The Financial Conduct Authority fraud squad confirm that ‘Operation Tidworth’, one of the watchdog’s biggest probes to date, has led to five being jailed for a £2.8m London-based boiler room scam.
Those involved and convicted have been jailed for a total of 17 years for their participation in an intricate London-based boiler room scam which resulted in £2.8m losses, in a coup for the UK markets watchdog that prosecuted the case.
The Financial Conduct Authority made the criminal prosecution, its second major case in terms of the size of evidence seized, after carrying out a thorough investigation into five diverse boiler room companies, one of which claimed to be “one of the UK’s largest wealth advisory firms”.
A former bouncer, a sixth defendant Michael Nascimento, described by the FCA as the “controlling mind, instigator and the main beneficiary of the fraud”, is to be sentenced at Southwark Crown Court in September 2018, of which we will report the outcome.
Between July 2010 and April 2014, the FCA alleged that members of the public were duped into investing in a company that owned land on the island of Madeira. The unsuspecting investors were told the land and therefore the company’s shares would increase in value to give returns of as much as 228%. None were ever paid.
Such ‘boiler rooms’ are unauthorized, illegal brokers who use cold calling and other high pressure, bullying sales tactics to sell worthless and or overpriced investments to unsuspecting members of the public, often targeting the old and vulnerable.
As far as we know at the Timeshare Consumer Association, over one hundred and seventy investors lost money in the scam. Such fraudsters heartlessly targeted the elderly and vulnerable, lying and cheating them to part with their life savings and other significant amounts of money. Mark Steward of the FCA told the court they “found the defendants guilty of offences of conspiracy to defraud, fraud, money laundering and perverting the course of justice, as well as breaches of markets legislation”.
The case comes as the FCA has promised to be firmer and stronger on financial crimes of this kind. Throughout ‘Operation Tidworth’, as the case is named, prosecutors unveiled that the defendants had forged documents under the name of the Four Seasons and Hilton Hotels as part of swindling the investors into thinking the hotel chains were interested in buying the Madeira development. Even the phenomenal amount of £2.8m is a small amount of money, compared with other foiled overseas boiler room scams targeting vulnerable UK investors.
Mr Nascimento’s personal assistant, Jeannine Lewis, received two and a half years while Ryan Parker received two years. Senior broker Charanjit Sandhu was sentenced to five and a half years’ imprisonment. Hugh Edwards and Stuart Rea, both of whom recruited sales personnel, were both sentenced to three years and nine months.
“These fraudsters callously targeted investors who were often elderly and vulnerable, lying to them to get them to part with significant sums of money,” said Mark Steward, the FCA’s executive director of enforcement and market oversight. “Despite efforts to conceal and destroy evidence, the FCA, in one of its largest ever investigations, was able to ensure that these criminals faced justice and ended up behind bars.”
Mr Steward added that the regulator was “determined” to recover as much money as it could from the defendants for investors under proceeds of crime legislation. The trial judge, His Honour Judge Hehir, said that“some victims have lost everything they had”, adding that “those who commit these offences cannot expect anything but firm punishment”.
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For more information regarding this article or assistance in any other timeshare related issues please contact the TCA on 01908 881058 or email: info@TimeshareConsumerAssociation.org.uk