London.—The 15 Britons and two foreigners arrested in a joint Anglo-Spanish police operation in Majorca earlier this week are suspected of running one of Europe's biggest “boiler room” scams.

City of London police sources told the Bulletin yesterday that while they are keeping their distance from the operation because it was very much led and carried out by the National Police, they put a figure on the alleged fraud of around 50 million pounds and said that they are expecting between 300 and 400 victims to come forward in the United Kingdom. “With these kinds of telephone investment scams, the culprits would often target alleged clients two or three times. “On the second call, they would tell their clients that their shares were selling well and they were enjoying a good return on their investment while the third call would be of negative news but assurances that their initial investment would be recovered would be given,” the source said.

This type of fraud involves fraudsters cold calling members of the public to try to get them to buy shares which are either worthless or do not exist.
Boiler room fraudsters pose as stockbrokers and contact members of the public, using hard-sell techniques to offer investment opportunities in the form of shares.

The gang who were believed to be cold-calling thousands of residents in the United Kingdom were arrested during armed police raids in Palma, Andratx and Santa Ponsa.

The arrested men, from Nottinghamshire, Essex, Luton and London, all appeared briefly in a Palma court this week but are yet to face trial.
Eleven bank accounts have been frozen.
City of London Police, who worked with the Spanish authorities, said younger members of the alleged scam are thought to have been lured into the operation by crime bosses who targeted them in English-speaking bars.