19 Years Imprisonment Hounding Three Individuals Tagged in Boiler Room Fraud

Jack Humphrey, Regulatory journalist
August 23, 2011 /

A long running and detailed investigation by the Financial Services Authority (FSA), City of London Police (CoLP) and Eurojust has led to a verdict sending three individuals to jail for a total of 19 years following conviction of boiler room fraud.

The Crown Prosecution Service (CPS) conducted the prosecution at Southwark Crown Court, ruling that Tomas Wilmot, the ringleader of the operation, will spend nine years behind bars, while his sons Kevin and Christopher were given five years imprisonment each, decisions that were more lenient compared to the 2-year imprisonment ruling against David Roger Griffiths Mason who was convicted for boiler room fraud last June. The FSA also banned him from serving a director position for six years.

Tomas Wilmot served as leader of the syndicate, having been the central to the procurement of shares for sale through boiler rooms and instructed others to create entities that were used as boiler rooms and to sell shares to victims.

Kevin Wilmot was involved in the day to day mechanics of the administration of the various schemes, including providing instructions to the people operating UK and offshore accounts for the scheme.

Christopher Wilmot gave the various scams credibility as he controlled a Slovakian IT company, Page Conception, that designed and hosted websites used in the fraud. Furthermore, expert analysis showed that forged signatures on share transfer forms were made by his hand.

The sentences on the Wilmots were passed following the individuals’ convictions on four offences of conspiracy to defraud which resulted in £14 million of losses.

Boiler room involves contacting people by telephone to con investors into buying non-tradable, overpriced or even non-existent shares. These fraudsters are unauthorised, normally overseas-based companies with fake UK addresses and phone lines routed abroad. In the vast majority of cases, investors lose all of their money.

According to the FSA, the Wilmots controlled a syndicate of boiler rooms that defrauded an estimated 1,700 investors of £27.5 million in total. Many of the victims were elderly and, in some cases, suffering from serious illnesses.

Southwark Crown Court found that the three Wilmots “conspired to acquire, transfer and sell millions of low value, worthless and sometimes non-existent shares to victims in the UK.”

Judge Leonard QC, said, said: “You ran a highly successful enterprise. You deprived many individual investors of substantial amounts of money; for some that was money they could not afford to give up. It was a staggering amount of £14 million.

“You’ve sailed so close to the wind in your commercial enterprises it was not a surprise the FSA investigated you.

“[Speaking to Kevin and Christopher Wilmot] Both of you played an important role including the mechanics of sending documents to give false comfort to investors. Tomas Wilmot said he could not do it alone, and he did not.”

The Wilmots were implicated in another boiler room allegation in late 2007, triggering a formal investigation by the FSA conducted in 2008.

In May 2009, 93 FSA and CoLP investigators carried out a series of coordinated searches at the home addresses of the suspects in Guildford and Horsham, and at their office in Bramley, Surrey. During the raids 48 digital items (such as computer hard drives and other storage devices) were seized along with 67,000 documents. From that point the investigation became a joint effort with CoLP.

The investigation revealed the full scale of the operation such that 16 different boiler rooms had sold shares to 1,700 different UK victims between 2003 and 2008; £27.5 million was paid into five UK bank accounts; approximately £14 million was transferred out of the five UK accounts to offshore banks in Malta, Lithuania and Spain; and the boiler rooms were based predominantly in Spain but the back office, accounts and companies used in the operation were from Malta, Italy, Slovakia, Lithuania, Austria, Andorra, Brazil, Belize, Dubai and a number of Caribbean islands.

The Wilmots were charged in June 2009 and went to trial in May 2011. By the time the case reached the courts investigators had produced 21,000 documents in evidence and 350 witness statements – 85 of whom were victims of the boiler rooms.

Tracey McDermott, the FSA’s acting director of enforcement, said: “This was a highly sophisticated scam that made use of offshore structures to launder the funds, put distance between the Wilmots and the boiler rooms, and ultimately disguise the nature of the business. That meant that what started out as a UK-based FSA investigation had to evolve into a joint, then global, operation to bring the perpetrators to justice.

“The individuals convicted today sought to cloak their activities within an aura of respectability to deceive investors, many of whom were vulnerable or elderly. They are, however, nothing more than cold-hearted criminals who profited from stealing other people’s money.

“These are significant verdicts. It signals another victory in our ongoing fight against boiler room fraud and unauthorised business more widely. This outcome reflects not only our continuing close and productive working relationship with other UK bodies but also shows the FSA working with European authorities, such as Eurojust, to go the extra mile to ensure perpetrators of these crimes can be brought to justice.”

The investigation was the first time the FSA had secured the support of Eurojust. Eurojust coordinates investigations in several EU member states that resulted in vital information and evidence being obtained that helped convict the Wilmots.

 

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