Michael McInerney of Richmond, North Yorkshire, has been convicted of three counts of money laundering and sentenced to four and half years in jail, to be served concurrently, following a joint investigation by the Financial Services Authority (FSA) and City of London Police (CoLP). McInerney has also been disqualified from being a company director for seven years. The trial took place at Southwark Crown Court.

McInerney acted as a banker for fraudulent share sales orchestrated by Tomas Wilmot, Kevin Wilmot, and Christopher Wilmot. The Wilmots controlled a syndicate of boiler rooms that defrauded an estimated 1,700 investors out of £27.5 million. They were jailed in August 2011 for a total of 19 years.

The prosecution followed a joint investigation, code-named ‘Operation Slick’, conducted by the FSA and the Economic Crime Directorate of CoLP. The prosecution was conducted by the Fraud Prosecution Division of the Crown Prosecution Service. McInerney was originally arrested on 31 October 2007.

Early on in their scam the Wilmots banked the proceeds of their fraudulent sales in two UK bank accounts in South East England, where they were based. In late 2005 however they decided to put some distance between themselves and the money; to do this they enlisted McInerney.

McInerney opened bank accounts for three different companies (Rock Solid Asset Management, Worldwide Assets Limited and Universal Management Services) which were purportedly for property management purposes. In reality they were set up with the sole purpose of receiving the proceeds of boiler room fraud. McInerney arranged the accounts so that cheques could be accepted into them from a variety of different company names and £12 million was paid in to these accounts between January 2006 and October 2007.

McInerney also arranged transfers of funds to offshore accounts in Jersey and Malta. These accounts had been established after companies were registered in the British Virgin Islands, Anguilla, and Gibraltar. In turn the funds were distributed to accounts in Hong Kong, Dubai, Canada, Lithuania, Spain, Switzerland, Slovakia, and Austria. These accounts were operated by the Wilmots and others involved in their scheme.
 
At sentencing Her Honour Judge Taylor said:
 
“It was a serious and sustained criminal enterprise in which you played a sustained and vital part. From the time you were in receipt of victim information you can have been in no doubt of the type of investor or of the losses they would have suffered.

You were a willing and able participant and made suggestions as to how to make the process more efficient.”

Tracey McDermott, the FSA’s acting director of enforcement and financial crime, said:
 
“This is another key step in our continuing fight against the serious threat to consumers that is share fraud. McInerney played a key role in the Wilmots’ complex and elaborate con and he is now paying a very heavy price for doing so.
“This sentence sends a clear message that the court takes boiler room offences seriously and will hand down significant sentences to those involved in them.”

Share fraudsters, commonly known as ‘boiler rooms’, usually contact people by telephone and use high pressure sales tactics to con investors into buying non-tradable, overpriced or even non-existent shares. Boiler rooms are unauthorised, overseas-based companies with bogus UK addresses and phone lines routed abroad.
 
Background:

1. A copy of the indictment can be acquired by contacting Southwark Crown Court and quoting reference: T20107089

2.   Tomas, Kevin, and Christopher Wilmotwere convicted of conspiracy to defraud on 22 August 2011.
3.   The FSA recently announced that it was contacting more than 76,000 people named on an investment scam target list.
4.   In June 2011 David Mason was sentenced to two years in prison for boiler room fraud.
5.      The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
6.      The FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013. The Financial Services Bill currently undergoing parliamentary scrutiny is expected to receive Royal Assent by the end of 2012.