Damian Williams, the United States Attorney for the Southern District of New York, announced that the boiler room operators Christopher Wright and Steven Hooper were sentenced to 52 months in prison and 42 months in prison, respectively, for defrauding elderly victims in connection with the fraudulent sale of stock and fake carbon credits as part of an over $16 million international telemarketing scheme. In total, victims lost over $16 million. Wright and Hooper previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed the sentences.
From in or about 2009 up to and including in or about 2015, Christopher Wright, Steven Hooper, and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds of the fraud through bank accounts in the US and foreign countries. Wright and Hooper used the services of boiler rooms to identify and cold-call potential victims, who were primarily elderly or retired individuals residing in the United Kingdom.
The boiler room agents persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious. Many victims were persuaded to make additional investments under the false pretense that they would not be permitted to sell their holdings until they purchased more. In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States. Victims who tried to sell their investments found they were unable to do so. The victims never received a refund on their principal or any return on their investments.
In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, Wright, Hooper, and their co-conspirators set up overseas bank accounts, including in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies, which were used to launder a substantial portion of the fraud proceeds.
Between 2009 and 2011, the scheme sold the stock of Florida-based corporation DirectView Holdings, Inc. (“DirectView”) to the victims purporting that the shares were a no-risk, short-term investment in a debt-free company, and that the shares were likely to increase over 100 percent in value in a short period of time. In fact, DirectView’s annual report filed with the U.S. SEC for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView.
From 2011 to 2015, Wright, Hooper, and their co-conspirators engaged in the sale of fraudulent “carbon credits.” The boiler room callers appealed to victims by claiming that the investments would be environmentally friendly and help address the climate crisis. “Carbon credits,” which are issued as part of governmental and voluntary regulatory regimes, are permits representing the right to emit a certain number of tons of carbon dioxide into the atmosphere. The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return. In fact, the carbon credits and offsets that were sold to the victims were fake and did not represent any actual carbon credits or offsets.