I Lost £150K To Boiler Room Fraudsters

Mar 16 2008 By Jane Barrie Consumer Editor

The Judge Special Report Victim Loses £146k In Shares Swindle

A RETIRED businessman revealed yesterday how he lost s146,000 to boiler room share fraudsters.

Tom McHenry, 61, invested his life savings in 10 overseas firms after being cold called at home by a financial salesman.

But now the firms he was encouraged to plough his cash into have either disappeared or won't take his calls.

He told of his fraud ordeal days after police in the US arrested a father and daughter team who duped Britons into spending millions on worthless shares.

They were seized in a massive operation against boiler room fraud - so-called because the scamsters operate from basements in prestigious buildings in some of the world's best-known financial districts.

Tom, of Salsburgh, Lanarkshire, is one of thousands of victims.

Two firms advised him to buy shares in a series of other companies. His advisers have prompted a flood of complaints to financial watchdogs who say they are not licensed to give investment tips in Britain and are operating illegally.

There is no evidence that the 10 firms Tom bought shares in are part of the fraud but he has never received a penny back on his investments in 18 months.

The devastated dad-of-three said: "I am still in shock and I doubt if I will get any money back. I thought I was investing in the future. How wrong I was.

"I want to warn other people. If you receive a cold call at home like this, hang up, or it could cost you dearly."

Tom first received calls from brokers in 2005 a year after his wife Mary, a primary school teacher, died aged 58.

He said: "I was vulnerable. It's still difficult now to speak about her."

First, he was called by Cohen Green Advisory, who claimed to be based in Frankfurt.

Tom said: "They kept pestering me, phoning every week for a year. I kept putting them off but it didn't seem to do any good."

Tom, who used to run his own tools business, finally invested in November 2006, paying s5395 to Royal Petroleum Corporation based in Montreal, Canada.

Tom said: "Royal Petroleum sent me a shares certificate and everything seemed above board.

"The company was just listing on the stock market and was ready to take off.They told me I was getting in at the right time."

Tom invested a further s26,795 in Royal Petroleum in February 2007, before Cohen Green convinced him to back another firm, Geonadina Mining Corporation.

He paid a further s24,045 then s10,045, via Direct Settlements, of Switzerland, who acted as an intermediary and who, it turns out, are blacklisted.

Another agency Papillion Associates, of Geneva, Switzerland took s10,523 and s24,095 from Tom in March, as an investment in Future Power Industries, of New York and Costa Rica.

Between last March and October, Tom invested a total of s42,500 in seven more firms including s4010 in New York telecoms operator China Voice, and s15,554 in Maryland-based Neupara Corporation.

He finally realised something was wrong when the firms were no longer contactable.

That's when he called the Sunday Mail Judge.

We tried to phone and email all the firms that Tom invested in but received no reply.

Interpol, the City of London Police and the Financial Services Authority are now investigating Tom's case. Interpol said: "This type of crime is extremely widespread but we have a specialist team working on it."

Deputy chief inspector Bob Wishart, head of the money laundering unit at City of London Police, said: "Stockbrokers do not cold call people to buy and sell stocks and shares in Britain, they have a passive role.

"Any cold call like this should be treated with the utmost suspicion."

The FSA said: "We get 100 complaints a month about boiler room fraud and the typical investor loses s10,000.

"Authorised firms are not supposed to cold call to sell shares. We'd advise anyone who receives a call like this to hang up."

SUNDAY EAMIL

thejudge@sundaymail.co.uk