A gang of crooked gems dealers from Eastbourne made £1 million by duping investors into buying diamonds at hugely inflated prices, the Old Bailey heard today (Wednesday).
The boiler room fraudsters cold-called scores of unwitting victims and promised them sky-high returns, it is alleged.
One retired customer used up the last of his savings buying gems for £140,000 - but the precious stones were worth little more than £10,000, jurors were told.
Alleged mastermind Adam Simmons, 27, is on trial alongside his father Michael, 53, and brother-in-law Adam Leach, 29.
They are said to have run the year-long scam under the guise of No1 Gems Ltd, based in Hove, West Sussex.
By the time the firm was raided by police in September last year, they had closed down their operation and were preparing to start a similar firm called Pinnacle, based in Eastbourne.
Prosecutor David Durose said, “Basically, No1 Gems were engaged in what is known as a boiler room fraud. It is a specific type of fraud in which individuals are targeted with cold calling and pressured into making purchases of items such as shares, equities or financial instruments - or in this case, diamonds.
“The purchasers were sold the items for prices vastly above what the items were worth. In this case they purchased small coloured diamonds at a markup as high as 900 per cent or more.”
Glossy brochures were sent out boasting employees at No1 Gems had more than 100 years’ experience in the jewel business.
They also lied about the closure of diamond mines and a potential £15m deal to sell jewels to HSBC to get customers to part with their cash, the court was told.
But Mr Durose said, “Those representations were blatant lies.”
Instead, the diamonds were sourced by the defendants from the Langermans Diamonds catalogue.
Adam Simmons, who has no fixed address in the UK but has homes in Malaga and Marbella; Michael Simmons, of Lion Hill, Stone Cross, Pevensey, and Leach, of Hambleton Close, all deny conspiracy to defraud and fraudulent trading.
The trial continues.