Fraud investigators are warning investors not to fall for promises of untold riches made by tricksters who call them out of the blue.
The government’s Insolvency Service is concerned that so many investors hand their savings to crooks offering alternative investments with unrealistic returns.
In the latest, Gary Arnold, 31, of Waltham Forest, East London, was disqualified as a director for 12 years at the High Court, London.
He ran Solitaire Alternatives Ltd, a company that cold-called potential investors offering to sell them coloured diamonds as an investment.
Customers handed Arnold £750,000 for the so-called gems, but none received any of the stones.
The company has been wound up in the public interest.
High rates of return
“Over the years the Official Receiver has had to deal with many cases where members of the public are cold called by companies offering alternative investment opportunities and claiming unrealistically high rates of return,” said Tony Hannon, Official Receiver with the Insolvency Service’s Public Interest Unit
“Many such schemes have been run principally for the benefit of those running the company, always at the expense of the investors, who have paid substantial sums for things of very little value.
“In extreme cases such as Solitaire, the company has been so reckless that it has just taken the investors’ money for nothing at all in return.
“The public should exercise extreme caution if they are called out of the blue about such schemes. Always remember that, if an investment opportunity appears too good to be true, it probably is.”
Alternative investment scams
Investigators are also concerned that recovery services claiming they can recoup cash lost in coloured diamond scams are also cons.
They explained that these groups are often extensions of the gangs running coloured diamond frauds.
Some coloured diamonds are worth huge sums, but the diamonds sold by tricksters are often poor quality and sold at such a mark-up the investors stand no chance of recouping any cash.
Hannon advises anyone contacted out of the blue about alternative investments to ignore the seller as the offer is likely to be a scam.
Alternative investments include wine, carbon credits, rare metals, overseas land and resorts and other green projects.