An Indian-origin British national has been sentenced to seven years in jail for his involvement in a multi-million pounds fraud that operated through aggressive, high-pressure sale of shares of worthless companies to the old and elderly.
Rahul Natwar Patel, 35, who lives in Spain, operated the fraud across several countries along with another British national, David Arthur Vidgeon, 30.
Vidgeon has also been sentenced to seven years in jail for the fraud worth over 7 million pounds.
The two have been sentenced at the Ipswich Crown Court for duping around 1,250 investors and siphoning off around 80 per cent of the invested funds.
Vidgeon and Patel conspired to defraud investors, many of whom were retired and elderly, by high pressure selling of shares in small/obscure companies, with false claims about
their future worth, official sources said.
The fraudulent sales practice was carried out by unlicensed offshore brokerages known as "boiler rooms" under the control and direction of Vidgeon and Patel between April 2003 and November 2006.
The companies whose shares were sold were worthless.
Their function in this conspiracy was as vehicles used by Vidgeon, Patel and the 'boiler rooms' to take not less than 80 per cent of the investors' money.
The fraud was investigated by Serious Fraud Office (SFO). The 'boiler room' is a recognised engine of fraud.
'Boiler rooms' are essentially call centres, concerned in the selling of shares on behalf of companies. 'Boiler rooms' are not authorised and operate illegally, often from abroad.
The 'boiler rooms' sell by cold-calling and use hard-sell tactics.
The success of their deception is measured not only by the sums of money extracted but also by the nature of the people who were persuaded to part with their money.
Even people who believed they were experienced
investors were victims of the fraud.
SFO Director Richard Alderman said: "A boiler room is a predatory and orchestrated 'attack' on private investors so it's very satisfying to see justice delivered for such callous dishonesty."
Vidgeon's own boiler rooms generated in excess of 2.3 million pounds, nearly a half of which he retained, the rest being paid out to other conspirators.
Rahul Patel earned more than 960,000 pounds from the operation. Bank accounts in Spain, Latvia, Cyprus and other overseas jurisdictions were established to help manage the monies received from investors.
In passing the sentence, Judge Holt said: "It was a sophisticated and prolonged boiler room fraud and had as victims sensible, ordinary people many of whom lost life savings.
"An investor buying any of these shares will have a better chance of a return by buying a lottery ticket. You knew this and did not care."