Carbon Credits

From the London Daily Mail:
Police raid City office after we warn on the menace of investment scams for worthless carbon credits
They sound so ethically correct. They appear to offer a decent return on savings in these troubled times. Yet carbon credits are at the centre of increasingly adventurous scams.

And last Tuesday morning, police investigating a suspected fraud network of investment firms selling worthless carbon credits arrested ten men and a woman in co-ordinated raids on offices in the City of London, Essex and Hertfordshire.

The raids follow mounting official concern at the scale of carbon credit scams, where investors pay thousands of pounds for overpriced certificates that are said to be linked to environmentally friendly projects such as tree planting.
These mokes will probably will not serve any hard time and they will just open up a new shop after they pay off the right people but still, good to see some effort being made. Details of the raid:
Staff were ordered not to make phone calls, so that they could not tip off other police targets, and to produce identification.

Several were arrested on suspicion of conspiracy to defraud and money laundering. Others were released throughout the morning as their identities were confirmed and criminal record checks were carried out. Computers and company records were seized and carried from the building in sealed plastic evidence bags.

Salesmen�s desks were strewn with paperwork, including sales scripts. One read: �The project we were last trading is fully sold! Clients who were fortunate enough to get holdings are going to see 20-25 per cent on a 9-15 month hold! But look, listen, don�t worry yourself that you missed that one. I have it on good authority from my Senior Trader that something is being released tomorrow .  .  . the one which is going to set this market alight.�

The salesman then tells the victim he has arranged for him to speak to the �Head of Emissions�, adding: �This is somebody you want fighting in your corner. He�s made a lot of wealthy clients a lot of money. He�s just got back from Geneva yesterday, so we�re actually in luck that he�s in the office today.�

A follow-up script headed �Objection Handling� tells salesmen how to treat reluctant investors. Anyone with doubts about the financial markets in general is given the �Boomerang� response: �That�s exactly why I am calling you today, because of the poor performance of the stock market and financial advisers that quite frankly couldn�t deliver a pizza, we find ourselves in financial embarrassment.�

If this fails, the salesman is told to plead: �Look, it�s my first week in the job, my boss won�t take his eyes off me, I just need you to hear me out and let me send this brochure off to you.� Staff are �psyched up� by reminders of what they can earn. Two desks were decorated with pictures of Rolex watches. One had a photograph of a sports car. A young salesman who said his partner was expecting a baby had a note on his desk, �I am a self-made millionaire�, repeated over and over. The sales pitch clearly works. Whiteboards covering most of one wall of the office show how Hudson Forbes� salesmen have performed. One deal raked in �16,850, another �20,000.

One potential victim had a narrow escape. Mrs Harriet Phipps from Beaulieu, Hampshire, was about to send a cheque for �5,005 for carbon credits. She says the salesman had told her she was investing at a cut price. �He said the credits were being sold by a man who owns a lot of investments in the Far East, and he needed the money in a hurry,� she says. �That�s why they were going urgently, cheaply.�

There is virtually no resale market for the certificates and investors typically lose every penny.
And these are people who cannot afford the loss -- people who succumb to pressure, who don't know anything about financial instruments and who are panicky about their savings. There should be a special circle in Hell for these "traders" -- no soul at all.

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This page contains a single entry by DaveH published on December 9, 2012 9:34 PM.

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