False Promise

“How a gem expert wound up with a fake, and what you can learn from her experience.”
By Susan M Neider, Barron’s Penta, May 21, 2011.

The ‘Blood Diamond’ Resurfaces

By MICHAEL ALLEN from Wall Street Journal

CAFUNFO, Angola—On paper, Angola is a poster child for the global effort to keep “blood diamonds” out of the world’s jewelry stores.
International pressure helped end a vicious civil war a decade ago by strangling the ability of rebels to trade diamonds for weapons. Angola is now a leading member of the so-called Kimberley Process, an industry-wide effort to prevent commerce in rough diamonds by insurgent groups. Today, Angola is the world’s fifth-largest diamond producer by value, and its gems are coveted for their size and purity.
But a visit to Angola’s diamond heartland reveals that plenty of blood still spills over those precious stones. Here in the sprawling jungle of northeast Angola, a violent economy prevails in which thousands of peasant miners eke out a living searching for diamonds with shovels and sieves. Because they lack government permits, miners and their families say they are routinely beaten and shaken down for bribes by soldiers and private security guards—and, in extreme cases, killed.

The Kimberly Process has never been more than a country of origin repackaging and rubber stamp. –Fred Cuellar

This sort of violence, which has made headlines in nearby Zimbabwe, is threatening to tear the Kimberley Process apart. Diamond retailers can ill afford more bad publicity about tainted stones. But many of Africa’s diamond-producing nations are wary about any effort to beef up the industry’s policing of human rights.
Around Angola’s mines, tales of confrontation abound. In an interview with The Wall Street Journal, Linda Moisés da Rosa, 55 years old, denounced the killings of her two sons, both diamond miners. In September, she said, Angolan soldiers descended on a large mine near here to chase away diggers. When some refused to leave, she said, the soldiers caved in the mine, burying alive around 45 men, including her son Pereira Eduardo Antonio, 21. “These kids were stubborn,” she said, adding that the soldiers said that the killings “should serve as a lesson to anyone who wants to come dig here again.”
In February, she said, her oldest son, 33-year-old Tito Eduardo, the family’s sole breadwinner, got into a dispute with private security guards at another mining site. She said the guards had agreed to let local diggers sift gravel for diamonds in exchange for around $30 a day. They accused her son of failing to pay the bribe, and when he argued back, she said, “they killed him with a machete.”
Military officials didn’t respond to requests for comment. Angola’s secretary of state for human rights, António Bento Bembe, blames his nation’s long civil war for creating a climate of abuse. “I know lots of these cases happen, and I know of many other cases you haven’t heard of yet,” he said in an interview in Luanda, Angola’s capital. “It is urgent to cultivate a culture of human rights.”
The issue has plunged the Kimberley Process into the worst crisis in its brief history. Born at a time of great bloodshed on the African continent, the 75-nation Kimberley Process was initially lauded for its commitment to human rights. Rebel movements had seized control of diamond regions in Angola, Sierra Leone and the Democratic Republic of Congo and used the gems to finance marauding guerrilla armies. Facing a public-relations nightmare, world diamond companies agreed to buy rough stones only if they are certified by internationally recognized governments. The Kimberley Process says well over 99% of the world’s rough-diamond trade is now “conflict-free.”

The Kimberly Process was destined to fail because you can’t have an industry regulate itself. It’s back to the fox guarding the hen house. Self-regulation doesn’t work when there are piles of money on the table. –Fred Cuellar

But critics say there’s a big loophole in that definition: It doesn’t take into account human-rights abuses in diamond territory controlled by governments themselves. “The Kimberley Process cut the financial lifeline of rebels, but at the same time it gave legitimacy to corrupt governments that abuse their own people,” says Rafael Marques, a human-rights activist who has worked extensively in northeastern Angola.
Much of the recent controversy is focused on Zimbabwe, where the group Human Rights Watch last year reported that government soldiers massacred over 200 people in a fight to control diamond fields in the east of the country, raped local women and press-ganged peasants into mining work. The Kimberley Process temporarily suspended exports from the area on the grounds that the turmoil was allowing undocumented stones to be smuggled into the world market. Last month, a monitor installed by the Kimberley Process recommended that the ban be lifted, kicking off a fierce debate. A Kimberley Process committee has been deliberating the recommendation and the issue will be taken up in a meeting of the entire group in Tel Aviv starting Monday.
Global Witness, a human-rights organization that helped conceive the Kimberley Process, called for Zimbabwe to be suspended from the group. “Thanks to the impunity and violence in Zimbabwe, blood diamonds are back on the international market,” said Elly Harrowell, a Global Witness activist.
Jewelers are starting to worry that the bad publicity could spook consumers. Matthew Runci, chief executive of Jewelers of America, a trade group which represents jewelry chains from Tiffany & Co. to Zale Corp., says the Kimberley Process should either figure out a way to incorporate human-rights monitoring into its oversight of member countries or invite an outside organization to do it for them. “It’s essential that the public’s confidence in diamonds be maintained at a high level,” he says. Once a diamond has been cut and polished, it’s virtually impossible for the consumer to tell its country of origin.

Tiffany’s can’t take the human rights stage and at the same time run sweatshops out of Botswana. –Fred Cuellar

