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Police Bust Boiler Room 15 Foreigners Arrested

Stock Fraud Swindles and BoilerRoom Investment Schemes

 

Chiangrai Times – Police have arrested 15 foreigners, most of them hailing from Europe, for allegedly running a Boiler Room Scam Call Centre, duping people into wiring more than Bt320 million into their accounts.

Of the suspects, six are British, two American, two Romanians, three from the Philippines, one German and one South African national. The suspects were arrested recently at a flat in Sukhumvit Soi 13, where they ran the scam based on bogus stock-market trade. The suspects usually worked from 1pm to midnight – the period most stock exchanges overseas operated.

Police said that most of the victims were Westerners, who were advised by the suspects – posing as independent brokers – that they could make 95 per cent profit from their investment in exchange for a 25-per-cent cut. The suspects had allegedly opened a bank account in Switzerland, which they used to transfer money to Malaysia-based accounts and then on to Thailand.

Meanwhile, police arrested a Liberian national and a Guinea national for duping an American into buying a magic potion for Bt147,000, which could allegedly turn US dollar bills of a lower denomination into $100 bills. The victim notified police after the suspects demanded another Bt1 million in exchange for the key to a safe deposit where the remainder of the potion was kept.- The Nation.

Avoiding Boiler Rooms in Stock Fraud Swindles and BoilerRoom Investment Schemes

The heart of a fraudulent telemarketing operation is usually a “boiler room,” a rented space with desks, telephones, and experienced salespeople who talk to hundreds of people from across the country every day.

In a typical investment-related boiler room the “brokers” ( registered reps ) may sit crowded together in a room with long tables with up to seven phone stations per table. The firm likely holds mandatory sales meetings every morning at which time sales techniques are demonstrated and “scripts” for the firm’s “house stock” are distributed. Brokers are expected to follow the script and only give customers the information it contains. They are discouraged from doing any outside research, and are told to rely on the firm’s research and representations.

After the morning sales meeting, the reps are expected to spend the entire day on the phone. The firm expects a high volume of sales, and if brokers do not stay on the phone, they are fired. One registered rep told an examiner that he made 250 calls on a good day; 70 on a bad day. All of his calls had been previously “qualified” by an unregistered cold caller.

Many telemarketing firms utilize a monitoring process which randomly tape-records the sales conversations of its telemarketers and they are made aware of it. This acts as internal policing for the company to ensure that no incoming cheques are misdirected from the main operation.

Overseas Boilerroom Investments

Today, con artists see that investors are paying increasing attention to overseas investment opportunities so a new generation of scams has also gone international. Most troubling is a growing pattern of former U.S. boiler room operators who have moved their telephone sales operations outside the U.S. and Canada to Hong Kong, the Bahamas, Thailand, Panama, Costa Rica, Europe, Liberia, and even South Africa.

The locations of the boiler rooms are carefully chosen, with con artists dialing out of countries that may have no extradition arrangements with our domestic law enforcement agencies.

There are also differing views among nations about what are acceptable market activities. For example, the London Stock Exchange does not ban “bear raids” in which speculators try to drive down the price of a stock through short selling, a practice which is sharply limited under New York Stock Exchange Rules.

In some countries, including Italy, Sweden, Belgium and Taiwan, there exist few prohibitions against insider trading. Greece and Kenya are among the nations with no government agency to safeguard the interests of investors by guarding against marketplace misconduct.

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Posted by on Jul 7 2012. Filed under News, Tourist in the News. You can follow any responses to this entry through the RSS 2.0. Responses are currently closed, but you can trackback from your own site.
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