The ‘Wolf of Westcliff’ and his dodgy gems
Mrs R.G. writes: In 2013, I bought an investment diamond from Good To Be Green Limited. It was to be stored in a vault in Geneva. The company later ceased trading and I was contacted by Global Tech Management Limited, which said my diamond was worth £26,000 and I needed to pay £5,600 in VAT. It rang three or four times a day and offered to store my diamond for free if I invested £20,000, which did not feel right. More recently, another firm said it has my stone. Diffraction Diamonds, based in Dubai, seems to have all the relevant information, but how do I know who to trust? THE answer may well be not to trust any of them. Good To Be Green was part of a shady network of companies that sold carbon credits, advising investors that prices were ‘soaring’.
It claimed to have ‘a team of highly qualified diamond experts’, offering ‘superior rare jewels’ as investments. It was all lies. This was just a boiler room scam using false claims and high pressure sales calls to cheat people.
The business was run by Ricky Burgess from Westcliff, a suburb of Southend, Essex, who was 21 when he set it up. Since it ceased trading in 2013, Insolvency Service investigators have found it raked in at least £608,000 by selling carbon credits at a 370 per cent mark-up over their true value.
Three weeks ago, Burgess, now 25, was banned from acting as the director of any company for 15 years.
So much for the would-be Wolf of Westcliff. Next, along came Global Tech Management. Like Good To Be Green, it claimed to be a City investment firm. It was never licensed by the Financial Conduct Authority, but it boasted it was ‘a manager specialising in international equities and commodities’, and even offered hedge funds.
But this was just another boiler room scam. It failed to file any accounts at Companies House – an offence – and was struck off in December. Boss Daniel Racey was just 24 when he set it up in 2014. He had previously run CNI Consultants Limited, another dodgy carbon credits firm. It was also struck off last year for failing to file accounts.
How did Racey’s diamond dealing business know to call you about your stone? The answer lies in our picture. The two dodgy dealers are pals, and like Burgess, Racey is from Westcliff.
But could Racey have the brains to be an investment expert? Unlikely. In 2009, he was sentenced to an 18-month community order, including 150 hours of unpaid work, after pleading guilty to criminal damage and assaulting his mother after he came home drunk. In 2011 he went one better, with a 12-month jail sentence after he and a friend broke into what they thought was a drugs den. They got the address wrong but carried on with the burglary anyway, and were arrested trying to escape with items worth about £1,000. Racey’s excuse to the court was that he had been ‘drinking to excess and taking drugs’. So, not a criminal mastermind then.
Neither Racey nor Burgess replied to invitations to comment. But this brings us to Diffraction Diamonds, which told you your stone was not in Geneva but Dubai. It told me it was a wholesaler of fancy coloured diamonds and Good To Be Green was one of its outlets. It arranged storage in Geneva, which is how it was later able to move your diamond to Dubai.
Diffraction told me: ‘Evidence of the diamond being in the vault (documentary and photographic) can be provided at any time.’ So, your diamond exists, and it is in safe keeping. But it is not all good news. After enquiries by the Insolvency Service, Business Secretary Sajid Javid filed a High Court petition to have Diffraction wound up. The case was to be heard on March 9, but has been adjourned as the firm plans to oppose the petition.
Diffraction was set up by David Ramsey, who also previously ran a carbon credits rip-off. The High Court shut it down in 2014 for making ‘false claims and misleading statements’ and charging ‘exaggerated prices’.
Though your diamond exists, it may be worth a fraction of what you paid. A week ago the Insolvency Service revealed details of evidence it gave recently in court, to close down diamond dealer Heritage FA Limited. Investigator Chris Mayhew said: ‘This company promised safe and spectacular returns, but simply delivered a hole in the pocket for investors.’ The mark-up by Heritage was 334 per cent, making it almost impossible for investors to profit. Also, Heritage got the stones from Diffraction. Oh, dear.