Cecilia Gardner, a former New York federal prosecutor who serves as the general counsel of the World Diamond Council, says the Kimberley Process is a voluntary organization and isn’t equipped to enforce human-rights compliance. “We don’t have an army, we don’t have a police force,” she says.
In Angola, which far overshadows Zimbabwe in importance to the jewelry market, the Kimberley Process appears to have little appetite for human-rights issues. Last August, when a Kimberley Process peer-review team arrived to check the country’s compliance procedures, Angolan forces were just mopping up a major operation to expel some 30,000 illegal Congolese miners from Angolan territory near here. According to a U.S. State Department report citing local media and nongovernmental organizations, military and police “arbitrarily beat and raped detainees” and forced them to march to the border without food or water. The government has denied committing abuses and says the army was merely securing the nation’s borders.
A confidential Kimberley Process report on the review visit makes no mention of alleged human-rights abuses, although it criticizes Angola for failing to present a plan to better document the output of peasant mining. The group spent just two days in Lunda Norte, an area near the Congo border that has become a flashpoint for clashes between diggers and security forces. According to a draft of the internal report, the delegation intended to visit the site of a large illegal mining operation but was thwarted by “a last-minute decision to participate in a graduation ceremony for new border patrol security officers.” As the team was preparing to depart, the chairman of the Kimberley Process at the time, Namibian politician Bernhard Esau, pronounced the visit a success and brushed off questions about alleged abuses of peasant miners. “The Kimberley Process is not a human-rights organization,” he told reporters.
The roots of Angola’s current blood-diamond problems have much to do with geology. Unlike in Botswana and South Africa, where multinational corporations use heavy machinery to extract diamonds out of deep shafts, much of Angola’s diamond reserves are alluvial, meaning the stones have been washed out of the earth and scattered across the countryside. They’re available to anyone with a shovel and wood-framed sieve, and are difficult for mining companies to secure. More than a million people world-wide earn a living from artisanal mining in alluvial fields, including tens of thousands in Angola alone.
Angola’s artisanal miners, known in Portuguese as garimpeiros, played a pivotal role in the country’s civil war, which lasted for 27 years and left at least a half-million people dead. U.S.-backed troops of the Union for the Total Independence of Angola, or UNITA, fighting to depose a Soviet-supported socialist government, controlled much of the country’s diamond territory. To fund their war effort, they enlisted peasant diggers from here as well as neighboring Zaire, now known as the Democratic Republic of the Congo.
While UNITA forces committed plenty of atrocities, some people here in Cafunfo say they generally treated garimpeiros fairly. They allowed diggers to keep a percentage of the diamonds they found and established an immigration policy to bring in Congolese workers on 30-day permits, says Enoque Jeremias, a local human-rights investigator. “It was a fair system,” he adds.
The war’s end led to a surge in diamond production, as large mining companies dusted off old claims and launched new operations. Among the players are Odebrecht SA of Brazil, Russia’s state-owned Alrosa; and a company controlled by Israeli diamond magnate Lev Leviev, all of which operate in joint ventures with the government diamond company Endiama.
But the garimpeiros were hardly prepared to put away their shovels. There’s little agriculture here and almost no jobs outside of the mining sector. Plus, vast parts of the countryside haven’t even been explored yet, much less mined. The peasants proved adept at finding diamond deposits that the big companies missed, and this so-called informal production continued to account for more than one-quarter of the country’s diamond exports, according to the Partnership Africa Canada, an Ottawa-based nongovernmental agency that deals with mining issues.
To soak up those diamonds, Angola authorized foreign-run buying operations to be established in the bush. U.S. diamond giant Lazare Kaplan International Inc. became a fixture in the area, signing a technical agreement with the government to set up buying houses. Lazare Kaplan says it let the agreement expire in 2008, when world diamond prices collapsed, and is now winding down operations in Angola. Lazare Kaplan Chairman Maurice Tempelsman, the late-life companion of Jacqueline Kennedy Onassis, says the company was trying to bring development to the area and help strengthen Angola’s Kimberley Process controls. “I am strongly committed to the protection of human rights,” Mr. Tempelsman says, adding: “I believe in this imperfect world, involvement in trying to bring about constructive change is the best course.”
Lazare Kaplan’s withdrawal has left a wide-open field for other buyers, including a company controlled by Israel’s Mr. Leviev, as well as a flood of newcomers from West Africa and the Middle East. Their storefronts line the muddy streets of Cafunfo, trying to outdo each other with mirror-signed bling.
For Ahmad Mouein, a Lebanese buyer who bills himself as “Boss Mouein,” it’s a great business opportunity despite the recession in the diamond market. “Sometimes a digger here can sell you a $500,000 stone for $5,000, $10,000,” he marvels. He says the Kimberley Process hasn’t succeeded in its primary mission of halting smuggling. “Kimberley or not Kimberley, my friend, for the diamond, you can do what you want.”
By many accounts, the presence of these buying houses has only fanned the violence by encouraging more peasants to get into the mining business at the same time that government security forces have been tasked with stopping them.
At one such illegal mine, an hour’s motorcycle ride over trails outside of Cafunfo, a Dantesque scene unfolds. Perhaps 500 young men are clambering over a vast pit dug deep into the red earth. They’ve been at it for a year now, and figure they have months to go until they hit a vein of gravel they believe will contain diamonds. Their tools are rudimentary—pikes and shovels—and the work is backbreaking, alleviated only by the homegrown marijuana many smoke and the small sachets of alcohol that can be had everywhere for a dollar.
They live on the site in homemade tents and work in shifts. To support themselves, they say, they make agreements with buyers, especially the West Africans, to split the take.
Caxaculo Milonga, 44, says he’s on the hook with a man he knows as Boss Ibrahim from Senegal. Although Boss Ibrahim paid medical expenses when a run-in with police and soldiers sent him to the hospital, Mr. Milonga complains that the deal is unfair because he has to give Boss Ibrahim 50% of all production, then sell the rest to him at a rock-bottom price. “We work like slaves and they’re cheating us,” he says. “You can’t argue or he’ll call the police.” Another garimpeiro says his sponsor at one time was a police investigator in Cafunfo, making any negotiation pointless.
Concerns about security forces are never far away. Last year, as part of the latest effort to expel Congolese diggers, the Angolan army moved into the area in force. In recent months patrols have paid a visit to the mine, harassing miners and slapping them with the flat side of their machetes, the miners say. The diggers worry that the army is just waiting until they hit gravel so they can move in and take the diamonds for themselves.
Near another illegal mining site, peasants described a similar scenario. In December, an army patrol swept through the village of Bundo in search of mining tools, says Cazanguia Andre, the 60-year-old deputy chief of the village. He says he ran into them on the way back from tilling his field, and they accused him of being a garimpeiro. They then hit him twice in the head with a rifle butt and struck him with a pole, he adds, breaking his arm. Later, after they discovered shovels at the local church, which Mr. Andre says were being used for construction, they arrested three people.
A lieutenant at a nearby temporary army encampment declined to be interviewed but said his squad hasn’t committed any abuses of the local population and isn’t involved in any mining activities.
Back in Bundo, four garimpeiros give a different story. They say when soldiers swept through they discovered the garimpeiros working with a water pump in a pit. The soldiers confiscated the pump. Then a negotiation ensued, says one garimpeiro, and the soldiers agreed to give back the pump in exchange for $54—as well as a split of the action. “When we hit the gravel, the soldiers will be present to get their share,” he says.

Blood diamonds were bred out of civil wars. The wars maybe over but the corruption has just gone higher up the ladder. Puppet masters of blood diamonds are the governments themselves. If the U.S. continues to barter and trade with corrupt regimes, then the U.S. buying public has no one to blame for the blood that is on our hands. –Fred Cuellar

Click here for original article.

De Beers to Reduce Diamond Supply 50% on U.S. Slump

By Carli Lourens for Bloomberg

Jan. 21 (Bloomberg) — De Beers, the world’s largest diamond producer, will reduce the amount of rough gems offered to customers by about 50 percent until April after U.S. retail sales slumped over Christmas.

Retail sales in the U.S., the world’s largest diamond market, dropped by as much as 20 percent over Christmas and “underperformed” the company’s expectations, said Varda Shine, head of Johannesburg-based De Beers’s marketing unit. The drop in full-year U.S. sales was in “the high single digits,” Shine said in a speech yesterday, a copy of which was e-mailed today.

Consumers in the U.S., which accounts for about half of global retail sales, are reining in spending as the economy shrinks. ZAO Alrosa, Russia’s diamond monopoly, said last month it expects fourth-quarter sales last year to drop 31 percent below average quarterly levels. Toronto-based BRC DiamondCore Ltd. said last week it will extend a shutdown at its South African operations and start talks with labor unions over job cuts because of “depressed” diamond prices.

Global demand contracted marginally last year and will do so again this year, Shine said. Diamond prices fell about 11 percent in the last six months according to an index compiled by Polished Prices, which tracks prices.

“The diamond market will worsen before improving, simply because the chill of global recession is going to become increasingly evident in the form of accelerating job losses,” Des Kilalea, an analyst at RBC Capital Markets in London, wrote in a report yesterday. “People don’t rush out to buy luxury goods in a recession.”

‘Limited Market’

Generations have seen “world wars, a depression, and too many booms and busts to remember, but none of us have ever seen anything quite like this,” De Beers managing director Gareth Penny told customers at a function late yesterday. “There is no point in producing or trying to sell it when there is a limited market for it.”

De Beers has already started reducing capital expenditure, cutting discretionary spending and reviewing staffing levels across all operations, Penny said. The company’s production cuts will be “significant,” he said.

Market reports estimate De Beers will reduce annual output “well in excess of 30 percent,” RBC said in its report.

De Beers’ sales of rough diamonds, or gems that have yet to be cut or polished, climbed 10 percent to $3.3 billion in the first half. Demand growth in China, India and the Middle East helped counter lower gem sales in the U.S.

Anglo American Plc, which is based in London, owns 45 percent of De Beers with the rest owned by the Oppenheimer family and the government of Botswana.

Original Article on Bloomberg.com.

Blood Diamonds

Blood diamonds are synonymous with conflict diamonds. The term is designed to dramatically emphasize that behind the glamorous image of diamonds lies a web of corruption, influence peddling and brutality in some parts of the diamond-producing world.

Consumers began clamoring for assurances that the diamonds they desired were not being used to finance conflicts. To that end an alliance of government, civil and industry groups created the “Kimberley Process” to clean up the trade in rough diamonds.

First, in 1998 the United Nations (UN) initiated action that culminated with the establishment of the “Kimberley Process.” However, the UN’s definition of the term blood diamond or conflict diamond is very narrow and was designed to get everyone on board. The definition reads as follows:

“A blood diamond (conflict diamond) refers to a diamond mined in a war zone and sold in order to finance an insurgency, invading army’s war efforts, or supporting a warlord’s activity.”

Next, in July 2000, the World Diamond Congress in Antwerp passed a resolution blocking the sale of blood diamonds. The resolution installed an international certification system on the export and import of diamonds. Countries could only accept sealed packages of diamonds with an official seal, and criminal charges would be levied against anyone and everyone trafficking in blood diamonds.

Six months later, in January 2001, the top elements of the diamond industry formed a new organization—the World Diamond Council. They drafted a process whereby all know diamond rough could be “certified” as coming from a non-conflict zone. Thus, the “Kimberley Process” was created and approved by the UN in March 2002. The United States followed with the Clean Diamond Act in April 2003, and the “Kimberley Process” became law in the United States.

