Jail for share scamsters won't stop the boiler room fraud
One family made millions by flogging worthless shares. Don't become a victim
Saturday 27 August 2011
family businesses can be admirable concerns – but not the one run by fraudster Tomas Wilmot with his sons Kevin and Christopher (pictured left). The trio tricked around 1,700 elderly people out of their savings through a boiler room scheme. If you think that sounds like small beer, bear in mind that the crooks netted some £27.5m from their scam, £14m of which has not been recovered.
The Wilmots were sentenced to prison at South Crown Court on Monday. The court case followed a long-running investigation – known as Operation Slick – by the Financial Services Authority, City of London Police and Eurojust. By the time the case reached court, investigators had produced 21,000 documents in evidence and 350 witness statements.
Tomas Wilmot had, in fact, come under some scrutiny back in the 1980s when he ran a share-peddling outfit called Harvard Securities from seedy offices near Waterloo station in London. He was investigated by the then Department for Trade and Industry and the firm, which flogged shares over the phone, went bust in 1988 after failing to receive regulatory authorisation.
The collapse left thousands of investors out of pocket unable to sell the almost worthless shares they had been flogged by Harvard traders. Sound familiar? Who knows how many other unsuspecting punters Wilmot cheated out of savings before he was finally jailed on Monday. The trio were sent down for 19 years in total, with Tomas getting nine years and his sons five each. Their crime was to flog millions of low value, worthless and sometimes non-existent shares to victims in the UK.
How did they trick people? As with all other boiler room scams, the promise is always of information that will cause the shares to soar. The Wilmots' salespeople claimed that the worthless shares they were hawking about were set to rise in value on the back of a takeover or a new mega contract, for instance. In all cases, they gave the impression that once the news was out, there would be a massive clamour for the shares.
Victims were told: "This is the next Microsoft"; or "This company is about to list on AIM..."; or that the firm has "obtained several government contracts...".
In truth, of course, there never was a listing, government contract or anything else that might create interest in the shares. In many cases there was actually no listing, so that anyone persuaded to buy would have nothing to sell. Tracey McDermott, the FSA's acting director of enforcement, said the Wilmots "sought to cloak their activities within an aura of respectability to deceive investors, many of whom were vulnerable or elderly. They are, however, nothing more than cold-hearted criminals who profited from stealing other people's money."
The family enjoyed flaunting their crooked gains, splashing out on homes in the UK, Gran Canaria, Brazil and Slovakia, as well as a private box at Ascot Racecourse.
How can you spot a boiler room scam? The simple rule is never buy shares offered to you by a cold caller on the telephone. If you are contacted out of the blue by somebody trying to sell you shares, you should hang up. If you think they may be legitimate check the FSA Register to see if the person selling shares is authorised to do so. Then call the company back using the details on the FSA Register to verify its identity.
Report any company that cold calls you to buy or sell shares to the FSA. It maintains a list of known unauthorised businesses on its website. The list is updated regularly with details of businesses that are believed to be involved in boiler room activities and could be dangerous to investors.
Most share fraudsters use legitimate-sounding overseas-based companies with fake UK addresses and phone lines routed abroad. The Wilmots' list of boiler rooms included Griffin Securities Spain, Premier Venture Capital, Ridgewell Capital Markets and Bolton Price International.
Detective Superintendent Bob Wishart of the City of London Police warned: "The evolving nature of fraud sees British criminals increasingly trying to hide their operations in foreign countries and siphon off their profits using a myriad of global bank accounts." The money trail left by the Wilmots stretched across Malta, Spain and Austria, for instance.
If you think you may have been contacted by a boiler room call the FSA's consumer helpline for further guidance on 0845 606 1234.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Buyers beware of new-build home headaches
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
Money Insider: Would £150 make you switch banks?
Gold-plated pensions – the key to retirement freedom?
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by police in Ohio park
- 2 To help fuel their propaganda machine against the poor, our government has now decided to redefine the word 'welfare'
- 3 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 4 Naked free runner captured in breathtaking photographs above London's streets
- 5 Manchester United named Premier League's loudest fans despite late push by Chelsea according to 'Smart Meter' app
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
France 'blocks' Russian sailors from boarding a warship
Green Party Caroline Lucas interview: 'We could be on the edge of something very big'
iJobs Money & Business
Negotiable: Argyll Scott International: Hi All, I'm currently recruiting for t...
£50000 - £60000 per annum + benefits: Argyll Scott International: A Business A...
£30000 - £35000 per annum + benefits: Ashdown Group: PR Marketing & Events Exe...
$80000 - $110000 per annum, Benefits: Bonus and Employee Investment Scheme: Se...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens