Leader of $3.6 Million Boiler Room Scam Sentenced to 11 Years' Imprisonment

Michael Nascimento, the leader of a £2.8 million ($3.6 million) boiler room scam, has been sentenced to 11 years’ imprisonment on Monday. In a separate prosecution, he was also sentenced to an additional two years, making his total sentence 13 years.

Nascimento’s sentence follows that of five other individuals that were all involved in the scam. As Finance Magnates reported, on September 5, 2018, Charanjit Sandhu, Hugh Edwards, Stuart Rea, Jeannine Lewis, and Ryan Parker were sentenced to a total of 17.5 years’ imprisonment.

The Financial Conduct Authority (FCA), which brought the case forward, said that this was one of its largest ever investigations. Overall, more than 170 investors lost a total of £2.8 million with the scam targeting the elderly or vulnerable. The funds that were solicited from investors went towards maintaining the fraud and Nascimento’s pocket.

Commenting on the case, Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said: “This brings to an end the FCA’s largest fraud prosecution which has seen the perpetrators imprisoned for a total of 28.5 years, affording justice to victims who were the subject of their calculated deception. We are continuing to fight for compensation for victims out of their assets.'”

Because Nascimento was the mastermind and leader of the operation, he had a separate hearing to the five other individuals involved. His sentencing was concluded at Southwark Crown Court on Monday.

During the trial, the judge His Honour Judge Hehir said that Nascimento had shown "utter cynicism and contempt" for some of the victims. Adding that "despicable was not too strong a word" to describe his actions. Judge Hehir added that Nascimento was "very adept at getting others to do his dirty work for [him]."

Charanjit Sandhu to Serve Additional Time

Out of the five individuals who were sentenced to jail earlier this month, Sandhu got the largest sentence of 5.5 years. Sandhu was a senior broker who used bullying tactics and fake names to con unsuspecting investors. Specifically, the trial judge, Judge Hehir, called his conduct “cruel and callous” and “chilling.”

On September 4, 2018, Sandhu received an additional consecutive sentence of 3.5 years, lifting his jail time to nine years. The extra time is in relation to another matter separate from the boiler room scam.

Details of the Scam

Between July 2010 up until April 2014, the scammer’s cold-called members of the public to con people into purchasing shares in a company that apparently owned land on the island of Madeira.

Investors were told that their investments would reap guaranteed returns of between 125 percent and 228 percent; however, none were ever paid. The scammers told their victims that they would see the returns once permission was granted to build 20 villas on the land which would increase the land’s value.

As part of their tactics, the scammers said that the scheme was partnered with Barclays, planning permission had been granted for the villas, there was a guaranteed share buy-back and the Four Seasons or Hilton Hotel chains had agreed to buy the development once it was completed for £43 million.

As can be expected, none of this was true, and neither Barclays nor the hotel chains had any involvement in the fraud.