The Spanish police’s UDEF financial crimes unit, in cooperation with the City of London Police, has broken up a massive boiler room operation that scammed 18 million euros over the past year. There are 5,000 confirmed victims of the scheme, the vast majority retired UK nationals aged between 60 and 70, according to sources from the National Police Corps.
The joint operation netted 108 suspects, of whom 66 were arrested in Barcelona and 12 in Málaga. All of the detainees were British nationals, with three Americans also picked up by police. A High Court judge ordered 11 of the suspects to be held in preventive custody, while 13 were released on conditional bail and a further 32 on unconditional bail but as official suspects in the inquiry. The magistrate is yet to decide on the fate of the remaining detainees. Twenty people were also arrested in the UK, eight in Serbia and two in the US.
Boiler rooms are a system of duping people into buying shares supposedly linked to profitable companies but that are in fact worthless or do not exist. In this case, the operatives were grouped into teams of 20, with their bosses drawing up potential client lists, finding offices to work out of and acquiring the false documentation to open bank accounts.
The telephone operators would then cold-call the victims, posing as stock brokers. They would then offer financial products with attractive potential returns. Once the victim was hooked, the scam would be rolled out. After various transactions had been made and a company name used several times, the operation would then be shut down, only to reopen again in new offices, with new email addresses and a new website.
The money defrauded was controlled by the scam’s bosses and moved from bank account to bank account in Spain, Cyprus, Switzerland, Singapore, Hong Kong and the UAE, making it very difficult to track down. Eventually, the money would be placed back into the global system from genuine, legal bank accounts in the name of companies and front men that had no links to the organization.
The police operation closed down 15 such boiler rooms in Spain, two in the UK and one in Serbia, after two years of investigation.