What is boiler room fraud?
A boiler room fraud is essentially a serious form of unlicensed share dealing. Share dealing is a regulated activity under the Financial Services and Markets Act 2000. The term boiler room refers to a busy centre of activity. This would usually be a room of salesmen using telephone cold calling to commit fraud by selling worthless or non-existent shares. The salesmen will often pretend they are stockbrokers and persuade investors to part with their money to buy shares in non-existent, worthless or near bankrupt companies. Often tactics are employed to try and intimidate those changing their minds by claiming they have made a binding verbal contract. Legal action is often threatened.
Often people can be accused of this type of fraud when they themselves have simply been recruited by the real fraudsters without knowing about the fraud that is being perpetrated. The sales team sometimes have no idea of the scam.
The most common charge used for this fraud is conspiracy to defraud. A conspiracy is simply an agreement and here it means an agreement to defraud someone. The important thing for us to remember is that it is for the prosecution to show dishonesty. If the prosecution cannot prove that then you cannot be convicted.
Often these large scale investment frauds have international elements. It is common to have links to Spain and the USA in these cases. The proceeds of crime can often be traced overseas. Increasingly the Financial Conduct Authority (FCA) and City of London Police are using their powers to freeze assets at an early stage with restraint orders. This can be devastating on a business or an individual and you will need assistance to challenge this if you become the subject of one.
Our experienced team of serious fraud lawyers has the expertise and knowledge to look at the required level of detail to defend you. Contact our expert fraud solicitors on 0203 816 9274 or complete our online enquiry form.
Acquittal for man accused of boiler room fraud
Our business crime, fraud and regulatory solicitor, Priscilla Addo-Quaye, has recently secured the acquittal of a man who was facing serious boiler room fraud charges, which would have incurred a lengthy prison sentence if convicted.
The man, who was one of three defendants, was charged with conspiracy to defraud. The prosecution alleged the complainant had been defrauded over several years as part of a highly sophisticated ‘boiler room’ fraud operation. In boiler room frauds, a broker, usually operating from an overseas firm, will cold call a potential investor and propose they buy shares in a particular company.
The complainant in this case had been persuaded to invest in shares. The complainant did not receive any share certificates and later found out that the company he had purportedly purchased shares in did not exist. The prosecution alleged the defendants conspired together to defraud the complainant of £350,000.
Throughout the case, our client denied his involvement in the conspiracy to defraud.
The case recently went to trial at Shrewsbury Crown Court and our client, together with one other co-defendant, was found not guilty by the jury.