Boiler room fraudsters posed as FSA-regulated advisers

22 November 2011 12:26 pm | By Natalie Holt

Three men have been sentenced to a combined nine years’ imprisonment after pleading guilty to running a £1.3m boiler room fraud.

The operation was based in Spain and targeted investors in the UK between 2009 and 2010.

The Serious Fraud Office says the defendants used high-pressure telesales techniques to promote worthless share bonds in non-trading companies pretending they were shares in Chinese commodities firms.

One of the defendants stole the identity of an FSA-registered adviser to purchase contact details of investors who had made investment enquiries on an investment website.

James Muir Baird from Braintree in Essex was sentenced to a prison term of five years and six months after pleading guilty to conspiracy to defraud for running the sales operation. Paul O’Leary, also from Braintree, was sentenced to one year in prison after admitting money laundering in relation to managing the funds. Omar Shorif Choudhury from Great Yeldham in Essex was sentenced to two years and six months imprisonment after pleading guilty to making misleading statements and practices.

SFO director Richard Alderman says: “Boiler rooms are a blight on the investment sector. They often create victims out of aspiring individuals and dash hopes of a secure retirement. I am pleased the SFO has played its part in bringing the offenders to justice. I hope that confiscation will help to restore some of the damage so callously done.”

The sentencing today closes a number of related boiler-room prosecutions over the last two years, known as Operation Anderson.

The fraud involved calling potential investors in the UK on the pretext of promoting shares in large Chinese commodity firms. These firms were non-trading shell companies controlled by Baird and his associates and had no link to the Chinese firms.

Employees of the boiler room claimed they were based in Canary Wharf but actually operated out of Barcelona. The company regularly changed name to avoid detection, and went by the names IGM Securities, WA Advisory and MS Securities.

Payments were made to accounts held in the names of these companies in various countries including Cyprus, the Seychelles, and the UK.  However, these bank accounts were controlled by Baird’s associates and the money went to the boiler rooms.

Baird used the identity of an FSA adviser to purchase investors’ contact details, which gave the boiler the cold call list to work from.

The case came to light after an investor made a complaint in 2009, when it was then referred to the SFO.

The trial of all three defendants was due to be held at Chelmsford Crown Court in October, but as all three pleaded guilty the prosecution’s case opened yesterday and concluded today.

 

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