A gang of ‘boiler room’ fake-shares fraudsters swindled £10m out of hundreds of middle-aged and elderly investors while living the high-life on the Costa del Sol, a jury has been told.
They lived in adjoining Malaga apartments and bought Rolls Royce, Bentley, Ferrari, Maserati and BMW vehicles after duping U.K. investors into parting with their savings for worthless shares.
In a coordinated swoop City of London Police arrested the ringleaders as they visited family in the North of England for Christmas and New Year.
“The money went into a black hole,” prosecutor Mr. Peter Stage told the Harrow Crown Court jury. “Investors are sending money after money after money across.”
Six of the ‘boiler room’ plotters have pleaded guilty and will be sentenced at the conclusion of the trial.
They are: Mark Brannan, 28, of Arlington Avenue, Newcastle upon Tyne; Sam Hamed, 25, of Byland Court, Washington, Tyne and Wear; Dean Hamilton, 26, of Cleeve Court, Washington, Tyne and Wear; Scott Henderson, 31, of Morgan Street, Sunderland; Babatunde Aluko, 29, of Clarence Avenue, New Malden, Surrey and 29 year-old George Abrue, of no fixed abode.
Hamed, Henderson, Aluko and Abrue have pleaded guilty to conspiracy to defraud and conspiracy to money launder and Brannan and Hamilton have pleaded guilty to conspiracy to defraud only.
Anton Deach, 25, (pictured) of Heaton Street, Prestwich, Manchester has pleaded not guilty to conspiracy to defraud and conspiracy to money launder and his trial is expected to last three weeks.
They were arrested on December 30, 2009, with Henderson captured at his girlfriend’s address in Pheasant Moor, Washington before police searched a room he rented in nearby King Henry Court, Castletown.
“It was an Aladdin’s cave of items used in fraud,” said Mr. Stage, explaining the room contained blank share certificates, bogus company information and rubber gloves.
Police also found evidence of payments to Deach of 10,000 and 2,000 Euros, but this represented a tiny part of his profits from the fraud, added the prosecutor.
“Deach was helping organise the new boiler room in October, 2009 and he said he was earning 30,000 Euros a month,” said Mr. Stage. “That is a pretty damning piece of evidence.”
Police also seized a Maserati stored in a Barcelona garage and an image of the vehicle – sporting a DCH registration - was Deach’s screensaver on his Blackberry.
The prosecution claim Deach managed a boiler room based in the garage of a Spanish villa after it was moved from offices above a row of shops in Majorca.
The gang were hired by ringleader Abrue – who has since been extradited from Sweden – a fraudster with a string of aliases who used fake identity documents, including passports and driving licences.
“Money comes in from investors and then goes into another Abrue account before being shuffled and moved on,” explained Mr. Stage. “Abrue was the man in control and got the most out of this fraud.”
The sales team pocketed 25% of all sales, with managers earning an extra 10% and they were supported by convincing websites, glossy brochures, fakes share certificates and other bogus company documents.
A total of 138 defrauded investors have given statements to police – including a ‘Top Fifty’ list of the biggest losers many of who lost hundreds of thousands each - including one investor who lost over £1m.
The jury were told Deach used the aliases Jason Vaughan and Thomas Thorpe, employing the latter to con £78,000 life savings out of one elderly gentleman.
“Deach comes from and was arrested in Manchester and one investor remembers a man with a Manchester accent unlike the other Geordie defendants,” said Mr. Stage.
The ‘boiler room’ specialised in pressure-selling techniques to sell shares in socially responsible renewable energy companies – promising huge returns.
A carefully scripted text was prepared for sales staff to learn with tips on how to answer difficult questions and rebut concerns voiced by potential investors.
Police found such a script for ‘Prestige Gold Crest’ on Deach’s laptop, claiming it was a company listed on the London Stock Exchange and had contracts with the Indian and Chinese governments, plus the I.M.F. and Central European Bank.
“Total bilge, no question of that,” Mr. Stage told the jury. “Whoever is using the script is giving advice to buyers and talking about undervalued shares and building up to bigger and better things.”
Investors were fleeced of even more cash when the gang demanded they pre-pay an 18% tax bill on dividends they were never going to receive anyway.
The jury were told Deach must have known what was going on.
“If you were in that boiler room how could you not know what was going on, with phone calls all day long and white sales boards on the walls,” said Mr. Stage.
The sales staff lived rent-free in a large resort complex – with Abrue picking up the tab – and were chauffeured into work every day.
Police later found a 5,000 Euro payment to Deach as early as July, 2009. “The Crown say Deach is in a location unknown working for George at this time.”
They also found mobile phone and email evidence of sales staff urging Deach to sort out wages.
“Why involve Deach if he has not got any pull?” asked Mr. Stage. “Computer evidence also shows he is looking at trades and past trades when he became manager.
“All the main players, people who have been charged, had Deach’s phone number.”
Trial continues……………