According to the “Kimberley Process” website, there are now 46 members blessed by the Kimberley experts. Only the Ivory Coast (Africa) has rebel forces that control diamond production, but less than 0.2% of the industry.

Our narrative could end here, but I have a much broader definition for a blood diamond. Here is my definition:

Any diamond that was mined using oppressed labor in unsanitary working conditions.
Any diamond whose oppressed labor force was victimized in the form of rape, mutilations (loss of arms or legs), beatings, verbal abuse, unconscionable working hours, and below poverty wage structure.
Any diamond that the company who mined it or controls its tariffs is part of a monopoly.
Any diamond that funds wars or corporate greed where profits supersede human life.
Any diamond that is used to oppress any human life or the extinction of any race, tribe or sub-culture.
Any diamond that is purposely graded incorrectly and marketed for corporate profits instead of consumer satisfaction.
Any diamond that is sold at a price above its secondary market resale value forcing the consumer to take a significant loss if it was to be resold.

So, what percentage of diamonds sold in the world today are blood diamonds? Well, maybe the question should be what percentage of diamonds are NOT blood diamonds.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Building Noah’s Ark & Joining Lucy

Genesis 6 (New International Version)

1
When men began to increase in numbers on Earth and daughters were born onto them,2 the sons of God saw that the daughters of men were beautiful, and they married any of whom they chose.3 Then the LORD said, “my spirit will not contend with man forever, for he is mortal; his days will be a hundred and twenty years.”

4
The Nephilim were on the Earth in those days- and also afterward- when the sons of God went to the daughters of men and had children with them. They were the heroes of old, men of renown.

5
The LORD saw how great man’s wickedness on the Earth had become, and that every inclination of the thoughts of his heart was only on evil all the time.6 The LORD was grieved that he had made man on the Earth and his heart was filled with pain.7 So the LORD said, “I will wipe mankind whom I have created, from the face of the Earth- men and animals, and creatures that move along the ground, and birds of the air- for I am grieved that I have made them.”

Well, let’s see. In the last couple of weeks Bear Stearns got bought out by JP Morgan Chase for $2.00 a share; oil broke past $110 a barrel; the dollar dropped to an all-time low against the Yen and the Euro; the housing crisis is still out of control; gold passed $1,000.00 an ounce and platinum past $2,200.00 an ounce. The president is telling us the check is in the mail.

Now I have an idea how Noah felt before the Great Flood. I also have an idea how he must have felt after it started raining. Having built his ark he must have felt relieved! (If there was rain with no ark, he would have been kicking himself!). In the current economic climate, anyone who has jewelry, is thinking of getting jewelry, or is trying to unload jewelry, needs to build a financial Noah’s Ark to get them through the storm that is currently upon us. Here’s what you need to know.

Contemplating on buying jewelry? Diamonds- yes! Metals- no!

Diamond prices are up over 40% in the last two years, and in certain sizes and qualities, prices are expected to double by 2010. If you’re thinking about getting an engagement ring, thinking about upgrading for your anniversary, looking to buy your dream rock, DO IT NOW! Not tomorrow, or this Christmas, NOW! You can thank me later! Diamonds are hot since DeBeers closed their last three underground mines in September 2005 and the prices are going to get very, very, very expensive before they level off. They won’t go down. Read my lips, the prices are in the process of doubling and tripling; they won’t go down. Okay, now let’s say you just bought a new diamond and now want to pick out a gorgeous platinum or fancy white/yellow gold setting… STOP! Keep the setting simple. If you have an old setting you can use over the next 15-18 months, do it. Metal prices have risen as far as the secondary market will allow. Tons of scrap gold and platinum are flooding back into the primary market that is extinguishing the scarcity. The “hot” metals market is ending and you can thank the greed of consumers who are taking all their old jewelry and cashing it in. Within the next year to year and a half, platinum will be back to under $1,000.00 an ounce and gold will be sitting comfortably around $500.00 an ounce (where it should have been years ago). The point is, don’t buy an expensive setting now that will be half-price next year!

Have jewelry you want to unload? Go to you local jeweler and ask about cashing out any old piece of jewelry while you still can. While I write this article gold has already dropped -$61.00 an ounce! The chance to forget eBay and sell all your old baubles and beads will soon be over!

A smart jewelry portfolio is like Noah’s Ark. In the Ark should be one or two of your favorite things that you love to wear and everything else should be liquidated. If you are a true connoisseur of diamonds, you’re going to need all the cash you can get from the stuff you don’t wear anymore so you can immediately buy the diamonds of your dreams before the prices are out reach!

Don’t let Lucy be the only one in the sky with diamonds!

Happy buying/selling!

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

The Blue Nile Blues

A little over a year ago, Blue Nile stock peaked at $106.16. As of close of market today, the stock was at $22.90. What a difference a year makes! One might ask if the stock was over priced or the business model is unraveling, or is it just bad timing?

For those of you who don’t know about Blue Nile, let them, in their own words describe what they do.

“The company is built on a unique idea: choosing an engagement ring doesn’t have to be complicated. Diamonds can be simple to understand. Making the right choice can be easy.”

A few years ago, Bear Stearns, AIG, Fannie May, Freddie Mac, Lehman Brothers, Wachovia, Ford, G.M., IndyMac, American Express and countless others said to us with a very similar drum beat, “Buying is easy, credit is easy, credit default swaps and derivatives aren’t complicated, come follow us to the land of riches. Follow us to easy street with cars and homes and diamonds. You deserve a McMansion. You earned a Mercedes Benz. Life is short; buy now! It’s easy! Just charge it! That’s the American way! Want to start a war or two to feel better about 9-11? No problem! Just charge it! Put it on the tab! Pay for it later! Bills? Just pay the minimum. You don’t want to miss the Grand Old Party!

Well America, “Easy come, Easy Go.” On the world stage, all the developed nations took the short cut and are shocked that we stabbed ourselves in the back.

Buying should never be easy. It should be hard. It should be thought out. It should be complicated enough to stop our impulse buying reptilian brains from stockpiling more crap that we could use in ten life times. Half the world doesn’t have clean running water and depends on fire as the main source of energy, and we want easy?

Blue Nile believed they could build a company with no assets. No skin in the game; use other companies’ inventory, play middle man and walk away with an Ebay broker commission. Did it work? Kinda—until customers found out they couldn’t return merchandise they didn’t need after 30 days—until customers found out that they couldn’t exchange mistakes after 30 days—until customers found out that all those precious “certificates” that Blue Nile proudly tout with every diamond sale don’t guarantee the quality or authenticity of what they bought.

How would you feel about buying a refrigerator and getting home and realize you got a trash compactor? A little crushed?

Sadly, in the end Blue Nile, if they survive will be remembered not for top quality at the best price but as a consolidator of ground round that has passed its expiration date. Is it still safe to consume? Don’t ask me; I like to buy things with my eyes wide open from someone who stands behind their product and is there for me if anything goes wrong.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

What’s in a Name?

The Brand Naming of Diamonds

Whether most people realize it or not the diamond industry has been going through a revolution over the past few years. From Baked Diamonds1, Bonded Diamonds2, to Color Typing3, the diamond industry is going through a major face-lift. And it isn’t over yet. It won’t be long before the slogan “A Diamond is Forever” will be replaced with ” A DeBeers Diamond is Forever” or some other name brand or stamp to segregate themselves from the pack.

No longer will any large diamond conglomerate do generic advertising that will benefit the new competitors on the block. With DeBeers strangle hold of the world’s diamond market barely at 60% from their good old days of 85%, their long held monopoly is over.Other players like Argyle Diamond Mines from Australia, Ekati from Canada and the Russian United Syndicate are staking their claim to a piece of the polished diamond pie.

What this means to the consumer is, each diamond syndicate will be stating why their diamonds meet a higher level of excellence then their competitors. Soon you’ll be doing the “Pepsi Challenge” but with diamonds. I can just see the ads now. Let me set the stage. A dark candle-lit restaurant; cherries jubilee have just been served, the Dom Perignon has been poured; then you’ll see a dark haired man with chiseled good looks say “Darling, you are the light that engulfs my life. Would you make me the happiest man in the world and be my wife”. At that moment he’ll pop open a little black box and reveal a beautiful diamond engagement ring. The next thing you’ll see is her closing the box and handing it back and say “Listen baby, if I’m not good enough for an original DeBeers diamond, the King of Diamonds, then I’m going to have to say No!” At that moment the narrator will say “Why would you take a chance on a copy cat when a DeBeers original is where it’s at. A DeBeers diamond when our one of a kind meets your one of a kind!” Oh, brother!!

