Newport Beach : 3 Salesmen Held in ‘Boiler Room’ Operation

Three telephone salesmen have been arrested in connection with a clandestine “boiler room” operation that allegedly swindled at least $250,000 from 20 customers who thought they were investing in silver and platinum futures, authorities said Friday.

U.S. Postal Service inspectors and Newport Beach police arrested the suspects, all of whom had worked for Eastern Financial Services, an unregistered precious metals telemarketing business that operated out of several locations in Newport Beach from late 1987 through January, 1989, according to Newport Beach Police Lt. Tim Newman.

The owner of the firm, Eric M. Dickey, was arrested last January on three counts of wire fraud. Dickey was convicted and sentenced to four years in federal prison while the investigation continued.

Newman said investigators arrested Michael J. Mears, 27, outside his La Jolla home early Thursday morning, then took James D. Murdoch, 26, of Newport Beach into custody Thursday afternoon at his place of work, also in Newport Beach. Robert L. Daigle, 27, of Garden Grove, was arrested Friday morning when he arrived at his job to get his paycheck, Newman said.

All three were being held in the city jail in lieu of $10,000 bond on suspicion of telemarketing fraud.

Newman said they used “classic high-pressure telephone sales” to cheat at least 20 clients out of the $250,000. They face charges of grand theft, conspiracy and telemarketing fraud and federal charges of mail fraud and wire fraud, he said.

Other suspects are being sought in the continuing investigation of Eastern Financial Services, Newman said.