Diamond scams seems to go on forever as yet another fraudster firm is closed by consumer watchdogs.
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This time, the company ordered shut by the High Court is the Coloured Diamond Exchange or CDX Worldwide Ltd.
The company sold coloured diamonds at mark-ups of up to 550% of their real value.
The diamond broker traded by cold-calling investors and misselling them cheap diamonds at inflated prices.
The scam raised more than £1.2 million, according to the government’s Insolvency Service, who asked the High Court to close the company in the public interest.
The company sales pitch was to tell investors that they could buy quality diamonds at prices largely unavailable to private investors.
Part of the claim was true due to the high mark-up.
False trading claims by sales force
The sales team also claimed coloured diamond prices had increased by between 15% and 25% year-on-year.
Insolvency Agency investigators told the court that the company had a sales force in Dubai and operated a virtual office from a prestigious address in the City of London.
Sales staff falsely claimed the company had traded for 10 years, was regulated by the Financial Conduct Authority to give investment advice and was part of London’s Royal Exchange.
CDX had a single company director and shareholder, James Gilkes, who told investigators marketing was outsourced to a company in Dubai, but he declined to give any further information.
Chris Mayhew, who led the Insolvency Agency inquiry, said: “This company was yet another scam firm making false and misleading statements to persuade people to hand over cash for virtually worthless investments.
“Companies like this are unscrupulous, dishonest and aggressively target vulnerable investor.”
Director disqualified for 14 years
Meanwhile in a separate case, Charles Amning, director of Windward Capital Ltd, was disqualified as a director for 14 years following the High Court winding up the company.
Windward Capital sold worthless rare earth metals worth more than £500,000 by cold calling investors.
“He should have known that the investments the company was selling were unsuitable particularly as there is no market for selling rare earth metals in such small quantities and with industry certification.”
Under the order, Amning cannot take part in any role that gives him management or control of a company in the UK.
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