Boiler Room fraud poses multi-million pound threat

Boiler room fraud could be costing the UK economy hundreds of millions of pounds, warns the City of London Police today (24 April).

New research shows that despite the recession thousands of UK investors are still losing significant sums every week to fake shares - money which is then also lost to genuine companies needing investment.  Criminals have even targeted some of their victims for their redundancy money.

The findings come on the same day that four people are due to be sentenced at Southwark Crown Court for their roles in a 2.4million pound boiler room fraud with 500 UK victims.

City of London Police is responsible for coordinating Operation Archway, the national intelligence reporting system for boiler room fraud, where victims are cold-called by fake stockbrokers and persuaded to buy shares in worthless, non-existent or near bankrupt companies.

The Archway team has today (Friday 24 April 2009) released details of a new profile of boiler room crime, looking at a number of areas including how the fraudsters now operate, the type of victims they target, how they recruit their 'salespeople' and the successful efforts to prevent the crime.

Det Chief Supt Stephen Head, head of the Economic Crime Department said, "This latest information shows the ruthless approach of the criminals behind boiler rooms. It seems they are prepared to target anyone, however vulnerable, and will take their last penny if they can.

"But today we can also show that the joined up approach of the police, banks, UK and overseas regulators and foreign law enforcement agencies is bearing fruit. Together, we have prevented millions from falling into criminal hands and being lost not only to individuals but also to the UK economy.

"This type of fraud is hitting investors in the pocket and depriving genuine businesses of millions of pounds of much needed cash flow."