Tony Levene examines the biggest boiler room ever successfully prosecuted in the UK.
This week, in Southwark Crown Court in London, a notorious fraudster called Tomas Wilmot was finally sent down for nine years for running a boiler room share pushing scam.
A large variety of UK and overseas enforcement agencies were involved – including the FSA, the City of London police, the Crown Prosecution Service and HMRC.
He'll be sharing his time as a guest of Her Majesty with Kevin and Christopher Wilmot, his sons who were each sentenced to five years.
As far as can be traced, the father and sons trio had ripped off investors, often elderly, sometimes “sophisticated”, but always prepared to believe what a voice at the end of a phone told them and stump up an average of around £20,000 each.
Biggest boiler room prosecuted in the UK
This is the biggest boiler room ever successfully prosecuted in the UK – there is a case pending in Florida which focuses on around $100m. But the Wilmot boiler rooms, bust by what the authorities code-named “Operation Slick” was targeted purely at UK investors. Boiler room workers were exclusively recruited in the UK – they had to have “public school” accents – often from adverts in respectable mainstream newspapers promising “overseas sales opportunities”.
The Wilmots lived in luxury on the proceeds. The father's home had a swimming pool, stables and a tennis court. They sponsored a racing driver. They had a box at Ascot and hired helicopters to fly them there from homes nearby in Surrey.
Their activities were master-minded from a converted barn hidden down a country lane in Surrey. Yet while the Wilmots had been under suspicion for some time, it took a piece of luck to provide the key to the fraud. A search found a computer hard drive under a child's bed at the home of the father of Tomas Wilmot's estranged wife Christine. The police say she had taken the hard drive and hidden it to use as a bargaining counter in divorce proceedings.
The hard drive had details of a huge operation spanning several continents – from the UK collection points to phoney companies in Tajikstan to secret accounts in the British Virgin Islands.
There is a film to be made of Wilmot's life and rackets. The Wilmots used a variety of people (without their knowledge) in documentation including details of the landlord of a pub in Waterloo where Wilmot senior used to drink but also individuals in Spain, Italy and Brazil. And the dynamics between father and sons would be fascinating.
Warning! Warning!
But – and here's the big BUT – just because the Wilmots are now safely behind bars, it does not mean boiler rooms are a thing of the past. While the Wilmots ripped off £27.5m – there may be a little back for investors after confiscation proceedings – the FSA estimates UK investors lose £200m a year to these frauds. That is probably an under-estimate.
So no one can relax. Here's some pointers the authorities have shared with me from the investigation. The Wilmots' methods were no different to others – just bigger.
- The first call is always “cold”. They will always say they have got your details from a “marketing” survey some months ago. This is always a lie.
- The second call will gradually introduce you to the company whose shares they are pushing.
- The company will usually be in mining or technology – something most people have little idea of. But this company will either be non-existent or of no consequence.
- They will often forge “analysis” of the company in question. This can be lengthy but it is rubbish. Lines such as “it has huge reserves of precious metals” or “it has a cure for cancer” or “it is about to be taken over by Sony/GlaxoSmithkline/some other mega company” are common.
- Share certificates are forged and not worth the paper they are printed on. Registrars are either phoney or forged.
The authorities have upped their game hugely in Europe and North America. In the UK, the number of victims known to the FSA has fallen substantially. But the boiler rooms have also changed.
So here's one rule which I'll put in bold capital letters. Print it off and stick it on your phone.
NEVER, NEVER, EVER RESPOND TO ANYONE WHO PHONES YOU WITH AN INVESTMENT PROPOSITION OF ANY SORT.
IT DOES NOT MATTER WHAT THEY SAY! REAL FINANCIAL ADVISERS DO NOT AND ARE NOT ALLOWED TO DO THIS.
Now, if everyone were to remember that, then no one would lose a penny to fraudsters like the Wilmots.
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