Boiler Room Fraud Makes Headlines
So-called “boiler room” fraud scams have made headlines in Britain recently. A boiler room fraud targets investors. The term refers to a high-pressure sales team. This team of people puts pressure on others to invest in so-called “sure thing” investment opportunities. There are basically 6 steps which are employed here. The first step requires the fraudster to purchase stock in a small company, or in a fictional company. Next, the organization contacts people and convinces them to invest in the same stock. Once a large number of people invest, then the value of the company rises, as does the stock.
The next step requires the fraud team to sell the stock at an inflated price. After the sale, stocks plummet since the company never existed or was not profitable. All of the victims lose their money as a result. 850 victims were found in the latest boiler room scheme found in Britain. Investors lost an estimated £15million to the fraudulent organization. Arrests were made in London, Manchester, Florida, Serbia and Spain. This proves that boiler room fraud involves people from all over the world.
City of London Police banded together to conduct the raids. Their operation took down the mastermind bosses, as well as the conmen who worked for them. Out of all of the people who were arrested, 84 were in Spain, 2 were in the U.S., 4 were in Serbia and 20 were in the U.K.