Five men have been jailed after a criminal prosecution by the Financial Conduct Authority (FCA) for a total of nearly 18 years for their involvement in a complex boiler room scam that resulted in £2.8 million losses.
The five men were sentenced by Southwark Crown Court on Tuesday for duping more than 170 victims into making fraudulent investments. The trial judge, said that “some victims lost everything they had” and added that elderly people had been specifically targeted. Their stories “were at times positively heart-breaking.”
The men were working in a London based boiler room where they used cold-calling and high-pressure sales tactics to sell worthless and overpriced investments to the public.
Between July 2010 and April 2014, the fraudsters persuaded victims to purchase shares in a company that owned land on the island of Madeira.
The investors were told that the value of the shares would increase substantially when permission to build 20 villas was granted, thereby enhancing the land’s value. Investors were promised guaranteed returns of between 125% and 228%. Of course, none were ever paid.
The FCA says this was one of its largest ever investigations they have ever conducted and dubbed it ‘Operation Tidworth’. It involved:
- 4 separate search operations and one unannounced visit.
- Seizure of over 100 computers and other digital devices.
- 4 million documents and over 1.4 million documents ingested into the FCA’s Evidence Management System requiring evidential assessment and review.
- 142 witnesses.
- 287 witness statements.
- 3,682 exhibits.
- 3 defendants remanded in custody for breach of court bail by committing further offences.
Targeting the elderly and vulnerable
Commenting on the case, Mark Steward, executive director of enforcement and market oversight at the FCA, said: “These fraudsters callously targeted investors who were often elderly and vulnerable, lying to them to get them to part with significant sums of money.
“Despite efforts to conceal and destroy evidence, the FCA, in one of its largest ever investigations, was able to ensure that these criminals faced justice and ended up behind bars.