The thought of this sickens me but I know its coming. With the breakup of the DeBeers monopoly, DeBeers has no choice but to start marketing their diamonds as the first, the best, the original. Whether they will use their famous DeBeers name or market under another name remains to be seen. Through a massive media campaign which has already started in the U.K. DeBeers will try to intimate that they choose only the purest ripest, most succulent diamonds in the world. (Maybe they’ll team up with Sunkist) That their standard of excellence supercedes the Canadians, the Australians or the Russians.

Listen folks, regardless of where you dig up a diamond or who mines it, a diamond is a diamond. Slick advertising campaigns may have convinced women from here to Japan that a diamond deserves to be on their wish list but to say that one brand name diamond, like the Millennium diamond, is better than another of the same quality just because of who is selling it is ridiculous.

Every diamond syndicate will be selling great diamonds, good diamonds and crappy ones, Don’t let the new advertising onslaught that is to come convince you otherwise. Every consumer will still have to go over the 4 C’s and warranties on any diamond they might consider buying regardless of what label is stuck on the rock. Is Coke better than Pepsi? You decide, but is a DeBeers diamond better than an Argyle diamond? The answer is No!

Footnotes

1. A Baked diamond is a diamond that has been heat treated to remove nitrogen or boron from a diamond to improve its color. Baked diamonds are brittle and less valuable.

2. A Bonded diamond is a diamond that is fully warranted by the jeweler and covers breakage, buy back, exchange and authenticity.

3. Color typing is the divisioning of individual color grades into types to more accurately assess the diamonds nitrogen context.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Warping

One more thought on crown & pavilion angles for the perfectionist

Is it possible for any single round or fancy shaped diamond to have more than one crown angle or pavilion angle? You bet! In fact a round diamond can be checked anywhere on its circumference and fancy shaped diamonds, usually checked at the 3 and 9 clock positions, can also be measured slightly off those positions to render multiple crowns and pavilion angles.

Now here is the million dollar question. When a lab grading report appraisal is done, which crown and pavilion angle are you given? Are you given the best one? Probably. The worst one? Not likely. In an ever competitive race for your dollar, the cutter, the jeweler, and even the appraiser can be caught up in “warping.”

Warping is the placement of accurate pavilion and crown angles on the diamond but solely in one location. The rest of the crown and pavilion angles are off to the benefit of weight retention. There are two types of warped diamonds – inward and outward. An inward warped diamond may have the side of the pavilion slightly curved to pickup the correct measurement. In an outward warped diamond there is a slight bulge in one location above or below the girdle. Warps to a good cutter can make that cutter many more dollars. Knowing that most labs and appraisal services check for the best measurement or an average lets a cutter push through a diamond as a class 1 or 2 when in actuality it is a class 3 or 4 (a poorly proportioned diamond).

In purchasing your diamond don’t be afraid to ask the question, “Is the crown and pavilion on my diamond based on a single measurement, an average or on the worst?”

If a diamond’s worst crown and pavilion angles are acceptable then surely the rest will be as well. You can also ask for minimum and maximum pavilion and crown angles to see the extremes in both directions. If a jeweler doesn’t know how the angles are derived then I would not put much faith in the numbers he tells you.

PS: The only two pieces of equipment that can accurately check for warping are Sarin and Megascope machines. Also see Diamond: Parts of the Stone.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Tricks of the Trade

BLUE DIAMOND BLUES

Some jewelers may try to market a “blue-white” diamond as though it were a white diamond with a hint of blue, and more valuable than a plain white diamond. It’s not! It’s a diamond that fluoresces blue and is therefore less valuable. Avoid it!

THE “50% OFF” SALE

Browsing through your Sunday paper you spot an exciting ad: a local jeweler is having a “50% Off” sale on diamonds! Wow! You jump into your car, drive to the store, and you make what you are sure is an incredible buy on a one-carat diamond.You’re still patting yourself on the back a week later when you happen to walk past another jewelry store where you see the same size, same quality diamond selling for less than what you paid and it’s their regular price! What happened?

You were taken in by a fake sale. Many jewelers run these sales. They’ll take a diamond that is worth, say, $1,000 wholesale and instead of marking it up 100%, which is standard practice, they mark it up 400% and tell you that $4,000 is the regular price when in fact the regular price for such a stone would be $2,000. Then the jeweler takes 50% off the inflated price and sells it to you for full retail, $2,000.

The way to know if you’re really getting a sale price is to compare the jeweler’s price with the wholesale price list in the book. If the jeweler’s regular price is more than double the wholesale price, you’re not getting any bargain.

For example: Joe’s Jewelry Store has a one-carat VS1-G on sale for $12,400, marked down from $24,800. You look at my price list and see that a one-carat VS1-G wholesales for $6,200. Therefore, full retail should be $12,400. Joe has artificially inflated the “regular” price to trick you into believing you’re getting a bargain.

“BAIT AND SWITCH”

This is a term that’s been around for a long time, and it’s not limited to the diamond business. Bait and switch refers to anyone who runs an advertising special on a particular item just to get you into the store. When you go to the store, however, you’re told that the advertised item is sold out. Then they try to sell you something else – invariably, something more expensive. The jeweler hopes that since you’ve already made the trip to the store, you won’t want to go home empty-handed.

Don’t be impatient! Many people arrive at the store determined to buy something and get talked into something they don’t really want. Take control! Grade the jeweler using the Jeweler Questionnaire Sheet in my book, and if he or she passes the test, stick around and look at some diamonds, using a scratch sheet to check each one. Compare the prices to the wholesale prices in the book to see what kind of deal you’re being offered, and for an exact updated price on a particular stone, call my HelpLine.

“IS WHITE REALLY WHITE?”

Jewelers love diamonds that fluoresce blue, and will sometimes install special lighting to enhance the fluorescence of their diamonds. The blue masks the yellow color that might be in the diamond and makes it appear to be a higher color grade than it really is. Always take the loose diamond you’re looking at and place it on a white background to check the color, and make sure there are no spotlights shining on it. Always take the loose diamond you’re looking at and place it on a white background to check the color, and make sure there are no spotlights shining on it.

“GRADE BUMPING”

The Federal Trade Commission requires that a diamond be within one clarity and one color grade of what it is originally sold as. Because of this, jewelers tend to “bump” the grade. For example, if a jeweler buys a stone as a VS1-G, he’ll bump it up and sell it as a VVS2-F. If you buy it as a VVS2-F and have it appraised as a VS1-G, the dealer is legally covered, because he sold it within one grade of what it really is.

“THE FRACTION SCAM”

Some jewelers will list the weights of their diamonds only in fractions, such as 3/4 of a carat. Your next question should be, “Well, is it 75 points are not?” Many jewelers will call anything from 65 to 75 points a 3/4 carat diamond. These same jewelers will call anything from 90 points to 100 points a full carat. This is illegal. A diamond must weigh within half a point of its stated weight. You’ll notice a jeweler will never round a diamond down they’d never call an 85-pointer a 3/4 carat stone. Ask the jeweler to weigh the stone, in front of you, on an electronic scale. If he says he can’t because it’s in a setting, you shouldn’t be looking at it anyway. Only buy loose diamonds.

“THE OLD SWITCHEROO”

You’ve shopped around, rated the jewelers, graded the diamonds, and finally found the stone you want. You lay your money down and order a setting. When you get the ring, you have it independently appraised – only to discover that the diamond in the ring isn’t the same stone you purchased! The jeweler has pulled a switcheroo. You go back and confront him, and he accuses you of switching stones. What now?

Well, sad to say, you’re stuck. There’s really nothing you can do, no way to prove a switch was made. You must prevent the switcheroo before it happens.

When you decide on a diamond, get the jeweler to put in writing the exact weight, and the clarity and color grades of the stone. Before he diamond is mounted, have the jeweler show you where the blemishes and inclusions are, and plot them on a drawing. Keep this drawing with you, and when you return to pick up the mounted diamond, check it again, looking for the same flaws that are on your drawing. If they match, you have the right diamond.

