Father and sons jailed for £27.5m boiler room scam

Published on 23 Aug 2011 under category: article

Massive Boiler Room Fraud

A father and his two sons were yesterday sentenced to a total of 19 years in jail at Southwark Crown Court for stealing £27.5 million from investors through a boiler room scam.

The ringleader of the scam, Tomas Wilmot, was sentenced to nine years imprisonment while his sons Kevin and Christopher received five years each after being convicted on four counts of conspiracy to defraud. The family controlled a string of 16 boiler rooms that defrauded an estimated 1,700 investors through the sale of low-value and sometimes non-existent shares.

The boiler rooms were based mainly in Spain but used a string of companies stretching from Andorra to the Caribbean as the back office, according to the Financial Services Authority (FSA), which ran a joint investigation with City of London Police into the scam.

Judge Leonard QC told Tomas Wilmot: ‘You ran a highly successful enterprise. You deprived many individual investors of substantial amounts of money; for some that was money they could not afford to give up. It was a staggering amount of £14 million. You’ve sailed so close to the wind in your commercial enterprises it was not a surprise the FSA investigated you.’

FSA Investigation

The FSA launched its investigation in July 2008 after a separate boiler room probe implicated the Wilmots. City of London Police searched the homes and offices of the Wilmots in Guildford, Horsham and Bramley in May 2009. The three were charged in June 2009 and the case went to trial in May 2011.

Tomas Wilmot organised the boiler room scam and was responsible for procuring the shares while his son Kevin administered the fraud and Christopher designed and hosted the websites for the schemes.

FSA acting director of enforcement Tracey McDermott said: ‘This was a highly sophisticated scam that made use of offshore structures to launder the funds, put distance between the Wilmots and the boiler rooms, and ultimately disguise the nature of the business. That meant that what started out as a UK-based FSA investigation had to evolve into a joint, then global, operation to bring the perpetrators to justice.'

The FSA had the support of 11 overseas regulators and police forces plus European Union counter fraud agency Eurojust for its investigation. The Crown Prosecution Service said it planned to apply for confiscation orders against the Wilmots.

Cubism Law Fraud Expert, Dan Hyde commented,

"This case demonstrates the international nature of sophisticated boiler room fraud and, in securing convictions, the FSA’s ability to co-ordinate a global investigation across 10 National jurisdictions. That said the case exposes the inadequacy of sentencing in the UK in relation to high value, white collar fraud. The sentences imposed (a record 19 years in total) appear lenient when one considers the syndicate netted some £27.5m of which £14m was transferred offshore; offshore funds can be notoriously difficult to seize and the prospect of serving only half the sentence handed down (Two and a half years for the sons) plus any 'default sentence' for failing to repay the confiscation amount would be greatly alleviated if a large retirement fund awaited."