Member Article

'Boiler room' fraud arrests in Spain

The Serious Organised Crime Agency (SOCA) has announced the arrest of 10 British nationals in Spain, believed to be part of an organised crime group of 22. The group are thought to be responsible for defrauding hundreds of victims of over eight million Euros.

The investigation was led by the Spanish National Police with the support of the Serious Organised Crime Agency and City of London Police.

It is believed that members of the group operated a ‘boiler room’ fraud in which telephone campaigns were carried out to persuade over 200 UK citizens to put their savings into investment packages, which simply did not exist.

Boiler room scams are common place. They are quite simply an operation selling shares to investors in companies which are usually either fake or are not successfully trading.

Enquiries revealed that the alleged perpetrators used false identification documents, travelled constantly, changed addresses regularly, and used the name of a non-profit making company to open current accounts with various banks.

Ian Milne, SOCA’s Head of Operations in Europe, said: “Working with partners to protect members of the public is a priority for SOCA. We believe this organised crime group was running a sophisticated and complex boiler room fraud. Shutting it down has put a stop to more members of the public being duped into parting with their hard earned cash.”

The 22 people have been charged with being part of an organised crime group, as well as with fraud offences. Five of the British nationals were remanded in custody and the others were released on bail.

Andrew Swan, financial crime solicitor at Short Richardson and Forth LLP commented: “Investors should be very wary of promises of high rates of return on their money, particularly from those cold calling them. They should at the very least carry out simple checks to make sure the people selling the shares and the company are legitimate.

“Scammers will usually cold call people and use hard-sell tactics to sell shares in UK or overseas based companies. They often target more vulnerable investors, such as the elderly, and bully them in to parting with their money. These companies later prove to be worthless.”

This was posted in Bdaily's Members' News section by Short Richardson and Forth LLP .