Two men have been jailed over a boiler room scam in which they creamed off 80% of the invested funds.
David Arthur Vidgeon and Rahul Natwar Patel were each sentenced to seven years in prison at Ipswich Crown Court today.
They were found guilty of conspiracy to defraud investors, many of whom were
retired and elderly, via an illegal high pressure, "boiler room" share-pushing operation from call centres in Spain.
Between April 2003 and November 2006, around 1,250 investors in the UK were persuaded to buy over £7m worth of valueless shares.
The fraudsters siphoned off around 80% of the invested funds.
Boiler rooms are call centres, concerned in the selling of shares on behalf of companies. They are not authorised and operate illegally, often from abroad.
One such company was COL Systems Ltd. Vidgeon and Patel pushed shares in the firm based on its product "Crime-on-Line", described as a theft prevention and recovery system for registering property ID references on a central online database.
A template contract note relating to another fake company and obtained during the investigation was file-named "Gordon Gekko, after the corrupt big-time investor in Hollywood film 'Wall Street'.
Vidgeon, described by the SFO as the "lynchpin" in the fraud, arranged and controlled the deals between the boiler rooms in Spain and the UK companies whose shares they were to sell to unsuspecting investors.
SFO director Richard Alderman says: "A boiler room is a predatory and orchestrated
'attack' on private investors so it's very satisfying to see justice delivered for such
"I hope publicity of today's outcome will serve as a warning for people to think twice when hard-sell investment offers, usually unsolicited, appear tempting. 'No' is the right answer".
The SFO investigation began in May 2005 with support from Norfolk and Suffolk Police. Evidence was obtained from eight countries outside the UK.
The defendants were charged in December 2008 and the trial opened at Ipswich Crown Court on 14 April 2010.
In passing sentence, HHJ Holt said: "It was a sophisticated and prolonged boiler room
fraud and had as victims sensible, ordinary people many of whom lost life savings.
"An investor buying any of these shares will have a better chance of a return by buying a lottery ticket. You knew this and did not care."
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