“THE SANDBAGGER”

If you’ve purchased a diamond by following all my instructions, you shouldn’t feel the need to go to an independent appraiser to double-check your purchase. But if you do, watch out for the sandbagger! The sandbagger is someone who lies to you and tells you that you’ve been taken, that your diamond isn’t worth what you paid for it. Why would he do that? So that he can recommend where you should buy your diamonds – no doubt at a place which gives him a kickback! Or he may tell you, “You should have bought from me.”

Fred’s Advice: If you ever want to have the diamond checked, don’t take a chance. Send it to GIA for an unbiased opinion.

“THE VANISHING ACT”

Now you see it – now you don’t! Carbon, that is. There is a laser beam process for removing carbon from inside a diamond. It’s called laser drilling. A diamond that contains black carbon, visible with a 10X loupe, is zapped with a fine laser beam which vaporizes the carbon, removing the black spot.The problem is that the laser beam creates a tunnel from the surface of the diamond to where the carbon used to be. You might not be able to see this tunnel with the naked eye, but you’ll see it under a loupe. And if a stone has been drilled several times, it can be weakened.

Laser drilling can make a diamond more attractive to the eye, but it can also lower the resale value. Beware! The Federal Trade Commission no longer requires jewelers to disclose to consumers whether a diamond has been laser drilled.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

See No Evil

My job is to talk about diamonds. How to get a good one, how not to get ripped off, how to get the most for your money. But, I’m seeing a society where the “truth” belongs to the one who can tell the best story, not the one based on the facts.

For example, every year 5,000 people are indicted, convicted and sentenced for a whole list of horrific crimes. From petty theft, to rape, assault and even murder. What is even more horrific is all these crimes hold three special things in common; the men and women that are convicted were primarily incarcerated on eye witness testimony, spend an average of ten years in prison and oh, one more thing all of these criminals are eventually set free because they are later proven to be innocent. How must it feel to spend a decade of your life telling the whole world you didn’t do it, to lose your family, friends, livelihood all based on what some one else believes they see. As it turns out magicians knew it a long time ago, that the hand was quicker than the eye.

The eye can be fooled! It happens everyday. In our streets, in automobile showrooms, to tires we’re told are safe enough to drive our families around. Now I’m not here to talk about how our justice system is broken (I think all but the most naïve of us already knows that) or about slick car salesman who try to sell us the virtues of undercoating or who roll back odometers to give us the perception of more value. It’s not even to pick on Firestone who felt profits superseded the quality of a tire and the lives that trusted those tires not to explode when driving 65mph. For me it’s still about diamonds.

“Seeing is believing”, you might say. But does believing constitute the truth? Does it constitute a fact? Well try this on for size, for the last few years the diamond industry has been fighting the Federal Trade Commission (FTC) to not have to disclose laser-drilled diamonds. The industry felt it was an insult. For starters, to require disclosure of a treatment that alters the value or durability by changing the FTC guidelines would be paramount to announcing to the world that jewelers are dishonest. Jewelers can’t be trusted to tell the truth.

For God’s sake, the industry can police itself. But every year over 5,000 complaints are registered at the Better Business Bureau, FTC and Jewelers Vigilante Committee that this system of the fox guarding the hen house wasn’t working. People were and are buying diamonds every day based on who has the best story to tell and with a constant reminder “See for yourself, isn’t it a beautiful diamond?” Even in the casinos with no clocks and free liquor you know what your odds are. But in a jewelry store with its hundred canned spotlights, its very good stories, its lab grading reports and its appraisal documents, we lay our money down. Is it worth it? It must be it’s an AGS000. Is it worth it? It must be, it’s been graded by GIA. Is it worth it? It must be, it’s 100% natural. Is it worth it? It must be, just look how pretty it is. And that is where they get you. That is where they set the hook. Then to reel you in, the jeweler says, “How can you put a price on something that lasts forever?” The love card.

So you forget about the months or years it took you to save your money or the loan you have to take out or even the VISA you’re going to max out at a 22% interest rate because how can you put a price on love? The illusion is complete. Like the frog that turns into the handsome prince. The rock becomes the magical diamond. Seeing is believing or maybe better said believing is seeing. That’s where any good salesman will get you. If he gets you to believe; you will see. Last month the FTC changed their guidelines and made it mandatory to disclose laser-drilled diamonds or for that matter any form of treatment that would give you the impression that something is better or more valuable than what it is.

The convict gets released, the automaker gets fined, the tires get recalled. Is that the lesson here? The end justifies the means until you get caught. The poor go to jail, the rich go free. If we see no evil than, everything’s okay. Good always triumphs in the end. Let me ask you this, if 5,000 men and women are convicted for crimes they didn’t commit, if there are over 5,000 complaints each year about non-disclosure in treatments, how many people are still in jail that are innocent and how many diamonds are on the fingers of our loved ones and are worthless?

Here’s one more thing to chew on; it has just been announced (to the jewelry industry not the public of course) that a company by the name of 3-Beams Technology (a separate division of Norsam) has created a process called Focus Ion Beam Technology. FIB for short. Apparently taking ideas from Los Alamos National Laboratory, FIB instruments can focus a beam of ions down to a diameter of 7 nanometers (that’s .000007 millimeters, or .00000028 inches). Using this technology they can drill a diamond to remove carbon leaving a drill hole 1/1000th the size of the current technology.

According to 3-Beams’ CEO, Jayant Neogi, with a special modification a gas can be injected into the void which will solidify making the drill hole practically invisible.

FTC makes a law that treatments must be disclosed then the industry we were supposed to trust announces a new way not to get caught. What’s the moral of this story? Seeing is not believing, take everything with a grain of salt and please cut the deck before you’re dealt a hand.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Royal Asscher Diamond

The Royal Asscher Diamond

It’s not very often in one’s life you can hold magic in your hands that all at once reflects the magnitude of the past and the promise of the future. The Royal Asscher diamond is that magic. Cut from an octahedral shaped piece of rough to a 74 facet step-cut octagon, this diamond exhibits all the punch of a hurricane without sacrificing its quiet sophistication and regal temperament. Quite simply, lightning has struck twice for the Royal Asscher diamond company that first introduced its predecessor, the Asscher, back in 1902 and now the Royal Asscher at this summer’s Las Vegas Jewelry Show.

With just a glance one is pulled into this masterpiece like a fish to water, drawn deeper and deeper into its trance and pond-like effect that can only be described as a pebble tossed into a lake that ripples and reverberates its cinematic impact upon the fortunate viewer.

When I interviewed “Joop” Asscher for this article (his friends call him Joe). I was immediately put at ease by his soft-spoken demeanor. A man of 51, married with two children, he is descended from a line of cutting royalty dating back to 1854. His grandfather, Joseph Asscher, was entrusted by King Edward VII of England with cutting the largest diamond ever found, the Cullinan weighing in at 3,015 carats. Asscher’s clients read like a who’s who of royalty from Emperor Hirohito and Emperor Akihito of Japan; Queen Elizabeth II of Great Britain; Queen Juliana and Prince Bernhard of the Netherlands; King Carl-Gustav and Queen Sylvia of Sweden; King Constantine and Queen Annemarie of Greece and Queen Beatrix and Prince Claus of the Netherlands.

When I asked Joe why the new Asscher he simply said, “It’s a diamond whose time had come! With the mass marketing of a new brand or style practically every single day it was time for the old guard to take its rightful place in history.” And I couldn’t agree with him more. Every Tom, Dick and Harry with a cutting wheel thinks they can invent a new standard overnight, which isn’t going to happen. What impresses me so much with the new Asscher is its attention to detail and symmetry. Without it you’d just have a lifeless block of ice. More good news is the marketing arm Asscher has chosen to deliver their new baby and that’s by making veteran M. Fabrikant & Sons the sole North American distributor.

Recently, I put the new Royal Asscher through its paces measuring every angle, facet and percentage. This is how it performed:

	Royal Asscher	Traditional Emerald Cut
Brilliance:	52% to 55%	70% to 80%
Dispersion:	45% to 48%	20% to 30%
Light return:	67% to 91.3%	38.8% to 54.78%
Bow tie:	None	Medium to strong

Summary

Where the Royal Asscher appears to get its magic is from its carefully sculptured pavilion. By removing the keel line and replacing it with a small or pointed culet and slightly bowing out the step cut pavilion main facets, the pavilion is transformed more into a mirrored bowl than an ornamental cone. Opposing pavilion main facets are precision cut to twin themselves in order to not disrupt the fluidity of the “Pond effect” created upstairs from the nucleus of the table to the octagonal-faceted girdle. Practically from any vantage point the diamond appears to be poetry in motion always desiring to reflect and redirect a kaleidoscope of bar flashes back to the eye.

