Early this year the writer had the privilege of attending a lecture given by the Detective Superintendent who heads the City of London Police Economic Crime Department. He described how the perpetrators of what has become known as ‘Boiler Room Fraud’ operate.
Victims and perpetrators are to be found amongst all ages and from all social backgrounds. The operators are people working at high pressure, operating from a small room in a country in which they are not approaching potential victims. They move about at frequent intervals. Their addresses are short-term convenience addresses, and telephone numbers are also frequently changed and they probably switch through to somewhere in a different country to the one in which the victim thinks they are dealing. The victims are people who have money available for investment.
This is organised crime on a large scale but the methods bear much resemblance to honest business. It is not unusual for crime and criminals to operate within the regular system of finance and commerce. The fraudsters’ publicity literature is well designed, their dealings with people appear informative and professional and are very persuasive, and the way they operate could teach some honest business people how to operate across borders! The money they ‘earn’ is expertly laundered.
The Detective Superintendent emphasised that their victims should not be denigrated as people who had fallen for a scam or those who were greedy and looking for a quick profit, but that they should be treated sympathetically as victims. He told of sad cases where people who had received redundancy pay or pension payouts, unaccustomed to financial dealings, had tried to invest their money to provide a steady income. Stress related illness or even suicide followed some peoples’ loss.
When the opportunity arose later in the year to hear the Detective Superintendent give an updated presentation I jumped at the chance. The Boiler Room operators now had Recovery Rooms!
Desperate to recover their losses, those who had been the victims of Boiler Room frauds wanted to recover their losses, and who was available to help them? The same people who had defrauded them in the first place. Of course they wanted an up-front payment to do so. The victims never again saw the original money paid over for investment or the second payment made in the hope of recovering the first. Nor did the see the perpetrators.
The Detective Superintendent described how policing had needed updated methods to keep abreast of the criminals and he used the phrase “policing the ether”. Those of us who have been working in the crime prevention and resolution field for some years realise that the criminals do not stand still. They are inventive. And we have to keep pace.
It is not easy to recover money taken fraudulently in this way. Asset recovery rates are low. The longer the time between the offence and reporting it, the more unlikely it is that the money will be recovered. Sometimes the police succeed. Sometimes victims succeed by engaging solicitors who in turn may use professional investigators from the private sector.
Victims, swallow your pride and report the matter to the police immediately you realise you have been defrauded. But better still do not invest money before having checks carried out to ascertain that you are dealing with bona fide business people. Such checks take a little time and cost a little money – but not as much money as you will lose if you become a victim. And you will save yourself all the trauma of becoming a victim.
Case Studies