could charge time to those cases. That time would then be billed irrespective of the fact that the time being charged was for work which had not been done.”

This employee admitted she had been pressed to falsely claim for work, Mr Wood claimed. He added that Jeremy Priestley, who controlled the firm, had been on five foreign holidays during a seven-month period, and drew £21 million out of the business between 2003 and 2014. When P&A itself collapsed in 2015, it owed creditors £11 million.

Mr Priestley “determined how much would be billed in each case each month”, Mr Wood claimed, and was “driven by fee generation”.

Mr Priestley’s lawyer said Mr Wood, and another partner, Christopher White, had denied any impropriety at P&A “in their defences and evidence supported by statements of truth” in a civil case which the allegations relate to.

He said Mr Wood was an unreliable witness since he changed his story “at the last minute” to support the case against him, following an agreement that he would not be pursued for claims against him. The case has been settled.

Mr Wood claimed that the alleged “champagne lifestyle” of Mr Priestley continued even when P&A fell into financial difficulties over a tax debt. This was “irrespective of the fact” he “had asked a number of employees (including me) to defer their wages”, he claimed in the documents.

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