A BUSINESS rates scam which ripped off local companies has been exposed by trading standards.

And at court last week the four directors behind the rip off were given prison sentences and large fines.

Lancashire's trading standards were at the forefront of uncovering the massive fraud which saw two companies based in Yorkshire and the Midlands collect £14 million in fees in just two years.

This included 300 firms in Lancashire, many of whom made complaints against the rip off merchants, Oldfield and Company and Strattons and Company.

At Leeds Crown Court, directors Jason Clarke, John Stenson, Anthony Dardis and Lee Hilton pleaded guilty to fraudulent trading or knowingly making false statements.

The court heard that small businesses were systematically defrauded into paying for a service which claimed it was something it was not.

Customers were led to believe that they could achieve a significant reduction in the business rates.

Their marketing led customers to believe that a proper, professional evaluation would be made of the prospects of success before payment was due and before an appeal was lodged.

In reality, the most cursory assessment was made, if at all, by unqualified staff. In this way, a very lucrative business was developed, processing appeals regardless of their merit and charging a substantial sum for very little work with no intention of repaying the fee if the appeal failed.

Clarke was sentenced to 15 months and ordered to pay costs of £62,329 and disqualified to act as a company director for 7 months.

Stenson was sentenced to nine months in prison and ordered to pay costs of £16,817. Dardis was imprisoned for six months and ordered to pay costs of £16,817 and Hilton, who pleaded guilty to two offences under the Trades Description Act, was fined £1,000.

Lancashire's Finance Chief, Chris Cheetham, said: "This was serious fraud perpetrated on small businesses within the County. They paid for a service they never received. Unscrupulous traders who obtain money from Lancashire businesses by deception can expect to be investigated and prosecuted and, as this case shows, they can lose their liberty."