Boiler room fraudsters jailed for 19 years
Hundreds of victims of boiler rooms scams got justice this week when three men were jailed for a total of 19 years after being found guilty of organising a £27.5 million boiler room scam.
Thomas Wilmot was jailed for nine years, and his sons Kevin and Christopher were locked up for five years each.
They controlled numerous boiler rooms that defrauded around 1,700 people of £27.5 million. The scams targeted the elderly and vulnerable.
“This was a highly sophisticated scam that made use of offshore structures to launder funds, put distance between the Wilmots and the boiler rooms, and ultimately disguise the nature of the business.
"That meant that what started out as a UK-based FSA [Financial Services Authority] investigation had to evolve into a joint, then global, operation to bring the perpetrators to justice,” said Tracey McDermott, the FSA’s acting director of enforcement.
A boiler room is an office where fraudsters telephone people and pressurise them into buying non-tradable, overpriced and sometimes non-existent shares. Those who invest lose all their money in the vast majority of cases.
What to do if someone calls trying to sell you shares:
1. Hang up
2. Check the FSA Register to see if the person is authorised to sell shares
3. Call the company back using the details on the FSA Register to verify they are genuine
4. Report any firm that cold calls you offering to buy or sell shares to the FSA.
The practice of locating your financial affairs (banking, savings, investments) in a country other than the one you’re a citizen of, usually a low-tax jurisdiction. The appeal of offshore is it offers the potential for tax efficiency, the convenience of easy international access and a safe haven for your money. However, offshore is governed by complex, ever-changing rules (such as 2005’s European Union Savings Directive) and, as such, is the exclusive province of the wealthy and high-net-worth individuals.
The Financial Services Authority is an independent non-governmental body, given a wide range of rule-making, investigatory and enforcement powers in order to meet its four statutory objectives: market confidence (maintaining confidence in the UK financial system), financial stability, consumer protection and the reduction of financial crime. The FSA receives no government funding and is funded entirely by the firms it regulates, but is accountable to the Treasury and, ultimately, parliament.
This is an umbrella term for an organisation, usually unlicensed by the financial authorities, which uses forceful, persistent and highly aggressive telephone sales techniques to sell unlisted or non-existent securities to private investors. In the majority of cases, the shares being sold are worthless and the boiler room vanishes, leaving the investor out of pocket. Although they boast impressive UK addresses, the firms operate from boiler room “hotspots”, such as Spain, Switzerland, Dubai, Japan, Bermuda or the US, so they are outside the remit of the Financial Services Authority.