Fourteen Britons held over shares scam in Cambodia
By John Aglionby
Date: July 17, 2003
Fourteen Britons were among 20 foreigners facing prosecution in Cambodia after being detained on suspicion of operating a "boiler room" share trading racket and setting up an unlicensed international telephone calling system, investigators said yesterday.
Officials at the post and telecoms ministry believe the unnamed foreigners encouraged investors in Hong Kong and Britain to buy stocks and bonds in companies which were suspect or did not exist.
Chem Sangva, an official at the ministry, said the operation started in Cambodia on June 27 after the detainees, including 13 British men, one British woman, two Americans, a Thai, an Australian, a New Zealander and a Filipino, had been forced to flee other countries. The Britons were aged between 24 and 53 and came from across the UK.
"They used to operate in Laos, but after problems there they moved to Thailand," said Mr Sangva. "However, Thailand knows about them, so they moved to Cambodia."
The operations are known as boiler rooms because of the high-pressure environment in which the traders work.
Two years ago Thailand uncovered a huge boiler room which was mainly targeting Australians.
The scams gained worldwide publicity in 2000 with the release of the Hollywood blockbuster Boiler Room, starring Giovanni Ribisi, Vin Diesel and Ben Affleck.
Set in New York, the film charted the rise and fall of an unlicensed brokerage, showing the aggressive tactics used by its unethical twenty-something traders to con unsuspecting investors.
In addition to the unlicensed trading, the detainees were alleged to have set up an unlicensed international telephone gateway known as a voice over internet portal through which they could make international calls on local phone lines and the internet, bypassing Cambodia's two licensed international networks.
Mr Sangva said the foreigners told locals they were establishing a non-governmental organisation, the Cambodian Rehabilitation and Development Programme, "to help Cambodia".
"In fact it was a cover for their financial operation inside the building," he said.
Mr Sangva said that the alleged scam, which involved unauthorised share trading on the London, Hong Kong and other European stock exchanges, cost the Cambodian government about ?17,000.
It was not known how much money the alleged fraudsters may have conned from unwary investors.
General Sao Sokha, the head of Cambodia's military police, said yesterday he had been contacted by the post and telecommunications minister on Tuesday and told to raid the glass-fronted office building in the middle of the capital, Phnom Penh, where the scheme was based. "We went to the place and found an illegal communications operation in progress [being run] by 20 foreign people," he said.
"Right now, the foreigners are being interviewed to find out about the leaders."
Mr Sangva said the alleged mastermind, thought to be a Briton, had already fled to Thailand. Officials seized 28 computers and other office equipment in the raid.
Gen Sokha said that the foreigners were being detained by his troops but they would be handed over to the civilian authorities because the matter came under the jurisdiction of the ministry of the interior.
Khut Sopeang, the chief prosecutor in Phnom Penh, said he expected the foreigners to be sent to him today to be charged.
He declined to speculate on what penalty they might face because it was not yet clear precisely which laws they had broken.
The detainees' lawyer, Keo Ya, said that he expected them to be charged. Once formally charged, suspects in Cambodia can be held for up to six months while further investigations are carried out.
Foreigners have been known to buy their freedom or pay to have their charges reduced.
Cybercrime is rare in Cambodia, where internet penetration is low.
The telecoms industry is in a state of limbo because parliament is debating a bill to regulate it.
None of the detainees was willing to discuss their situation yesterday.
A Foreign Office spokesman said British embassy consular officials had visited the Britons yesterday, but they had declined an offer of help.
"We therefore don't have any details about who or what they are," the spokesman said.
"However the offer [of consular assistance] is still valid and they can contact us at any time," he said.
"We will be liaising with the local police to monitor developments."
Original article: http://www.guardian.co.uk/uk_news/story/0,3604,999495,00.html
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