In closing, I think the thing to remember here isn’t we’ve got another traditional cut diamond with a new brand name, because we don’t. Brand names don’t sell diamonds, it’s the fire from the ice that will determine the success or failure of any new cut. This diamond isn’t breath taking because it’s called The Royal Asscher, its beauty lies in its cut and facet arrangement. That is true today as it will be true a thousand years from now. Quite simply you’ve got to see it to believe it. Mere words do not suffice. To find a retailer near you call (800) 432-8895.

Please note that Royal Asschers are no longer on the primary market since 2005. The only way for one to purchase this cut is through the secondary market—aka used diamonds.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Monarch Diamond

“Should Jewelers start warning customers that the diamond they’re buying could be treated for color, but there is no way of knowing for sure?”

That’s a direct quote from Jewelers Circular Magazine, Sep 1999 page 92. What they are talking about, along with everyone else, is what could be “The greatest gemological crisis to hit the diamond industry!” That’s at least what Gemological Institute of America President William Boyajian said at a recent symposium. The Monarch Diamond is a non-detectable, color-enhanced, treated diamond that is now on the market and creating havoc.

The diamond is the brain child of General Electric & Lazare Kaplan and sold through a company called Pegasus Overseas Limited. In a nut shell here’s what they do. They take an inexpensive brown or yellow diamond, heat it at high temperature and pressure and bake out the nitrogen or boron present to make it white. Like a twice-baked potato, with one exception, this one will leave a bad taste in your mouth!

Baked diamonds, or annealed diamonds as some people refer to them, though they are undetectable to labs or independent appraisers have one major flaw, they are brittle! Moreover treated diamonds have little or no secondary market value. Insist your diamond comes with a bonding document to guarantee that it is natural or you could just wind up buying one of the most expensive pieces of costume jewelry ever.

*Monarch Diamond* formerly known as Pegasus Diamond.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.”
More questions? Ask the Diamond Guy®

Inscription Deception

Subheadline

One of the latest crazes is to have your diamond laser inscribed. What I’m talking about is the placement of serial numbers by a laser on the girdle of diamonds for identification purposes.

Perception: By placing a serial number on the girdle of a diamond that matches a certificate an independent appraiser can verify if the diamond matches the certificate. Also if the diamond is ever stolen and recovered the serial number can be put into a database so the diamond can be returned to you. The inscription is permanent like a tattoo and cannot be removed or altered without a major weight loss or potential damage to the diamond.

Reality: The only way to be 100% sure a diamond matches a certificate is to check its measurements and match up its plotting of inclusions and blemishes. Anybody can take an extra certificate and laser inscribe its number on a diamond that doesn’t match it. Now it maybe true if some common thug stole your diamond having a serial number that matches your certificate might bring it back to you, but it is unlikely. All sophisticated jewel thieves have the girdles repolished to remove the laser inscription so the diamond cannot be traced. This of course dispels the notion that an inscription is permanent and cannot be removed.

I have to hand it to all those companies that keep trying to come up with some new gimmick to hook us on but come on, let’s put this in the simplest of terms. If we already have the fingerprint (the plotting) of the diamond we don’t need to carve our initials into it to prove it’s ours.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.”
More questions? Ask the Diamond Guy®

High Definition Diamonds, Fact or Fiction?

High Definition Diamonds

Fact or Fiction?

Scene: (Also known as “The Set Up”.) Young man walks into a jewelry store to buy a diamond. We’ll call the young man Ralph and the store salesperson Buddy.

Ralph: Hi there, I’m Ralph and I’m looking for a round diamond.

Buddy: Hi, I’m Buddy. What kind of round are you looking for?

Ralph: A shy 1ct, VS-1, G, Class II, no fluorescence, natural and bonded.

Buddy: No problem, what faceting arrangement would you like?

Ralph: Faceting arrangement?

Buddy: Well, are you looking for a Modern Era Cut and if so, which one?

Ralph: Huh?

Buddy: A Modern Era Cut is not only well proportioned, but comes in 58-144 facet combinations.

A Non-Modern Era Cut would be a single cut with 16-17 facets or a full cut 57-58 facets, but Old Miners (squared round) or Old European (high crown, sawed off culet) for weight retention.

Ralph: I definitely want a Modern Era Cut but I didn’t know I could get a multi-facet arrangement to my liking. What’s the theory behind adding more than 58 facets?

Buddy: Oh sir, it’s not a theory, but a proven fact! The more facets, the more brilliance.

Ralph: So a 144 faceted diamond has more brilliance than a 58 faceted diamond?

Buddy: You betcha!

Ralph: Well if that’s true, why would anyone buy less than 144 facets?

Buddy: Personal taste. Some people just can’t handle too much brilliance so they pick the facet number that suits them best. Like picking out what wattage you want your bulb for a lamp.

Ralph: Do these multi-faceted diamonds cost more?

Buddy: Oh yes sir! They are very labor intensive and only the finest rough (what diamonds look like before they are cut) is chosen.

Ralph: So how do I refer to these diamonds?

Buddy: Well Ralph, they all have their own names. For example, The Zoe Diamond has 100 facets and was invented by Gabi Tolkowsky, the nephew to Marcel Tolkowsky who invented The American Ideal. There’s also the Leo Cut from Leo Schachter that has 66 facets for just a little extra zing! Try to think of these multi-faceted rounds as “High Definition Diamonds”. You’ll get a clearer, sharper, more brilliant picture.

Ralph: How many types of these “High Definition Diamonds” are out there?

Buddy: Tons, practically, a new one hits the market every day! Let me tell you about…

Ralph: No, that’s okay, I’ll get back with you, I’ve got a headache.

(Fade to Black)

The Facts:

1.) The job of a facet with the exception of the table facet is like that of a prism, to break light after the color spectrum, not increase its magnitude or intensity. Extra faceted diamonds cannot, I repeat, cannot increase the brilliance or white light return to your eye.

2.) All of these “High Definition Diamonds” are trademarked or branded; leaving only a few distributors able to sell them through contract with the cutting company. (Translation: Big cost, no secondary market value due to poor distribution.)

3.) High Definition Diamonds are not bondable as of the publication of this article, leaving you with no guarantees.

4.) High Definition Diamonds may be a fact (they do exist) but they are just slick marketing campaigns designed to get a bigger piece of an already shrinking diamond pie.

So what’s the final word on these “High Definition Diamonds”? Leave them alone. The only thing high on these diamonds is their price and their definition is incomplete.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Ice in Ice

One thousand miles north of the U.S border in Lac de Gras, Canada a remarkable thing has been going on since 1998. They are mining diamonds, and I’m not just talking onesies and twosies but bucket fulls! On any given day, Ekati (first ever Canadian diamond mine) will sift 10,000 tons of Kimberlite (a rock formation in which diamonds are formed) to obtain a sack of 10,000 carats of diamonds (about 4 pounds) valued in excess of one million dollars. What’s even more amazing is where they find these diamonds. They are buried in ice two-thirds of a mile down chilled to a very uncomfortable 70° below zero. At a cost of 600 million dollars BHP Diamond Corporation (Broken Hill Proprietary, an Australian outfit) broke ground with a team of 500 people who live and work on the frozen tundra working in shifts (two weeks on and two weeks off) 365 days of the year including Christmas. To give you some idea how big a diamond find this is, let’s put it into perspective. Every year 30 billion dollars worth of diamonds are mined worldwide. That’s every mine from every country in the whole world to get to that 30 billion. This one little mine is currently producing 3 million carats a year at a value of a billion dollars. So what, you say? Here’s what, only one company is on line right now but there are 260 companies that have staked claims on 100,000 square miles (larger than Texas). They’ve found 136 Kimberlite pipes with five already having enough diamonds to mine. Think about it; if there’s only one mine in production (Ekati Diamond Mine); one main Kimberlite pipe being used (named Panda, how cute); imagine what will happen when the other mines come on-line! Next year, Diavik Diamond Mines Inc. will be in production and at their peak they will be able to produce six million carats a year (twice that of Ekati)! With most of these mines’ life expectancy being 20 years, that’s over 6 billion dollars worth of diamonds to be produced from each single location. Before this decade is out, 12% of the world’s diamonds will be coming from Canada.

