WHEN Thomas Guerriero came knocking, pulses quickened at Oxford City, a club in the sixth tier of English football. The snappily dressed American appeared to be building a thriving conglomerate that included sports teams and private universities. He bought a 50% stake and talked of propelling the club into the big time.
The tie-up appears to have been an own-goal. Mr Guerriero’s stake has been frozen as he awaits trial in America on ten charges, including fraud and witness-tampering. (He denies wrongdoing.) Oxford City has lost face, but little money: its assets are safely parked with the charity that owns the other 50%. Others have fared worse: prosecutors allege that Mr Guerriero ran a “boiler room”—a brokerage that uses high-pressure tactics to sell shares and other investments of little or no value to unwary individuals over the phone—which bilked 150 American investors out of $6.5m.
Boiler rooms trade on coercion and intimidation, and this one was no exception, say prosecutors. Victims were told that their conversations had been recorded and were legally binding agreements to buy, and that if they reneged they would face late fees and property liens. It is alleged that one even liquidated an annuity to hand over $250,000.
The heyday for boiler rooms was the dotcom boom of the 1990s, when Jordan Belfort, the “Wolf of Wall Street”,...Continue reading
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