Offshore Capitalist

Oxbridge-Sounding Phone Scammers in Spain Seduce U.K. Investors

Bloomberg — Credit controller Linda Reay was sorting the daily pile of bills back in 2005 at the bed- manufacturing factory where she worked near Carlisle, an industrial city in northwestern England. Then she took a phone call that would destroy her retirement dreams.

The smooth-talking caller identified himself as a London stockbroker named Robert Samuel. Nearing retirement from her 17,000-pound-a-year job, Reay took the salesman’s advice to invest in the stock market. Within six months, her family had sent more than 13,000 pounds $20,570 to a St. Lucia-based company named Damak Group to invest in ValiRx Plc, which Samuel said was developing cancer-fighting therapies. Although ValiRx is a real London-based drugmaker, the investment pitch was pure fiction and Reay would never see her money again.

“I thought you could make a little bit from what you’ve got,” says Reay, now 61 and retired. “You see that share prices can go up in a few days and you make money, so I thought maybe it could happen to me. It sounded aboveboard.”

Robert Samuel was a false name, just one of a group of cocaine-fueled, self-styled “telesales terrorists” reading from a script 960 miles 1,545 kilometers away in Barcelona. It was there that Damak preyed on investors with a series of share- selling scams known as boiler rooms.

Reay is among 450 victims ripped off in the space of six months by Damak’s cold-callers. A two-year police investigation culminated in four people being sent to jail in April, and police officers are still on the hunt for the 2.4 million pounds stolen from investors and funneled through accounts in Hong Kong, St. Lucia and Spain.

Cold Callers

That’s just a fraction of the 300 million pounds that police estimate boiler rooms will steal from U.K. investors this year compared with 100 million pounds in 2007. They say cold- calling share sellers are finding it easier to lure victims as people look for quicker returns in the wake of the financial crisis.

via Oxbridge-Sounding Phone Scammers in Spain Seduce U.K. Investors – Bloomberg.com.

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