ECONOMIC FRAUDS
DETECTION   &   PREVENTION   INC.
Our goal is to educate, warn and protect our clients
about frauds which can negatively impact their lives.

News

As explained by: E.C. "EFDP Consultant"

DEFINITION of "Boiler Room":

  • In business, the term Boiler Room refers to an outbound call center selling questionable investments by telephone.
  • A place where high-pressure salespeople use banks of telephones to call potential investors from a list (known as "Sucker lists") in order to peddle speculative, even fraudulent, securities. A boiler room is called as such because of the high-pressure selling.
A broker using boiler-room tactics gives customers only positive information about the stock and discourages them from doing any outside research. Boiler-room salespeople typically use catchphrases like "it's a sure thing" or "opportunities like this happen once in a lifetime".

Boiler-room methods, if not illegal, clearly violate the National Association of Securities Dealers' (NASD) rules of fair practice. The North American Securities Administrators Association estimates that investors lose billions; $10 billion a year - roughly $1 million an hour - to investment fraud promoted over the telephone." (1)

Criminal Organizations such as "Boiler Rooms" are defrauding US and non-US Citizens out of billions of dollars.

Their method is simple but efficient. They lure their victim’s in by creating web pages with fancy names that make the unsuspecting victim believe they are a real company. They will make contact with the victim and sell them worthless shares in a non-existent company. Sometimes they will conduct illegal transactions by selling real shares in a legitimate company; however, this is illegal as they cannot make this type of transaction. Most often, these people are cold callers and not financial advisors, conmen and women working for illegal companies, based in Canada and the United States.

These types of schemes began with a well know boiler room, which was based in Amsterdam. There were three partners, Sandy Winnik (see NEWS) is one of the three who is currently in the USA, where he is making his way through the United States judicial system and may serve 20 years in federal jail. His other two partners are free continuing to conduct business as usual.

Witter Walwyn:
Witter Walwyn is just one of the thousands of "Boiler Rooms" worldwide. Witter Walwyn is one of the many so called Boiler Rooms set up in Holland. It took the work of the Swedish Financial Authorities in order to stop this one. Make no mistake the continuation of the their scam did continue through another so called company, then calling themselves Denton Mergers & Acquisitions and later by many other names.
The Swedish authorities estimate the number of Swedish victims alone at 1.500 to the tune of 35 million euros. After Witter Walwyn was closed down, the same perpetrators kept on ripping off the same investors along with new ones under another pretense and/or a different scam.
The Swedish authorities decided to close the investigation believing that their job was done at this point; "CASE CLOSED". Unfortunately, they did not follow the money, the number one rule in most criminal investigation.

The Dutch authorities took over the investigation and it has taken 5 years or more to settle this case in court. There in Amsterdam they apprehended two managers, small figures in reality. The two persons apprehended were just puppets under the control of the real perpetrators. The Dutch authorities made the same mistake as did the Swedish Authorities; they did not follow the money trail.

They decided that it was enough to go after the two small puppets and freeze their assets there in Holland. They had two condominiums under their own names. Some might say, Whoopi Doo Dah! How is it possible for ALL the victims try to recoup (To get an equivalent to their losses) their investment having just two condominiums to split between everybody? (In Holland, oddly enough, there was a very young criminal investigator who died in a car crash while investigating this case)

Witter Walwyn was offering exclusively, shares of few companies that ran, owned, and directed by the same people. In addition, keep in mind that the Witter Walwyn salesmen were never licensed brokers or anything even close to it. Maybe this was why they were offering restricted shares of companies with very little movement, and/or private companies with no movement whatsoever.

The perfect crime needs the perfect victim. The citizens who have fallen prey to these scams are in large number Swedish citizens.

In February 2012, I traveled to Sweden in order to do a little follow-up, and this is what I encountered: One of the criminal investigators talked with me at length and he disclosed the number of Swedish victims. He also said that the Swedish Financial Authorities were not responsible for telling grown adults how to invest their funds. I inquired that if the Swedish investors were paying their taxes, should they not be entitled to receive at a minimum, protection from the criminals inside and outside of Sweden. He also pointed out that there was enough credible evidence identifying some of said directors and owners of the so call exclusive companies they offered, residing in the United States. The Swedish Financial Authorities responded to the United States, and at that time there was very little interest on the part of the American authorities to prosecute anybody. Currently, this has changed.
I decided to pay a visit to the Finansinspektionen (Sweden's Financial Supervisory Authority). They were familiar with me, due of our continued correspondence via Emails. To my surprise, I was not received well by anyone. As a matter of fact, their attitude was that of extreme rudeness towards me. This was a great disappointment after my traveling thousands of miles (at my expense) to meet with them.

While in Stockholm I wanted to meet and talk to some of the victims. I informed them of which hotel I was staying at, and that I was available to talk to them and try to answer some of their questions.

Among the investors (victims), I encounter a nice gentleman, a doctor by profession. All of his transactions were done through the Witter Walwyn Office. He explained to me how the whole transaction happened. He added that there were many red flags while he was making the so call investments. Unfortunately, he acted against his own basic instinct and followed through. He also stated that he had sat down in a hotel in Stockholm with one of said crooks who he described as ‘looking-like’ one of the characters from the Sopranos. He described him as having a flashy watch, flashy clothes, looking like he had a lot of money ...Yes! All the red flags were there, and of course, he gave him more money. All together under the Denton Mergers & Acquisitions scam, he has lost approximately $167.000.
Another gentleman I met was also a professional doing business for the Swedish government, with a very similar story to tell.

The criminal investigator in Sweden tried to explain to me, the history of Sweden (how it was at one point, a fishing port), and how the people themselves were simple, with a simple way of thinking, and with money to burn.

After this experience I understand that the only way to stop these criminals is to warn and teach the unsuspecting investors. Education will be their best tool in fighting these against this very large and growing "Boiler Room" industry (There are many more such Boiler Rooms operating under many other names).

Investors have to come to the realization that the only way for them to have any chance at recuperating anything, is to file a lawsuit in the U.S.A. against the Directors and Owners of the companies that they own. Also keep in mind, that all other monies you have sent out to pay for removal of restrictions, taxes, or government fees, are all part of the same scam that need to be included as part of the fraud.

I hope this will help a few of you to realize you are victims of a very large and growing international scam. It is important for you to become an educated consumer and to take the time to invest in someone to research and do due diligence on companies for you before investing.
Don’t be one of the numerous victims who invest their hard earned monies in these shell companies. The best defense is to become an educated consumer. Below are a few of the many illegal companies and examples of their creation:

  • Capital Action Ltd (CLONE of Hong Kong firm) capital-action.com
  • Keystone Capital Group (non-existent Japan firm) keystonecapitalgroup.com
  • Kyodo Securities (non-existent Japan firm) kyodosecurities.net
  • Capitol Hill Group (non-existent UK or Hong Kong firm) capitalhillgroupltd.com
  • Deep Blue Group (non-existent Madrid, Hong Kong, Tokyo firm) deepbluegroup.com
  • Reid & Stone Ventures (non-existent Rome, Hong Kong firm) reidstoneventures.com
  • Cygnet offshore (non-existent Shanghai, Hong Kong, Seychelles firm) cygnetoffshore.com
  • United Global Trading (non-existent Japanese firm) unitedglobal-trading.com unitedglobaltrading.com
(1) - http://www.investopedia.com/terms/b/boilerroom.asp



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