What it means to you

Nothing! The Canadians, as well as all the foreigners they are letting mine, don’t want to see the price of diamonds fall. It’s not in their best interest. They are going to do what’s been done for the last hundred years; allow certain amount to the market and hoard the rest for future consumption. What’s the point then? You can rest assured that your great, great, great, great grand children will have diamonds to wear when it comes time for them to go diamond shopping.

Diamonds will never become extinct.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.”
More questions? Ask the Diamond Guy®

Fall of the Tablet of Truth

Once upon a time, a long time ago, in a land far away lived the house of GIA. In this house were the most respected and honorable knights. Every day they went into battle to uphold honor, credibility and the search for the tablet of truth. Many would come from far away lands to the house that GIA built and ask but one question, “Does my rock of honor speak the truth?” “For if my rock is a mere pebble then I shall send it back from where it hath come and choose another. All were happy in the land of Debeerios until another family built another house that said their knights could find the truth as well.

Soon there were many houses. The house of IGI, the house of EGL, the house of AGS, the house of HRD and others, all proclaiming that their knights could foretell the truth of the stones of destiny better than the other. The land of Debeerios was in a state of confusion. Does truth have many faces and if so which face tells no lies. All the country’s men and women were lost.

Then, one day a great man rode into Debeerios on a white stallion. His name, King Bonding. Every where he went the villagers would follow. He went to every house and spoke with every knight and when he was done he made a proclamation. “There are some knights in all houses that do not speak the truth or hold their tongues and speak partial truths. To bring honor back to the stones of destiny, I will bless only the mightiest of stones. These stones of destiny that have been blessed by King Bonding will forever be known as “The Bonded Stones of Destiny!” These stones can tell no lies for their value can never be disputed!” The land of Debeerios rang with happiness and joy for truth had been restored. No longer could the knights of the houses distort the truth for their own selfish reasons because if they did they would never pass the final battle with King Bonding.

The End

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Fine Print

Are You Really Getting What You’re Getting?

They say that the devil is in the details. If they are referring to the fine print found in contracts, grading reports, catalogs and bills of sale, they are right. Recently, ABC News did a week long special on how consumers are literally signing away their rights when they acquire a new product. Look at the fine print in the stack of papers you sign when you buy a new car; or a catalog you receive in the mail. Fine print is everywhere! TV commercials that last 60 seconds give us one second to read the tiny print at the bottom of the screen. Lifetime warranties may have an expiration date (it’s in the fine print). Many of us don’t read the fine print and if we do read the teeny weenie sentences, they don’t necessarily make any sense to a layman. They are written with such legalese that even a lawyer could not pin down the meaning.

In sum, people buying products are not getting what they think they’re getting. When they eventually figure out they’ve been bamboozled, there isn’t anything they can do about it. You didn’t send in the registration card so there is no warranty, or if you did they have no record of it, or there is a catch-all phrase that leaves them hold harmless and you holding the bag.

The following 13 fine print sentences are the most prevalent and destructive to your rights as a consumer in the world of jewelry, lab reports and jewelry insurance. If any item you contemplate buying is saddled with one or more of these fine print “viruses”, then the potential purchase and subsequent enjoyment of that purchase will likely be compromised.

VIRUSES

1. “Original prices may not have resulted in actual sales.”

This one kills me! You almost have to read it a few times to understand what they are actually saying. This fine print statement shows up in many consolidators’ websites and in brick-and-mortar store catalogs. It means the price listed as the original price is bogus! Nobody on this planet or any other one ever paid sticker! The price exists to give you a sense of savings when you compare the “sale” price to the “original” price. This is how stores run those fake 50-75% off sales and still make a nice profit. Anytime someone says you are getting a sale price, ask them to put in writing the fact that someone in this universe actually paid the original price. If they won’t, the asking price is the real price; there isn’t a real sale going on and you need to take your business elsewhere.

2 and 3. “Diamond carat weights (ct) represent the approximate total weight of all the diamonds in the setting and MAY vary no more than .07 below the stated weights.” Or “All total carat weights are approximate.”

While the law (Federal Trade Commission) says that any diamond piece of jewelry sold has to weigh within .005 ct of its actual weight, there is an exception. The exception is when stated otherwise. Translation: Any jeweler can tell you a diamond weighs any amount regardless of whether it weighs that amount if and only if this fine print virus is posted on their website, in their catalog or in any paperwork they give you! If you see it or ask if the weights they sell are approximate and they reply affirmatively– RUN!

4. The genuine gemstones in this catalog may have been treated or enhanced by heating.”

This one is sneaky! Usually this paragraph is followed by “Generally, diffusion (sapphires), oiling or waxing (emeralds and opals), irradiation (blue topaz), or surface enhanced (mystic or twilight topaz).” The key here is GENERALLY. By using “generally” it means they can treat their diamonds with no further acknowledgement than this statement. Translation: You could spend thousands of dollars on a diamond that has actually been baked and is brittle! If you’re after quality, stay away from any jeweler that alters their gemstones and hides the fact in the fine print!

5, 6, 7 and 8. “This report is not a guarantee, valuation or appraisal and ______has

made no representation or warranty regarding this report, the article(s) described herein or any inscription described in this report.” Or

“_____Lab and its employees and agents shall not be liable for any loss, damage or expense for any error in or omission from this document or for its issuance or use even if caused by or resulting from the negligence or other fault of _____Lab and its employees.” Or

“The client declared and accepts that a certificate, drawn up in accordance with the scientific methods applied by _____, cannot as such be disputed before _____, and _____, its appointees or _____ are on no account responsible for possible dissimilarities and/or differences that could appear from repeated examinations or as a result of other methods applied.” Or

“All clarity characteristics may not be shown.”

These fine print viruses were all taken directly from lab grading reports. Lab names have been deleted to protect the guilty. The purpose of a lab grading report is to offer declarative objective information that the purchaser can rely on in order to make an informed decision. As consumers, we’re looking for guarantees. If we are told it’s “X”, it should be “X”. We shouldn’t be told it’s “X” and then in the fine print find out it might be “X” and if it’s not, the vendor cannot be held liable. Any lab report that has these slimy small print viruses should be disregarded as nothing more than propaganda. Any lab report whose opening sentence is “This report is not a guarantee, valuation or appraisal,” is as useful as a college degree purchased on the internet. A lab unwilling to stake their reputation on what they say in their document serves no purpose. This is why the guild stores like Tiffany, Cartier and Harry Winston are all using internal labs where the grading can be quadruple checked in order to guarantee your purchase. If the labs don’t clean up their act and lay down some hard and fast guarantees with their reports, the steroid baseball scandal will seem minor in comparison when tens of thousands of clients realize their diamond doesn’t really match the report and their rock is worth less than 20% of what they paid.

9. “Diamond grades may vary”

I saw this little ditty in many department store (jewelry department) catalogs and mall jeweler catalogs. “Diamond grades” can refer to the clarity, color and class of cut, so this little number can create a pandemic of problems! This statement literally allows the vendor to call the diamond any type of quality they want! “Vary” is so subjective that the deceptive jeweler could argue that “vary” means any number of grades off in any direction. Very simple solution here—tell the jeweler to put in writing that they guarantee every single characteristic they are telling you about or giving you in a lab grading report and if it is disputed by any accredited appraiser that you can get your money back or a replacement—no questions asked! If they blush or hem and haw, get walkin’!

10. “Some styles may contain single cut diamonds.”

Single cut diamonds only have 16-17 facets (these are usually small diamonds) instead of the standard 58. Little diamonds that don’t have enough facets flatten out and fog out very quickly when they get a little bit dirty. No brand new ring should come with single cut diamonds. If sparkle is important to you in your rocks, avoid these.

11. “Gemstone products are often treated to enhance their beauty. Some treatments may not be permanent and require special care.”

This one is horrendous! They are saying that anything under the sun might have been done to your rock (baking, laser drilling, bleaching, etc.) and any side-effects are not their responsibility! Not only that, they are stating their “enhancements” might not be permanent (the rock could fall apart) if you aren’t careful. Any diamond, I repeat, any diamond that may have been treated needs to be avoided! Period.

