Diamond Scammers Tricked Investors Out Of £3.5m

Directors of three companies that scammed investors out of more than £3.5 million with bogus claims about the value of diamonds they were selling have been banned from running companies for more than 40 years between them.

The trio all agreed to give an undertaking not to take on the role of a company director after the Insolvency Service wound up the companies.

Charles Sewell, 25, director of Cohen Stones Ltd, Edward Philips, 61, director of Imperial Assets Solutions Ltd and Liam O’Keeffe, 24, director of Tudor Global Ltd were banned as directors for 14 years, 14 years and 13 years respectively.

The Insolvency Service investigated investment claims made by the companies and discovered that they were selling investors diamonds at up to 20 times the value they paid for them and made false claims that they would increase in value up to 20% a year.

1,000% mark ups

Ken Beasley of the Insolvency Service’s public interest unit, said: “These companies preyed on old and vulnerable customers and deliberately misled them about the price of their investment and the likely increase in value over future years.

“This led to many of the investors making significant losses that they could ill afford.

“I would urge all potential investors to take note of this case, because the victims lost their cash as a result of responding to unsolicited sales calls from sale people promising unrealistic returns.”

How the scam worked

Each company worked in the same way –

  • The companies bought diamonds from suppliers and marked them up by between 510% and 1,007% before selling them on to customers
  • They promised customers the diamonds were worth the price they were paying as investors, knowing that this was not true
  • Both companies told customers that the diamonds would show a return on investment of between 4% and80% a year without any evidence to show this was correct
  • A sample of the diamonds valued by the Insolvency Service shows they were worth between 4% and 13% of the price paid by investors
  • Following the purchase, the diamonds were held in a freeport for customers so not VAT was incurred. As customers would have to pay 20% VAT on the buying price to recover their diamonds, the Insolvency Agency argued collection was not economically viable

O’Keefe also tried to divert money held by Tudor Global Ltd to avoid detection when the Insolvency Service investigation started.

Leave a comment