The arrests were the result of a two-year investigation, code named “Operation Rico”. A total of 17 boiler rooms have been closed down: 14 in Spain; two in the UK; and one in Serbia. Operation Rico was a joint effort between the City of London Police, the Policia Nacional in Spain, and the US Secret Service.
BBC News reports that,
Among those under investigation were 10 ‘tier one criminals’ with alleged links to organised crime and drugs, detectives said. Nine of them are British; one is South African.
The boiler rooms were cold-calling people and using high pressure sales tactics to persuade them to part with their money. The Financial Conduct Authority estimates that £200 million is lost in the UK every year to boiler room fraud.
The police have so far identified 850 victims in the UK, who have lost a total of £15 million. But the final number is expected to be very much higher.
The fraudsters steal people’s life savings and use it to fund extravagant lifestyles. In a series of raids police seized an Aston Martin, a Ferrari Spyder, a Mercedes, a BMW, a Ford Mustang, designer clothes, watches and more than £500,000 in cash. One suspect was paying £40,000 per month rent on his luxury home.
On its website, the City of London Police lists the products the boiler rooms were selling, including carbon credits:
In 2012 the City of London Police and the Policía Nacional began forensically examining reports of investors worldwide being sold bogus shares in carbon credits, gold, renewable energy, forestry, eco projects, wine and land.
Joan Mayer, who is in her late 70s, was conned into handing over £23,000 for carbon credits. “I received a call from a very enthusiastic young man, who excited me,” she told the BBC’s Danny Shaw. The interview was broadcast on the Radio 4 Today Programme on Friday. She never saw the money again.
She told The Telegraph she had wanted to start investing and when she got the first call about carbon credits she thought “that was the beginning”.
“I was very interested in the idea so I agreed to invest and I was then sold some more carbon credits and the same seller, who by this time had become quite a pal, then suggested investing in rare earth metals.
“I had lots of brochures sent to me and he promised me that the rewards would be considerable.
“Over a period of many weeks I felt I got to know him quite well. He was very helpful and thoughtful and he kept in touch regularly.”
Another salesman then persuaded her to borrow money to buy £140,000 of shares in gold. She told the Today Programme,
“I said I haven’t got that sort of money, at all. And he said, well, you know, with respect you did take a little bit out of the house. Maybe you could go up to your maximum because you’ll be paying it back very soon. And I foolishly trusted him and I did borrow money out of my house. My generation is not very street wise. Because we never had to be.”
BBC News spoke to Detective Inspector James Clancey, from the City of London Police. Clancey said, “This is us seeking to decimate a crime type.”
Crimestoppers has launched an appeal to the public to help catch four international boiler room fraudsters:
Anyone with any information about any of these people should contact Crimestoppers.
City of London Police advises anyone who believes that they are the victim of an investment scam to contact Action Fraud. Victims can also give information about suspected investment fraud anonymously to Crimestoppers.