Clampdown on ‘boiler room’ fraud


Published: Thursday 19th March 2015 by The News Editor

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The billion-pound trade in so-called “boiler room” fraud scams in the City of London is the target of a new police clampdown.

Operation Broadway saw detectives and fraud officials visit sites in the Square Mile, Canary Wharf and Westminster today to uncover suspected scams and warn businesses about taking on possible criminal tenants, who use prestigious addresses to gain a veneer of respectability.

The boiler room method sees fraudsters dupe their often elderly victims via cold calling, offering high percentage returns on a wide variety of investments, when really the large sums of money goes straight to criminals.

City of London Police, which is overseeing the intelligence-led operation, said that more than 5,000 investors lost a combined £1.73 billion through boiler room schemes reported to the Action Fraud crime prevention centre last year. It said figures suggest that on average each scheme makes £1.25 million.

Detective Superintendent Maria Woodall, who is leading Operation Broadway, said it was focused on targeting “investment frauds in the making, before they properly get off the ground and really get their claws into people who are simply looking to put their money in a safe place where it will give them a decent rate of return”.

She said: “To do this we are working closely with mail forwarding and serviced office providers, stressing the importance of them being fully aware of how their premises are being used and the need for them to act quickly if they have evidence that their office space has been turned into a base for a boiler room fraud.

“At the same time we are also drawing in more and more intelligence from workers who are increasingly operating as our eyes and ears in London’s office blocks. We are finding this multi-faceted approach … to be a powerful and effective way to tackle investment fraud and stop callous and ruthless criminals stealing and then blowing money that many of their victims had put aside to sustain them through retirement.”

Operation Broadway included officers from City of London Police and Scotland Yard, plus City of London Corporation Trading Standards officials and agents from the Financial Conduct Authority and HM Revenue and Customs.

They are warning office rental companies to be on the look-out for tell-tale signs of a scam being run from their premises, warning they are at risk of being exploited to help criminal acts take place. The day of action also saw thousands of leaflets handed out to commuters outside major transport hubs during the morning rush hour, asking them to also be on the lookout for criminals in their buildings.

Signs include tenant companies that make up-front cash payments, choose short-term leases but do not put their names in reception, and operate irregular hours.

Jon Averns, the City of London Corporation’s public protection director, said: “We’re creating a hostile environment for investment scammers who use City addresses to create an illusion of respectability that plays an important part in persuading people to part with their money.

“Consumers, who are often elderly and vulnerable, are actively targeted by these scammers, and persuaded to trust them and transfer very large sums – typically over £50,000 – in the hope of gaining a little more income from the savings.

“Our message is simple: don’t send your money to someone you don’t know, for a product you haven’t seen. If it sounds too good to be true, it probably is.”

Published: Thursday 19th March 2015 by The News Editor

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