Malta-registered firm in UK fraud bust

Fraud investigations into a Malta-registered company involved in a scam worth over €31 million led to a massive raid in the UK yesterday in which seven people were arrested. The company operated what is known as a boiler room in the UK, essentially a call centre from which people call vulnerable people and hard-sell bogus financial products or which turn out to be worth much less than advertised.

The company at first appears legitimate but that is usually just a façade.

The boiler room busted yesterday operated for a short period under one name and address before moving on, leaving empty handed the clients promised a lucrative investment. The company, which was not named by the UK Financial Service Authority, was registered in Malta and had money diverted to a local account through a Royal Bank of Scotland account, sources have told The Times. Malta's anti-money laundering police unit was involved in an investigation that led to the arrest of six men and a woman following coordinated searches in Surrey, West Sussex, London and Hertfordshire.

None of the arrested is believed to be Maltese. The same sources said that by the time the local financial service authority froze the company's accounts there was little more than €350,000 left.

The arrests are considered to be a success as the people behind boiler room scams are difficult to trace. In spite of efforts to educate consumers about the practice, people continue to be persuaded to part with their money over the phone in this way.

In announcing the arrests, the FSA reminded consumers "to hang up" on such calls.