Boiler Room:

A room or office in which many operators engage in high-pressure telephone sales, especially of risky or worthless investments.

Long before I became a Police Officer or a Private Investigator, I inadvertently worked in a Dutch boiler room. Run by South Africans, British, and the odd Aussie.

I had some suspicions at the time. It was actually confirmed years later when the hammer finally dropped on the bosses.

Enter the Dragon

In April 2001 I was looking for another gig. I worked in retail sales at a prestigious jewellery store in an upmarket Cape Town shopping mall. The mall was still under construction during the first stock take, workers and equipment covered the floors. When it was completed a couple weeks later it became a marble floored retail palace. In those days though it was a dust bowl. 

Retail work sucked. The only retail work that didn’t suck was my job immediately before this one.

That blessed clothing store at the Cape Town Waterfront where I was to meet my future wife. Again I just didn’t know it at the time.

I had applied to a few local recruitment agencies. As fate would have it, the first one I walked into would send me to the Netherlands.

I was going through the usual registration process when the recruitment agent asked if I had any other passports. When I mentioned having a European one her eyes lit up. I’m sure she saw her commission rising from ground level apartment to the penthouse. She started her pitch.

She went on to explain that she was the exclusive recruiter for an international marketing company based in the Netherlands, Rotterdam.
Sales and Marketing positions. Payment in Euro. Free return flights paid for by the company. The only thing was it was night work. Monday – Thursday night. Knock off on Friday morning then return again for Monday night. They wanted persons aged under 30.
I fit the bill on all counts.
 
South Africans were their intended target workers. They were hard workers. The Rand was piss poor compared to the Euro. There was overseas earning potential. European passport holders meant you could become an international employee. Convert your Euros back into Rands when returning home and live well.
Make some good money in Holland and return to SA with an awesome exchange rate.
They also knew young South Africans were desperate to dump the Rand and hug the Euro.
 
I agreed to a telephonic interview. A week or so passed before the recruiter called and said I would be contacted the following evening.
The call came in.
 
 A female PA asked me to hold the line for Mr so and so. A long wait.
An Aussie guy finally came on the line and started the interview.
Pointed aggressive type questioning followed. I had already formulated some answers based on what I though they would want to hear. “We’re looking for motivated sales closers. Winners. Blah blah.”
He asked me to hold on some more. Another long wait. More questions. When he had satisfied his question quota he informed me the recruitment agency would get back to me.
 
I later discovered the PA and the hold the line stuff was all a ploy.
The only woman I ever saw working for the company was one of the South African guys girlfriends. They lived together in Rotterdam. I don’t know even know what she did in the office. Admin? 
She was used in these interview calls to give the illusion of a high powered businessman who had limited time for these phone interviews. His time was just too important for potential junior employee recruits.
 
The call came in a few days later confirming my successful interview.
 
June 1st – Lufthansa flight to Rotterdam via Frankfurt. I guess I was moving to Holland.
 
 
Boiler Room courtesy New Line cinema
 
 
 
Ocean International Marketing
 
We touched down in Rotterdam bleary eyed off two flights. Five guys from Cape Town including me.
Jimmy. Lionel. Two brothers of Italian/South African background, Marco and his younger brother who’s name I don’t remember.
Ocean’s newest sales and marketing guys.
They had all been sitting in rows close to me on those flights. Jimmy two seats over in my row. We just didn’t know it.
 
A Dutch representative from the company collected us and drove us to a small hotel which would be our immediate home.
Courtesy of the company for the first two months.
During the drive from the airport I peppered him with questions about the rental cost of apartments in the city. Where did he recommend etc. He told me I was getting ahead of myself. You’ve just arrived, just relax at the hotel for now.
We arrived on a Saturday. First day at the office wasn’t till Monday.
Everyone went out in Rotterdam drinking. I didn’t. I was exhausted and slept.
 
We bunked with each other in the small hotel rooms. The two brothers shared. Lionel got his own room for a week before his buddy Dave was due to arrive. Jimmy became my roommate. I got along instantly with Jimmy. 
Jimmy was from Leeds in the UK.
Jimmy was known as Jimmy to me and everyone in Rotterdam.
Jimmy was known as Andy to his girlfriend in Cape Town and his friends around the globe.
Jimmy looked a little older than the under 30 age group mandated for this job.
Jimmy was actually 37. He’d had one of his passports doctored to show his age as 30. He didn’t use it for international travel.
He just showed it to Ocean.
Jimmy was a naughty bugger. And very funny.
 
