A man suspected of making £1.5million through a diamond investment scam has been arrested in Chingford. 

The 24-year-old was arrested by detectives from the City of London Police’s Fraud Squad on suspicion of conspiracy to defraud and money laundering following an early morning raid yesterday (April 8). 

He is suspected of carrying out a 'boiler room' investment fraud which involves high pressure, cold call sales techniques to induce people to buy worthless or bogus stocks and shares. 

In this case, up to 60 people are believed to have fallen victim to the £1.5million scam fronted by two companies parading as diamond investment brokers.

Investors were led to believe the precious stones they bought would be stored in Geneva-based vaults before being sold for a considerable profit at reputable auction houses.

But the investigation team has so far found no evidence that either the diamonds or Swiss storage companies ever existed. 

Between October 2013 and September 2014, investment fraud resulted in the industry making a loss of £1.73billion.  

The suspected fraudster is believed to have been working as what is known as a 'closer' who followed up introduction calls made by cold-callers and finalising deals. 

Detective Constable Ceri Hunt, leading the investigation for the City of London Police, said: "Investment fraud is a crime that specifically targets an older generation who have worked hard all their lives and are now trying to find a way to secure a decent return on their savings.

"Every month hundreds of people are being conned into putting their money into investment schemes which on the surface appear to be guaranteeing them a happy retirement but in reality are being run by ruthless fraudsters who are only offering a one-way ticket to a place full of broken promises, lies and heartache.

"It is vitally important that if you are ever contacted by a cold-caller trying to sell you something that you simply hang up the phone as quickly as possible and if you do fall victim to a scam that you report it to Action Fraud on 0300 123 400."