Former diamond industry star Vashi Dominguez has disappeared without a trace. His legacy is an astonishing £170 million in unpaid debts and thousands of investors ripped off for hundreds of millions of pounds. Dominguez is known for his dazzling charm and charisma. In 2021, he opened a lavish retail outlet in Covent Garden, finding fame and fortune along the way as jeweller to the rich. In 2023, the cost of insurmountable debts toppled his empire.
Over just two years, Dominguez lured in tens of millions of pounds from private investors. He did it with just the right blend of razzle-dazzle, glitter, and polished backroom deals. Yet his flagship store glimmered with opulent aesthetics. A massive touchscreen and an £8000 designer sofa helped to up the wow factor considerably. He was a master at painting the picture of success. According to reports, he even had his employees pose as customers to create the appearance of a thriving establishment.
Behind this facade lay troubling practices. Dominguez’s firm, Vashi, was aggressively purchasing smaller or lesser-quality diamonds than what investors had originally purchased. They purposefully took the GIA certification numbers off these diamonds. This subterfuge ultimately sank the company’s ship and created skepticism about the honesty of its financial disclosures.
Dominguez’s disappearance came just as a court order to close down his company started to take effect. He allegedly took off to Dubai the same day the court announced its decision. His actions have raised alarm from across the aisle, environmental groups, concerned constituents, and other stakeholders. One of them is experienced investors Clive Schlee and John Caudwell, who both came under Dominguez’s spellbinding charm.
According to former store manager Will Hayward, what emerged was a dog and pony show unlike any other designed by Dominguez to woo clients and investors.
“It was a whole elaborate show that Vashi would do with the clients, to show that they’ve got so many orders and this is how busy we are – this is why you should really be investing into Vashi,” – Will Hayward.
As things progressed, liquidator Benji Dymant surprised everyone with an emotional announcement. He shared that investors were the first in line to receive over £100 million in debt.
“Obviously it’s not good. The shareholders, the investors have lost their money. I certainly am very sorry that’s happened, but nothing to do with us,” – Rajnikant Patel, an accountant who signed off on Vashi’s accounts, stated that he was unaware of any discrepancies.
Dymant noted there is indeed no proof of hundreds of millions of dollars going to black market, offshore accounts. This may mean that despite egregious instances of financial mismanagement, there does not appear to have been fraud in many instances.
“What we haven’t seen from the bank statements is significant bulk sums of money, or any obvious sums of the money, that have been put into an offshore account or anything like that,” – Mr Dymant.
What really vaulted Dominguez to this unique position was his charm offensive. Mark Schneider was inspired by the array of other smart money investors joining in the deal. It was their collective intelligence that first attracted him.
“It seemed good. Some smart guys from around here were in the deal, I just kind of went along with it on that basis,” – Mark Schneider.
As details of Vashi’s operations came to light, skepticism grew about the legitimacy of Dominguez’s claims. T4 outrage-o-meter Stuart McFadden was aghast at the level of misrepresentation.
“To completely misrepresent the accounts by this scale is just completely unacceptable,” – Stuart McFadden.
The ramifications of this case reach far beyond Vashi’s financial devastation. In fact, some industry observers say it’s the biggest fraud since the infamous Enron scandal.
“This is bigger than Hatton Garden, Brink’s-Mat and the Great Train Robbery combined,” – Michael Moszynski commented.
The downfall of Dominguez’s empire has left investors high and dry. It has led to a huge public outcry about the need for oversight within the diamond industry. Questions remain surrounding how such a massive fraud was able to take place without appropriate oversight and guardrails.
Chalk one up for irony – National Center’s Mark Schneider, who recently lamented the regulatory responses. He asked why no one has been punished for allowing scams right under our noses.
“All 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,” – Mark Schneider remarked.
The diamond industry has an uphill battle to restore trust from consumers and investors alike. At the same time, it has to focus on the fallout of this scandal. As creditors await resolution, many are left wondering what will become of Vashi’s legacy and whether those responsible will ever be held accountable.