A father and daughter have been arrested in the United States after 15,000 Britons, most of them elderly, were tricked into investing £35m in worthless shares.
The victims were cold-called by fraudsters posing as stockbrokers who used high-pressure sales techniques to persuade them to buy shares in more than 50 worthless, non-existent or near-bankrupt companies, the US authorities said.
The scam began in 2005 and $70m from British victims is alleged to have landed in bank accounts in Florida and elsewhere belonging to Paul Gunter, 58, and his daughter Zibiah, 25. Mr and Ms Gunter were arrested yesterday by US federal agents and charged with multiple counts of money laundering and mail, wire and securities fraud, which carry maximum sentences of between five and 25 years.
Deputy Chief Inspector Robert Wishart, head of the City of London Police's money laundering unit, said in a statement released yesterday by the US Immigration and Customs Enforcement Agency: "This is part of an ongoing investigation into a mass marketing crime scam known as boiler room fraud. The operation today is a fine example of how international collaboration can bring to justice those who choose to perpetrate these crimes."
The term "boiler room" is a reference to the rented properties from which the bogus salesmen call hundreds of potential victims every day. Their targets are often obtained from shareholder registers at Companies House.
Among the tactics employed by such fraudsters are assurances that the fake company is about to announce a major discovery that will send the price of its shares soaring.
John Joyce, the US special agent leading the investigation, said: "Co-operation between law enforcement at all levels has allowed us to focus our resources and respond quickly to uncover and prevent criminal activity such as this type of financial fraud."Reuse content