The Serious Fraud Office has recently reported the conviction of two men for their part in what is believed to be the largest boiler room fraud ever pursued by a UK authority.
A boiler room fraud involves a business, often from overseas, persistently pushing the urgent sale of over-valued or even worthless shares in a company.
These latest convictions bring the total number of individuals convicted in relation to this conspiracy to nine. Reporting restrictions in place at the time meant that the convictions and sentences of the other seven last year, in linked cases, can only now be reported fully.
The most recent convictions include a 49-year-old Australian national, who was convicted of one count of conspiracy to defraud in relation to an investigation that was launched by the Serious Fraud Office in 2007. From 2003-2007, a total of around £70 million was obtained fraudulently from UK investors under a boiler room fraud scheme he masterminded.
He was responsible for setting up a scheme under which sales entities operating from Madrid sold shares in US-listed companies on a fraudulent basis. Investors in the companies bought shares that had restrictions on their resale for a 12 month period. When the investors came to sell the shares after the expiry of this period, they often found that they were unable to do so as they were worthless, and that the shares were in shell companies or companies that were not operating at all.
The other man recently convicted was also found guilty of one count of conspiracy to defraud. He administered the processing of shares distributed to investors and managed the finances of the conspiracy, using and managing off-shore bank accounts to distribute the funds obtained as part of the conspiracy.
Six other individuals were sentenced to between three and seven years in custody in May 2013 as a result of the same SFO boiler room fraud investigation. These sentences followed the defendants being convicted by a jury on an indictment containing a single count of conspiracy to defraud.
A seventh individual pleaded guilty to three counts of money laundering and was sentenced to 21 months imprisonment, which was suspended for two years.
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This blog post is intended as a news item only - no connection between Lewis Nedas and the parties concerned is intended or implied.
