Diamond investment coldcalling scammers flogged gems at a 745% mark-up
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A diamond investment firm used two desperate arguments to try to avoid being shut down by the High Court.
First, it claimed it had never ripped off anyone, blaming so-called brokers working for other companies.
And in case that didn’t wash, it argued that the UK courts had no authority because it was based in Dubai.
In fact, the Dubai operation, Diffraction Diamonds DMCC, was another version of UK company Diffraction Limited, which was liquidated in 2014.
Both were run by 40-year-old David Ramsey of Slough, Berkshire.
The High Court was told how Diffraction supplied diamonds to other companies, which cold called members of the public claiming that they were a great investment as they were priced 20% below the retail value.
But the Government’s Insolvency Service proved that the fancy coloured diamonds – or FCDs – were being sold at mark-ups of between 220% and 745%.
Deputy Judge Philip Marshall QC ruled: “There can be no doubt of the fact that Diffraction played a central and essential role in the sale of FCDs by brokers to the public as investments, and profited from such arrangements.”
Ramsey even admitted knowing that the diamonds were being sold at hugely inflated prices, prompting the judge to say: “Mr Ramsey must therefore have known perfectly well that investors would almost inevitably suffer loss through the transactions that Diffraction was facilitating.”
He added that it was “inexcusable” that the company failed to disclose its accounts.
The judge ordered the company to be wound up in the public interest, along with a second operation, IGL Labs UK Limited, run by 40-year-old Noam Lenzini of London.
This provided worthless valuation certificates designed to give investors the impression that they’d got a good deal.
The court heard that IGL never even saw the diamonds it valued – it simply took whatever price they’d been sold for then added 20%.
Two companies that coldcalled potential investors have already been put into compulsory liquidation – Heritage FA Limited and CDX Worldwide Limited.
When the latter was shut down last year the High Court heard how Diffraction paid the original supplier around £1.3million for diamonds that were sold by the broker companies for £5.6million.
Mr Chief Registrar Baister said the mark-up “obliterated” any chance of investors making a profit.
PS Ramsey was last month banned from being a director for 14 years over a separate scam, this time selling worthless supposed green investments, called carbon credits, for £1.4million.