Boiler Room Cracked In Spain

Published in Investing on 27 May 2011

Fifteen Brits are accused of ripping off victims from a boiler room scam in Spain.

We hear of Spain mentioned in connection with boiler room scams all too often, and sadly there can come with it the suggestion that the Spanish authorities are perhaps a little less vigorous than they could be when it comes to tracking down crooks in their sunny country ripping off victims back in dull grey Blighty.

So it comes as a very pleasant surprise to hear the news that a gang of 15 Brits is now up before the Spanish beak on charges of running one of Europe's biggest boiler room rackets, which is thought to have involved cold calling thousands of targets in the UK and trying to get them to hand over some of their hard-earned.

Suspects recruited in bars

The alleged perps were picked up in a raid in Mallorca, which netted our Balearic plods a gang of mostly young men from around the UK who are thought to have been recruited in English speaking bars on the island.

Boiler room schemes are thought to be responsible for relieving gullible UK investors of around £200m every year. They will often use real companies as their bait, and will sometimes even use victims' funds to run pump and dump operations, creaming off the profits from illegally elevated share prices for themselves.

But the simpler scams just make up fake companies and persuade their victims to hand over cash to invest in the nonexistent shares -- that really is how simple it is. And that's what this lot are alleged to have done, using a number of bogus companies including Viking Gold Resources, Dyno Medical, and Inca Pacific Gold and Mining.

£4m scam

The City of London police, who worked with the Spanish authorities in the investigation, reckon around 300-400 people might have been conned out of as much as £4m, and they urge anyone who thinks they might be victims to get in touch.

And for the rest of us -- just remember, that impressive-sounding salesman trying to convince you he has the secret to great profits might just be some yob picked up in a Spanish bar while drinking himself stupid on holiday. Hang up the phone!

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oliver55 31 May 2011 , 5:58am

Respectfully suggest that their ba..s be nailed to the wailing wall.

Nuff said!


coulddobetter 31 May 2011 , 12:39pm

I don't hang up when called by cold callers. Much better (and good fun!) to keep them talking for as long as possible. Keep pretending you are interested until either they or you get fedup! There is nothing worse for these people than to have their time wasted. And it has the advantage of preventing them from calling more gullible souls while talking to you!

ScottishPound 31 May 2011 , 1:02pm

coulddobetter, I've done exactly the same and its amazing how they can go on about a supposedly fantastic opportunity without actually giving any meaningful information whatsoever.
I wouldn't touch these schemes with a bargepole, but its a shame some people get drawn in.

5753225 31 May 2011 , 1:06pm

Some years ago I was phoned from Madrid by an outfit that was flogging shares in some company called "Hexagames" which was located in Boca Raton (wherever that may be... I was expected to know). Apparently they had a new boardgame that was going to sweep the world.
What surprised me was how difficult it was to say "No" to these guys. Whatever words they used, or maybe it was the tone of voice, or the construction of their sentences, they were playing a sophisticated psychological trick. I did say "No", but I found the incident both interesting and disturbing.

5HT 31 May 2011 , 1:51pm

@5753225's point is an interesting one. I was once cold-called by some chap wanting to sell me a sure fire thing on some inside information that such-and-such firm was about to become the subject of a takeover bid. It was beyond my understanding why I should not simply invest directly in the company myself without using their services, even assuming I believed him (which I didn't). But it really was hard to say no.

I suggest if you want to do @couldobetter's strategy you might just say, "Excuse me a moment, I just want to go and get a pencil and paper" and then leave the phone dangling while you go and do something else.

AlysonThomson 31 May 2011 , 4:01pm

Previously, I believed that the Spanish Police and Law Courts only pursued scam companies if they had defrauded a Spanish National. This makes a pleasant change.
When are they going to start tackling the Timeshare Re-sale scam companies based on La Costa Del Sol?

AlysonThomson 31 May 2011 , 4:03pm

Boca Raton is in Florida, USA.

DP130132 31 May 2011 , 5:09pm

If you want to have "fun" Wait for a pause then say "Pardon" - followed by "speak louder," then "Can't hear, speak louder", etc., etc., in similar vein. You wil soon get a hang-up.

chat01 01 Jun 2011 , 12:45am

What always amuses yet also annoys me is the fact that they will never take "No" for an answer and try to get you to defend your decision. "Why don't you want to make 100% return?" they query in an almost outraged voice to which I usually reply "I don't have to justify my decision to you". This only confuses them for a few seconds before they push on with the "but don't you want to make a better return" etc. but I have to say "the game" palls pretty quickly and I just end up with a "I'm not interested ... thanks.....bye!" and hang up before I get anymore inane queries. Sorry if I'm allowing others to be bothered but what worries me more is how I got on their list. I have never actually been caught out by one of these calls but they must have got me off a list from somewhere so who thinks I'm a mug?

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