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Financial Crimes
02/28/2014

HSI assists UK and Spanish law enforcement in disrupting international investment fraud scheme operating in 4 countries

Ford Mustang confiscated from property in Marbella, Spain. Photo courtesy of the City of London Police.
Ford Mustang confiscated from property in Marbella, Spain. Photo courtesy of the City of London Police.
WASHINGTON — A joint operation between U.S. Immigration and Customs Enforcement (ICE) Homeland Security Investigations (HSI), City of London Police, the United Kingdom's National Crime Agency (NCA), The Spanish National Police (Policía Nacional) and the Spanish Guardia Police has resulted in 110 arrests. Thirty five warrants were executed at private residences and in buildings where boiler room operations were allegedly being conducted in the United Kingdom (UK), Spain, other parts of Europe and the United States.

HSI special agents assisted the City of London Police and Policía Nacional in conducting enforcement operations in England, Serbia, Spain and the United States, marking a significant step forward in a two-year investigation into an extensive network of organized crime.

Of the 110 arrests, there were 84 in Spain, 20 in the UK, two in the United States and four in Serbia with the majority of people arrested on suspicion of money laundering and fraud offences.

The boiler rooms are believed to be responsible for millions of dollars of investment fraud. High value goods including an Aston Martin, Ferrari, Mercedes, BMW, Mustang, designer clothes, watches and cash in various denominations with a value in excess of £500,000 ($690,720) were also seized.

The operation also led to the closure of what are believed to be 14 boiler rooms in Spain, two in the UK and one in Serbia.

"This case demonstrates the full impact of our close working relationships with foreign law enforcement partners," said HSI Office of International Affairs Assistant Director John G. Connolly. "Through the pooling of assets and the sharing of critical information, we will continue to disrupt and dismantle the operations of international organized crime syndicates so that Americans and other citizens are not victimized, in our country and overseas. I urge investors to exercise due diligence in all financial matters, especially those of this nature."

In 2012, the City of London Police and the Policía Nacional began forensically examining reports of investors worldwide being sold bogus shares in carbon credits, gold, renewable energy, forestry, eco projects, wine and land. Many investors had suffered devastating financial losses and emotional distress.

Since 2012, a number of arrests have been made in the UK, with several cases being brought to the court. The investigation then started to target individuals believed to be at the very top of an organized crime gang, whose influence investigators believe can be found in the day-to-day running of boiler rooms located across Europe.

City of London Police Commander and National Economic Crime Coordinator Steve Head said, "This is a landmark both from an investigative perspective and in terms of our close working partnership with other law enforcement agencies, most notably the Policía Nacional. "It is our most important investigation ever, targeting people we believe are at the top of an organized crime network that has been facilitating boiler rooms across Europe and which is suspected of being responsible for millions of pounds of investment fraud. The arrests made across four countries highlight how law enforcement can work globally in the pursuit of suspected criminals who seek shelter in foreign lands so they can target innocent people with investment scams that wreak financial and emotional destruction."

In recent years, City of London Police investigations have led to numerous prosecutions where organized crime gangs have been found to be running boiler rooms, mainly located in Spain, with teams of young men cold-calling investors offering them worthless, overpriced or even non-existent shares. They promise high returns but those who invest, often the elderly and vulnerable, usually end up losing their money.

Joan Mayer, 78, from Hampshire, England, lost a six figure sum. She had wanted to invest to help create a secure financial future for her daughter. Joan Mayer said, "Discovering the fraud was shattering. I was left feeling isolated and it is difficult to explain how humiliated I feel. My lifelong trust in people has been severely damaged."

Another victim, a 72-year-old man from Midlands, England, who did not want to be identified, said, "When my wife and I first found out that we had been scammed out of our entire life savings, the shock and despair we both felt was unbelievable. I felt totally devastated and could not believe that money I had saved my whole life for had been taken from me. In those early weeks we hardly slept or ate. It is still very raw to us both and we both have bad days when it is all we can think about."

In the last year of the investigation, prior to the operational activity this week, City of London Police restrained £1.5 million ($2.07 million) in UK bank accounts believed to have been gained through boiler room activity.

NCA's Economic Crime Command Deputy Director Stephanie Jeavons said, "The scale of this operation demonstrates the response that major fraudsters targeting the UK public should expect. Working with partners like the Policía Nacional and City of London Police, the NCA is directing its international reach, intelligence capability and relentless focus on cutting economic crime to putting these criminals out of business. Awareness of this type of crime among the UK public, as well as ex-pat communities, can also help to fight it. Boiler room fraudsters often attract jobseekers with offers of lucrative sales jobs based abroad, which turn out to be cold-calling people and aggressively selling them worthless or non-existent commodities. This can decimate the financial security of innocent people. If you are recruited to a boiler room you can expect to find yourself subject to law enforcement action, and if an unsolicited investment opportunity like this seems surprisingly attractive, please ask yourself why."

Anyone who believes they have fallen victim to an investment scam in the United States is urged to call the toll-free HSI tip line at 1-866-DHS-2-ICE or to complete its online tip form.

HSI Houston; HSI London; HSI Madrid; HSI Tampa; NCA's Financial Conduct Authority, Serious Fraud Office; and the U.S. Secret Service assisted in this investigation.

HSI's Office of International Affairs (OIA) is responsible for enhancing national security by conducting and coordinating international investigations. With agents in 67 offices in 48 countries around the world, OIA represents ICE's broadest footprint beyond our borders. HSI attaché offices work with foreign counterparts to identify and combat transnational criminal organizations before they threaten the United States.