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Department of Law Two World Trade Center New York. NY 10047
UepartmenI of Law The State Capitol Albany, NY 12224
For Further Information Contact Timothy Gilles 212/488-3334--518/474-7330
FOR RELEASE:
ABRA/IS TO HOLD H E A R I N G S
Attorney
General
SUNDAY, J A N U A R Y 24, 1982 A F T E R 12:00 N O O N
ON ILLEGAL B O I L E R R O O H
Robert Abrams announced
today
w i l l hold public h e a r i n g s
in N e w York City on M a r c h
described
fastest
growing
General Abrams
stated:
as "the state's
SCHEMES
(Sunday)
4 and
investment
that he
5 on w h a t he
fraud,"
the o p e r a t i o n
of illegal b o i l e r rooms. Attorney
"During the p a s t illegal o p e r a t i o n s that the simply,
six months,
and a r r e s t e d
laws r e g a r d i n g
these
my office has c l o s e d
some 50 individuals.
However,
frauds are in urgent need
for con a r t i s t s of this kind,
down 6 of these
of
the risk of b e i n g
it is clear
reform.
caught
Quite.
is minimal
and the risk of going to jail even m o r e remote." Attributing inflation
the t r e m e n d o u s
and the v o l a t i l e
the t y p i c a l b o i l e r
over the t e l e p h o n e
precious
and s t r a t e g i c metals,
commodity being offered Each year,
of dollars
is g r o s s l y m i s r e p r e s e n t e d ,
in p r o s e c u t i n g
salespersons
invariably
representations which o t h e r hand, personnel,
investors
to u n s c r u p u l o u s boiler
Mr. A b r a m s m a i n t a i n e d obstacles
their e m p l o y e r s
Typically,
the
frequently
the
country
law t h e r e
For example,
lose
that
room c l a i m that
made u n a u t h o r i z e d
are major
b o i l e r room the
told them to m a k e w e r e
of the b o i l e r
in
room o p e r a t o r s .
c l a i m that they were u n a w a r e
to them,
investments
and
across
that under c u r r e n t
these offenders.
the p r o m o t e r s unbeknownst
to a t t r a c t
e x p l a i n e d that
uses high
oil and other c o m m o d i t i e s .
unsuspecting
fraud to
Mr. A b r a m s
room is a f l y - b y - n i g h t o p e r a t i o n w h i c h
sales t a c t i c s
millions
in i n v e s t m e n t
state of the economy,
pressure
worthless.
upsurge
their
false.
On the
sales
representations
to
customers. In addition, statute
Mr. A b r a m s
said that the p e n a l t i e s
are not stiff e n o u g h to p r o v i d e
in the current
a meaningful-deterrent.
(over) '
-2To
package
address
these problems,
the A t t o r n e y G e n e r a l
of bills w h i c h w i l l be p r e s e n t e d
including proposals --Make
p e r s o n calling exchange.
for p u b l i c c o m m e n t
a
at the h e a r i n g ,
to:
it illegal
u n s o l i c i t e d calls
has p r e p a r e d
in the
to use m o r e
than two t e l e p h o n e s
sale of s e c u r i t i e s or c o m m o d i t i e s
is a s s o c i a t e d w i t h a r e c o g n i z e d trade
Violating
this
to m a k e unless
association
law w o u l d be a felony p u n i s h a b l e
the or
by a m a x i m u m of
seven years in prison. --Make fraud
r e p e a t e d or i n t e n t i o n a l v i o l a t i o n
law a felony.
state
investment
It is now a m i s d e m e a n o r .
--Increase
the p e n a l t [
m a x i m u m of four years
for o p e r a t i n g
a scheme
to d e f r a u d
from a
in prison to seven y e a r s .
- - A l l o w the p r o s e c u t i o n of d e f e n d a n t s were
of the
e n g a g e d in a common
scheme,
even
in j o i n t
if they were
not
trials when
indicted
they
for the
same offense. The h e a r i n g s w i l l be held at Two W o r l d T r a d e C e n t e r convene
at 10 a.m.
on b o t h M a r c h 4 and 5.
Among the
are former v i c t i m s of b o i l e r r o o m o p e r a t i o n s schemes, their
federal
scheduled witnesses
and p a r t i c i p a n t s
i n c l u d i n g u n d e r c o v e r o p e r a t i v e s who w i l l be d i s g u i s e d
identities.
Officials
regulators
of stock and c o m m o d i t y e x c h a n g e s
and p r o s e c u t o r s
Attorney
G e n e r a l Abrams
invites
for an appearance.
from the A t t o r n e y G e n e r a l ' s ~ u u r e a u W o r l d T r a d e Center,
in the to protect and state and
are also e x p e c t e d to testify. i n t e r e s t e d p a r t i e s who w i s h to
c o m m e n t on the p r o b l e m and on his l e g i s l a t i v e p r o p o s a l s o f f i c e to a r r a n g e
and w i l l
to c o n t a c t his
F u r t h e r i n f o r m a t i o n may be obtained
of I n v e s t o r P r o t e c t i o n
New York, New Y o r k
-30-
10047,
(212)
a~d Securi%z,~Two
488-7563.