It was a pitch designed to dazzle: turn a small investment in pink diamonds into big bucks by getting ahead of a major buyer trying to corner the market.
But prosecutors say it was little more than a boiler room scheme that convinced investors to keep sending money to buy stones that may never have existed in the first place.
Four Canadian diamond dealers have been charged with allegedly running a strong-arm, cold-call scam that cheated dozens of U.S. investors out of tens of thousands of dollars each with promises of big returns on precious stones.
According to court documents filed in federal court in Ohio late last week, James Gagliardini, 44, Michael Shumak, 52, Anthony Palazzolo, 64, and Jack Kronis, 63, ran Paragon International Wealth Management from 2013 until 2018 out of offices in Toronto, Canada. The firm billed itself as expert in buying and investing in so-called “colored diamonds.”
All four men have been charged with one count of wire fraud.
Messages left for attorneys representing Gagliardini, Shumak and Palazzolo weren’t immediately returned. It wasn’t immediately clear if Kronis had yet retained an attorney and he couldn’t immediately be reached.
Prosecutors say the firm started by acquiring telemarketing lists of potential customers in the U.S. and Canada and the four men, often using aliases, would cold-call them and aggressively pitch their diamond investment scheme.
At first, the offer was modest…