I liked the vibe of Rotterdam from that first weekend. It was Summer in Europe which helped. 
The people were friendly and pretty outgoing.
Marco’s younger brother took to calling the place; Rotten Ham.
I thought that was harsh.
 
The Chicken Or The Egg
 
On the first Monday we hit the office. A tall building downtown near the Rotterdam docks.
The open plan office was full of desks and around twenty suited guys, give or take.
We were led into a conference room. 
An Aussie guy, Andrew presided. Must have been my interviewer as I never met another Australian guy in my four weeks there.
He went straight into material based, financial boasting. He shot the cuffs of his shirt to reveal his gold watch.
He started swearing in his Aussie accent about how much f***ing money he was making. He sounded ridiculous.
He was the Ben Affleck character in Boiler room. At least he was trying to be. He wished. He didn’t look or sound nearly as cool.
 
It was explained to us that Ocean International Marketing had American investment clients. Doctors and Dentists. Hence the night working from the office. Nighttime in Europe. Morning and afternoon stateside. Ocean managed their portfolio’s.
We weren’t told what their portfolios were.
 
The comparisons to the Boiler Room movie didn’t stop there.
We were led to a back room of the office. Sitting there I could observe the entire floor. 
It seemed as if all of the guys had seen the movie and were modelling their behaviour on it.
 
The guys standing at their desks talking loudly, excited, getting animated.
If one of the boys were closing a phone sale he would stand up on the desk for all to see. It was encouraged.
 
On one of the nights at work everyone in the office seemed to be watching a British guy. A middle manager, Alan.
Alan was closing in on a sale and wanted everyone to know it. He started performing. He was a little guy.
He jumped up on his desk. He started saying things along the lines of, ” And if I can lock you into this price with this profit margin you’ll go for it. Wont you? Because I’ve secured you the very best deal to maximise your portfolio.”
He spoke loudly, condescendingly.
He stood on his desk and pumped his hips. Several times
He was simultaneously speaking to this client and everyone else in the office.
A Boiler Room performance.
 
The irony. I had watched this movie a few months before.
Art imitating life or the other way around. The chicken or the egg.
 
 
The first week at work was spend cramming for some multiple choice test. I can’t remember what the test was about.
I don’t remember it being product related.
I only learned through speaking to some of the senior guys what the product line we were supposed to be selling was.
The guys were vague at best.
Bordeaux wine from French vineyards. Cases of it.
Buy it for US Doctors and Dentists at a low price as an investment. Sell it later at an increased profit.
This seemed to be the only investment in their portfolio that Ocean was dealing with.
 
My first week was revision and that test. No selling over the phone.
The remaining three weeks I was there I only had one role.
To sit at the desk with two sales closers and observe. Senior boys in the company.
One very tall and quiet British guy. One arrogant little South African guy.
Arrogant and aggressive. For no particular reason that I could fathom.
A jumped up little turd called Chris. I disliked him instantly.
 
As well as observing these two superstars, I was to go through a list of doctors and dentists who wanted to close their accounts with Ocean.
This was a big no no. By no means would they cash out. This investment was good for them and their retirements.
Their accounts must remain open and active I was told. We need to increase their portfolio. More wine. More investment.
I was to make appointments for the closers to call them at their convenience.
The closers needed to convince Doc or Dentist to hold on, don’t be rash. Investment profits were coming.
 
In four weeks of working for Ocean International Marketing I made zero sales calls to anyone. I wasn’t allowed to pitch anything.
I hadn’t reached that trust level yet.
I remember making a few calls from that list and hitting the brick wall of secretaries. 
Doctor or Dentist is very busy at the moment, what is this regarding? End of call. No return call from Stateside.
I never spoke to a single Doctor or Dentist or “client”.
 
I’m sure Ocean International Marketing had a bunch of expletives around it for these medical professionals.
Especially if they wanted to close their accounts.
I remember thinking I wouldn’t want to be the patient if the secretary ever informed the dentist.
” Excuse me Dr, but Ocean International is on line two”
Drill noise. Blood spurt. Much pain.
 
