There is puzzlement among investors over the failure of UK police and the Serious Fraud Office to investigate the collapse of a London firm that owed £170 million.
An investigation by The National has revealed the company’s founder Vashi Dominguez claimed he had a £200 million diamond hoard which he used to lure investors to his diamond company.
The 46-year-old Canary Islands-born businessman, who was the in-house diamond expert on This Morning, a popular TV show in the UK, set out to create one of the world’s biggest luxury brands, but his company folded in 2023.
Investors, many of whom are from the Middle East, believed the diamond stock would have been used to reimburse them if the company failed, but when the safes were examined it turned out to be worth just £114,000.
Speaking to the BBC’s Panorama programme, they are now repeating their demands for the police and the Serious Fraud Office to examine whether Mr Dominguez’s behaviour amounted to fraud.
Michael Moszynski, who said he lost “tens of thousands”, said he was reassured that high-profile figures had invested in the company. Clive Schlee, the former chief executive of Pret a Manger, and John Caldwell, the billionaire mobile phone entrepreneur, are said to have invested millions in Vashi.
Mr Moszynski added that, based on audit accounts, Vashi appeared to be a healthy firm. He said he was “dumbfounded as most other people when it was announced that the company had gone into administration”, but is now demanding a criminal investigation into Vashi’s collapse.
“Why I’m so angry that no crime agency in this country is doing anything is two-fold,” he told the BBC. “One is that it’s letting him get away with it and secondly why would any other investor want to invest in a British company if something as basic as that isn’t dealt with.”
Another investor, Mark Schneider, said has lost around £750,000 and is also backing calls for Mr Dominguez to be investigated by the UK authorities.
“I don’t really understand, what is it that you’re actually doing?,” he said. “It’s a pretty big thing that all of these people in your country can be ripped off in such an obvious way and you don’t bother trying to figure out how to get hold of the person or to deal with the fraud.”
Stuart McFadden of Refundee, a company representing Vashi investors, said the way money put into the company by high net worth individuals was used to pay other investors had the characteristics of a Ponzi scheme.
“Investors money being used to pay back previous loans from other investors, that’s part of how it works, you get more people investing and that's how you keep it all going,” he said. “It seems to be high net worth investors, which is also why I think it was a sophisticated, if not the most sophisticated, Ponzi-type case we’ve ever seen.”
Mr McFadden said that Mr Dominguez telling investors that there was a stock of diamonds worth millions was “pretty dishonest” and meant “he exposed them to an inevitable loss”. He is also calling for an investigation but added that “unfortunately we see time and again that law enforcement don’t have the resources”.
Mr Dominguez's plan was to shake up the jewellery business by attracting younger customers with in-house workshops visible from the street of a central London store that would tailor-make jewellery to embrace “the fundamental emotions of the wearer”. The company experienced dramatic sales increases of 365 per cent in May 2021 and had ambitious plans to expand to fit out stores in New York.
But John Ames, the chief technology officer of Vashi, has told The National he had reason to believe that the company was raising investment on the basis of sales figures he felt did not match reality. Mr Ames was given an internal sales report, which showed the figures were around £5.4 million for 2020 and £5.09 million for 2021.
That contrasts with the last available public accounts filed with Companies House, which show that the company’s stated sales for the year ending 2020 were £53.63 million and £105.42 million in 2021.
Creditors, including diamond suppliers, gradually lost patience, and court records show they were petitioning to have the company wound up from May 2022. A former employee revealed on the Glassdoor employment website, which reviews companies, that staff were made to pretend to be customers in November 2022.
According to Panorama, investors say when they went to the Serious Fraud Office they were told to go the Metropolitan Police, who in turn told them to go to the Serious Fraud Office. The Met Police said it has not received referrals from the liquidator but would “reassess” if they did.
The liquidator said he is not allowed to say whether the case has been referred to the police or the SFO. The SFO said it only takes on a small number of high-level economic cases each year. HM Revenue and Customs said it cannot comment on identifiable taxpayers or businesses.
