Friday, 17 April 2020

BOILER room scam

Boiler room scams didn't get to feature in The Fraudsters but they are lucrative frauds run by well-organised and sophisticated criminal gangs. Victims are cold-called by fake stockbrokers and persuaded to buy shares in worthless, non-existent, hi-jacked or near bankrupt companies. One major rip-off outfit recently swindled an Irish victim of €250,000 in a classic boiler-room scam that targeted UK and Irish people.
It was part of a boiler room operation allegedly run by Englishman Paul Robert Gunter. He is due to go on trial in Florida accused of stealing €53 million by selling worthless shares. Also facing charges is his 26-year-old daughter Zibiah who is said to have played a major role in the fraud which scammed an estimated 15,000 people. According to a criminal complaint filed by the US Secret Service, the Gunters hijacked the identities of at least 54 dormant publicly-traded companies registered in the United States. The agents said the Gunters used “high-pressure and misleading sales techniques” and used the money “for their own personal enrichment.” Customers were told the firms were on the verge of a breakthrough or the target of a takeover bid that would boost the share price.
This week three US based lawyers were also charged for their role in the huge scam. They are alleged to have help funnel funds to bank accounts around the globe. The ‘stockbrokers’ were in fact telesales workers recruited to work from an office in Barcelona – some of whom were not even aware they were taking part in a scam. The operation has been investigated by US federal authorities as well as the City Of London Police and the British Columbia Securities Commission in Canada.
Boiler room con-artists often get contact details for a ‘client’ from a share register so they know they are targeting people used to buying and selling shares. The boiler-room scamsters give themselves names that conjure up image of blue-blood Wall Street wealth such as Morgan Vanderbilt, Lincoln Ventures, Boulton Capital Resources. Boiler rooms might simply take the money and disappear or they might sell you shares, but at vastly inflated prices and with exorbitant dealing charges. The movie Boiler Room starring Vin Diesel and Ben Affleck depicts the high-pressure sales techniques using in typical scams. The salesmen are slick and they have all the answers, using carefully prepared scripts. They are also relentless, calling clients four or five times a day and piling on the pressure over several weeks.
The Irish Financial Regulator currently lists no less than 126 companies who have been touting for business in Ireland. It is a criminal offence to offer financial services in Ireland unless licensed by the regulator.

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posted by Eamon Dillon at


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