Net share sting claims UK victims
Pumped then dumped
A small Welsh business lost a "substantial amount of
money" after buying shares in a non-existent company which lived only online.
The fraudsters behind the scam also ensnared a Manchester-based businessman and theire could be many more British and Irish victims, according to the Puget Sound Business Journal.
Alpha Fasteners, in Brecon, says it was conned by a Zurich-based concern called Smith Fairchild which claimed to be a major VC.
Smith Fairchild contacted Alpha in March this year, pumping shares in a Seattle-based company called Sun Biometrics, supposedly soon to get a listing on NASDAQ.
Alpha Fasteners researched the company online and duly parted with its cash. In return it received a certificate for the purchase delivered by courier.
The fraudsters then pushed their luck. In June, yet another company, called Warren and Baker, appeared on the scene. The new players told Alpha Fastening that their shares "were doing very well, but they needed to pay an extra bond".
At last the penny dropped for Alpha, which promptly got on the blower to the Financial Services Authority. The FSA informed them that there were no such companies as Sun Biometric, Smith Fairchild and Warren and Baker. Their Web presence was entirely illusory.
Here are the URLs which fooled Alpha
As you can see Sun Biometrics site is still live.
Alpha paid for its shares through Wells Fargo bank in the US and HSBC in Taiwan. This gave it a false sense of confidence, it told the Forum of Private Business (FPB).
The Sun Biometrics scam was set up over months, by fraudsters operating out of many countries. Puget Sound Business Journal has an excellent, exhaustively-researched feature on the sting. ®