With all of my non contact phone calls little turd Chris was getting more and more frustrated with me.
I really didn’t care. 
 
Something seemed amiss with this place. From the perspective of years passed I could see it a lot more clearly.
At the time it seemed more plausible. The veneer passed the test.
A nice office in a good block. Well dressed and presented managers and sales staff.
Weekly wages. Initial accommodation at the hotel paid for by the company. Return flights etc.
Genuine investments? Maybe. They did have clients after all.
 
Marco was the first to get antsy. He’d had enough, maybe homesick too.
Nights out in Amsterdam weren’t cutting it.
He made a return flight inquiry with the airline. The Cape Town lady who’d recruited us all knew about it immediately.
She dropped the dime on him to Ocean. He was grilled about his intentions and commitment. 
He managed to convince them he was just asking about the return flight process.
In case he wanted to fly back for a holiday at the end of the year. They bought it.
They had investments in us as well.
 
Marco ducked south a few days later. His younger brother stayed on.
 
I was thinking of leaving at that time too. Jimmy was going to stick it out.
I think the money was useful for him.
Jimmy was an entertaining, amusing guy. We had a lot of laughs.
He was an international man of mystery.
Jimmy had lived and worked in a few countries.
Jimmy worked the time share racket in Southern Spain and the Spanish islands.
 
It went like this:
Stand around in the sun near the popular beach walkways or main drags of town.
Look for tourist couples and target lock in. 
Present them with a scratch card from the company he represented. “Give it a try, you never know.”
The couples ‘won’ a prize. (Every scratch card was a winner) The common gifts, free dinner at a restaurant. Free drinks at a certain bar.
Free entry to an attraction. Just accompany me to our offices close by and claim your ‘prize’
The couples were hustled into a waiting taxi with Jimmy. Jimmy presented them to the time share staff at the office.
“They’ll take care of you and issue your winning prize”
The couples were presented with a drink and led through to a nice time share presentation.
I asked Jimmy if they often purchased time share property. He told me they often did. 
 
In another year Jimmy went on holiday to the States.
Jimmy liked the US so much he decided to stay. After his maximum time limit expired.
Jimmy worked in a Dallas strip joint. An over stayer and illegal employee.
He travelled around the US and found himself in Miami.
US Immigration caught up with him working at a bar.
He was detained for deportation.
Immigration officers drove him to Miami International Airport.
They escorted him to the airport entrance and promptly left him there. 
He looked around bewildered and watched as Immigration drove off.
Jimmy hopped into a cab straight back into Miami.
 
He got deported properly a few months later.
Jimmy was a character. He always seemed to be on the run.
What was he even doing in South Africa? All I knew was that he had a girlfriend and a BMW.
I got the impression his girlfriend didn’t even know how long he would be in Holland for.
He seemed uneasy about it.
He wasn’t going back to the UK though. He preferred other places.
I think there was a warrant out for him in Leeds.
He called the city of London a toilet.
 
I made my own move. I didn’t use the return flight so generously paid for by the company. I paid for my own flight.
On a Friday I was there, an employee of Ocean. On the Monday I wasn’t.
Brief employment over.
I had lived in Rotterdam for four weeks. If you can call it that.
Jimmy understood and wished me luck. I wonder how long he stuck around.
 
 
The Razorbacks Lost Their Greenbacks
 
In 2016 I was working as a Private Investigator.
I though of Ocean International Marketing one day and my experience there.
The people I had spent time with.
I started digging one day as a matter of interest, A personal side line project.
 
The wheels for Ocean International would start falling off in Arkansas, USA – the Razorback state.
The state Securities regulator filed a cease and desist order on behalf of Arkansas medical professionals – Doctors and Dentists.
Another Company linked to Ocean was mentioned Seed International LTD of the Cayman Islands.
They had both sold unregulated securities in the state. 
In the US every state has its own Securities commission. They decide what constitutes a security or investment. They regulate it.
Everything had to be registered and above board.
 
I saw another one from the state of Kansas;
 
Permanent Cease and Desist Order
DATE: November 6, 2003
RESPONDENTS: Ocean International Marketing, Ltd. and Seed International, Ltd.
ALLEGATIONS: Respondents sold unregistered securities and sold such securities without registration as either broker-dealers or agents. ORDER: Respondents sold, through the use of general solicitation, investments in fine wines, including the selection, purchase, storage and resale of such wines. Respondents sold these investments without registering either the investment opportunity nor themselves with the Office of the Kansas Securities Commissioner.  
 
