A former Livingstone Asset Management employee tells Tony Levene how she came to work for the boiler-room operation and the tactics employed to dupe unsuspecting investors into parting with their cash.
Finding well-paid work in Budapest is tough for Ms Borbola Kalman (24). "I've got good English plus people skills. But I don't have the formal qualifications Hungarian employers demand."
But Borbola (not her real name as she fears violent retribution from former bosses), her compatriots and non-Hungarians living in Budapest found they needed few qualifications for a job with Livingstone Asset Management, a boiler-room operation, which ripped off around $2 million (€1.8 million) a month from gullible investors by selling virtually worthless shares.
None had an investment background and many quit when they realised what they were doing. Others never reappeared following police raids.
Borbola says: "When I went back to Budapest in February, after a spell in England, I was desperate for cash. A Croatian friend had been working illegally for Livingstone Asset Management. I had a drink with her co-workers and they said I could earn 60,000 Hungarian forints (€230) a month in cash - that's good money in Budapest. They said Livingstone was always desperate for staff."
Borbola met Judit (24), a Livingstone recruiter at the firm's office, Vaci Ut, 18, in a smart area of town.
"It was on the second floor - all the other floors had notices to say who was there. Our floor did not," Borbola says.
Others were recruited through English-language adverts in Pesti Est, a Budapest magazine, offering "a great opportunity".
Borbola was "trained" for a week, largely by watching a more experienced colleague.
"I started on the day shift. My job title was 'junior account executive' but I had to change my name to something Anglo-Saxon. I became Belinda. I had to phone people up from a list we created from phone books, company registers and anything else.
"I had the script about how investing in Safeguard Technology would transform their finances. I had to claim I was in Geneva - we were given details of our pretend office. But no one asked - we would have put the phone down if anyone became pushy."
She had to ask potential victims what they did. "If they said lawyer, accountant, journalist, banker or real estate agent we would terminate the call at once. Dentists, doctors, engineers and farmers were the best bets. My job was to work out how much we could take victims for. I classed them A, B or C depending on wealth."
There were 100 Livingstone workers split in two shifts over two buildings in Budapest. Some quit after a few hours but those who stayed soon realised it was a real-life equivalent of Boiler Room, the film starring Ben Affleck and Vin Diesel about a high-pressure sales outfit pushing phoney shares.
"We all used to watch the film - on pirated videos of course - over and over to pick up tips. It was good but not nearly as tacky as our place," Borbola says.
"In early March we were raided by the police and immigration. Half the staff were Hungarian, half were foreign students, but UK citizens were banned as we mainly targeted the UK. The raid was scary - all the non-Hungarians were put into a room and the police were told they were being given a seminar on investing in Hungary. No one believed this but a wad of $10 bills worked wonders and we were left alone."
Borbola/Belinda, who was forced to sign a confidentiality agreement with Livingstone, earned 1 per cent of share purchases from her "qualified" leads. But the senior brokers, often American, took 10 per cent. And most of the rest was shared out by the top staff, including Judit.
After the raid, Livingstone turned into Godwynn International - now in "Berlin" - and has since become Cambridge Global.
"The name change happened over a weekend. It was described as a merger but nothing altered. We continued selling Safeguard. We kept on saying how it was a great opportunity, and how it would transform their family's future. It was scripted. You said you had worked on Wall Street for years."
Borbola was taught how to deal with "objections". She says: "If they didn't put the phone down, and it's amazing how few did, you'd get a senior person to talk to them."
If a potential victim claimed to have no money, the script said: "Only children have no money. You mean you don't have money to lose. Safeguard is risk-free."
To those who claimed to already have a broker, the script said: "Do you always consult your broker on every decision? Your broker firm would advise you against Safeguard as there is no money in it for them."
Dealing with those who said they only invest in property involved telling them that whatever they made, Safeguard would be better.
Countering those who objected to the share pusher's offshore status was easy. The script said: "It's not overseas. It's in the US, which is well regulated."
Borbola would also try to get losers to put up more cash - known as loading. "I had one big client. He invested $20,000 and was worried. We persuaded him to put in a further $70,000 to make $90,000 so I ended up with $900 - a fortune."
Borbola says: "We never gave real names or a phone number. We just took their money. After two months, I had enough.
"I admit I did not have much sympathy for the losers. They were rich and greedy, while I needed whatever I could earn." - (Guardian Service)