 
Blood In The Water
 
I found another Cease and Desist Order from the state of Maryland. Then another. And on it went. 
Cease and Desists started cropping up all over the US.
Doctors and dentists from practically every state targeted had approached lawyers who in turn appraised state Securities regulators. The jig was up.
It all added up to one thing: Investment fraud.
On a massive level.
The net of the scam fell far and wide. The net pulled in the Cayman Islands.
Those naughty boys had registered their companies and bank accounts there.
Seed International LTD.
Architects of Wine.
Ocean International Marketing.
Why the Cayman Islands? Because it’s easy to incorporate there.
In a matter of days an offshore company can be incorporated. Without leaving home.
 
The process is usually:
Hire a local law firm – online.
Law firm handles incorporation paperwork and submission. 
Company nominates shareholders. (for paperwork purposes only)
The following day all shareholders resign.
The Company is fully incorporated as an offshore entity to conduct international business. Business bank account included. All legal. Offshore companies are formed all the time. Some exist legitimately because of tax breaks. Some exist as money laundering vehicles. Shell companies.
 
The federal regulators froze their Cayman bank accounts. Shut down their Caribbean base.  They were forced to stop operations worldwide and reveal their assets.
The Dutch investigators shut down their Netherlands boiler room – Ocean International Marketing. 
Apparently a Guernsey court order also froze the company’s bank accounts in Scotland and Guernsey.
Worldlaw.eu had an overview of the main developments.
In June 2006 there was a $100,000 bounty out for the information leading to the whereabouts of some of the boys.
I didn’t recognise their names.
 
 
Domino’s Down
 
 
The boys from the boiler room had a good run.
The investment scam ran from 1997 – 2003.
During that period they defrauded “investors” of $88 million according to the Dutch prosecution office.
3 300 US professionals, mostly medical doctors and dentists, buying into non-existent wine investment portfolios.  
 
Ghosts in the bottle. 
 
The US weren’t messing around. In 2006 US Federal Court RICO charges were proceeding.
RICO – Racketeer Influenced and Corrupt Organizations Act.
The federal act was used against the hierarchy of the US Mafia. High level organised crime groups.
 
South African and Brits selling non existent wine investments. S**t just got real.
 
Like it or not under US RICO legislation they operated a continuing criminal conspiracy across state lines.
Investment fraud over the phone from another country counts. 
Even though they probably never stepped foot inside the US. 
 
What’s probably more accurate is that they ran an international investment fraud conspiracy.
The Netherlands, Cayman Islands, South Africa.
 
In Rotterdam I saw it running live for a 4 week period in June 2001.
I just didn’t know it then. Or the scope of it.
 
No Place Like Home
 
The boiler room Directors fled the Netherlands.
They failed to attend their scheduled court dates.
They went on the lam.
The Dutch authorities knew where they went. They were both South Africans with dual Dutch/South African citizenship.
 
In late 2006 Dutch investigators arrived in Cape Town. 
Director one was tracked to Milnerton where he was involved in some land development deal involving the lagoon.
Director two who I had been introduced to as one of the heads of the Ocean International Marketing in Rotterdam, was believed to be in Somerset West outside Cape Town.
There was talk of extradition to the Netherlands.
 
The Cape newspapers got interested. Director one was approached by the Cape Argus.
He was quoted as saying, ” “I’m just a middle man bearing the brunt (for) the real culprits. I was only the marketing arm of Seed International, Ocean International’s mother company.”
 
It’s a silly statement. All investment calls were made through Ocean International in Rotterdam. They were the sales force. 
 
They were caught in time.
 
In the US, Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 sets the statute of limitations at
“two years after the fraud has been discovered and not more than five years after the fraud has occurred.”  
 
They had until roughly 2008 to try and get away with it.
The scope of the fraud was discovered in 2003. 
 
At the moment I’m reading Shoe Dog, the memoir from Nike founder Phil Knight.
In the 1960’s he found himself working for an investment firm which he later realised was really a boiler room. 
 
Hey it happens.
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