12. “Photos may be enlarged and/or enhanced.”

OK, I get the enlarged part, so I can see what I’m buying better. But the enhanced part crosses the line! The whole point of enlarging is to see the fine detail. If the true detail has been altered to look better, then how do I know what I’m getting? Look, if I’m in a chat room and someone emails me a picture of Christy Brinkley (supermodel) and tells me it’s them, aren’t I going to be a little disappointed when I meet them in person?

13. “If the merchandise is lost, stolen or damaged, it will be replaced with ‘like’ merchandise or what it costs us to replace it.”

This is known in the industry as the “Like Clause.” Mid-cap insurance companies place it in the fine print so they don’t have to match exactly what you originally had. With some insurance companies “like” means within one clarity grade, one color grade, ten points of carat weight and no provisions for class of cut, treatment or fluorescence. Your half million dollar home burned down and they want to give you a tent to live in, arguing that it is “like” merchandise because it also provides shelter! Any insurance policy with “the like clause” is practically worthless. Premium policies from Lloyds of London or Chubb do not have “like” clauses.

Knowledge is power. Now that you are aware of these fine print viruses they’ll be easier to find and recognize.

Related Video: Baked Diamonds, Shattered Dreams

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Chapter Twenty-Two: The Great Overhang

Part 3 of the 3 part series, “Diamonds Are Not Forever”

Except for those few stones that have been permanently lost, every diamond that has been found and cut into a gem since the beginning of time still exists today. This historic inventory, which overhangs the market, is literally in the public’s hands. Some hundred million women wear diamonds on their person, while millions of others keep them in safe deposit boxes or strong boxes as family heirlooms. It is conservatively estimated that the public holds more than five hundred million carats of gem diamonds in this above-the ground inventory, which is more than fifty times the number of gem diamonds produced by the diamond cartel in any given year. Since the quantity of diamonds needed for engagement rings and other jewelry each year is satisfied by the production from the world’s mines, this prodigious half billion carat overhang of diamonds must be prevented from ever being put on the market. The moment a significant portion of the public began selling diamonds from this inventory, the price of diamonds could not be sustained. For the diamond invention to survive, the public must be psychologically inhibited from ever parting with their diamonds.

In developing a strategy for De Beers in 1953, N. W. Ayer noted: “Diamonds do not wear out and are nor consumed. New diamonds add to the existing supply in trade channels and in the possession of the public. In our opinion old diamonds are in ‘safe hands’ only when widely dispersed and held by individuals as cherished possessions valued far above their market price.” The advertising agency’s basic assignment was to make women value diamonds as permanent possessions, not for their actually worth on the market. It set out to accomplish this task by attempting through subtly designed advertisements to foster a sentimental attachment to diamonds which would make it difficult for a woman to give them up. Women were induced to think of their diamonds as their “best friends.” As far as De Beers and N. W. Ayer were concerned, “safe hands” belonged to those women psychologically conditioned never to sell their diamonds.

This conditioning could not be attained solely by placing advertisements in magazines. The diamond-holding public, which included individuals who inherit diamonds, had to remain convinced that diamonds retained their monetary value. If they saw price fluctuations in the diamond market and attempted to dispose of them to take advantage of these changing prices, the retail market would become chaotic. It was therefore essential that at least the illusion of price stability be maintained.

The extremely delicate positioning of the “overhang” provides one of the main rationalizations for the cartel arrangement. Harry Oppenheimer explained the unique situation of diamonds in the following terms: “A degree of control is necessary for the well being of the industry, not because production is excessive or demand is falling, but simply because wide fluctuations in price, which have, rightly or wrongly, been accepted as normal in the case of most raw materials, would be destructive of public confidence in the case of a pure luxury such as gem diamonds, of which large stocks are held in the form of jewelry by the general public.” During the periods when the production from the mines temporarily exceeds the consumption of diamonds, which is determined mainly by the number of impending marriages in the United States and Japan, the cartel can preserve the vital illusion of price stability by either cutting back the distribution of diamonds at its London sights or by itself buying back diamonds at the wholesale level. The underlying assumption is that as long as the general public never sees the price of diamonds fall, they will not become nervous and begin selling the hundreds of millions of carats worth of diamonds that they hold from prior production. If this overhang ever reached the market, even De Beers and all the Oppenheimer resources could not prevent the price of diamonds from plummeting.

Before the advent of the twentieth century and the mass marketing of diamonds, the “overhang,” though it existed, was far less of an imminent danger. Diamonds were then considered to be the almost exclusive possession of the aristocrats and wealthy elite, who were not expected to precipitously sell their jewels-except under the direst circumstances. In times of revolution, however, this stock did threaten to come cascading onto the market. When the Czar of Russia was deposed in 1917, the Bolsheviks announced that they were selling the mass of diamonds that his family had accumulated over the centuries. The fear that this stockpile of diamonds would come onto the market depressed world diamond prices for over a year. Then Solly Joel, the nephew and heir of Barney Barnato, who controlled the diamond syndicate in London, offered the Bolsheviks one quarter million pounds for the entire hoard sight unseen. The Bolsheviks, desperately in need of cash to finance their revolution, accepted the offer, and delivered the diamonds in fourteen cigar boxes to London. Joel then assured the other diamond merchants that he would keep these diamonds off the market for years, and panic subsided.

With the bulk of the diamonds in the hands of the general public, the problem of the overhang became much more difficult to handle. When the demand for diamonds almost completely abated after the crash of 1929, De Beers shut down the supply of diamonds by closing its mines and buying the production of independent mines for its stockpile in London. It could not, however, prevent diamonds from the overhang seeping into the market. Prices for small gems fell to $5 a carat. De Beers, already heavily in debt, continued through the 1930s to borrow money to buy back as many of these diamonds as it could absorb. But despite all these efforts, enough of the overhang came onto the market to make it impossible for jewelers to buy back diamonds. Public confidence in diamonds as a store of value was nearly destroyed, especially in Europe, and it required more than a generation before diamonds were again to reach their 1929 price level.

In the 1960s, the overhang again threatened to pour onto the market when the Soviet Union began to sell its polished diamonds. De Beers and its allies now no longer controlled the diamond supply. De Beers realized that open competition with the Russians would inevitably lead to “price fluctuations,” as Harry Oppenheimer gingerly put it. This, in turn, would undoubtedly weaken the public’s carefully cultivated confidence in the value of diamonds. Since Oppenheimer assumed that neither party could afford risking the destruction of the diamond invention, he offered the Soviets a straightforward deal: “a single channel” for controlling the world supply of diamonds. In accepting this arrangement, the Russians became partners in the cartel, and co- protectors of the diamond invention. De Beers then devised the “eternity ring,” made up of hundreds of tiny Soviet-sized diamonds, which could be sold to an entirely new market of married women. The advertising campaign designed by N. W. Ayer was based on the theme of recaptured love. Again, sentiments were born out of necessity: American wives received a snake-like ring of miniature diamonds because of the needs of a South African corporation to accommodate the Communist Russia.

As the flow of Soviet diamonds continued into London at an ever-increasing rate, De Beers strategists came to the conclusion that this production could not be entirely absorbed by “eternity rings” or other new concepts in jewelry. They began looking for diamond markets for miniature diamonds outside the confines of the United States. Even though they succeeded beyond their wildest expectation in creating an instant diamond “tradition” in Japan, they were unable to create similar traditions in Brazil, Germany, Austria or Italy. Despite the cost involved in absorbing this hoard of Soviet diamonds each year, De Beers prevented, at least temporarily, the Soviet Union from taking any precipitous actions that might cause the diamond overhang to start sliding down onto the market.

Another threat came in 1977. Sir Philip Oppenheimer and other De Beers executives became concerned about the buildup of Israeli stockpiles of uncut diamonds in Tel Aviv. Most of these diamonds had been pledged as collateral for loans with which the dealers bought still more diamonds. The Israeli banks, who had lent nearly one-third of all of Israel’s foreign exchange on the diamonds, began asking the dealers to repay the loans. To do this, however, dealers would have to sell their diamonds, which could cause an abrupt drop in the price. And if the price began dropping, the banks themselves might be forced to liquidate the remaining stockpiles of diamonds, causing the sort of panic in the diamond market that could conceivably unsettle the overhang.

After establishing liaisons with the Israeli banks, De Beers executives worked out what one of its chief brokers termed “a billion dollar squeeze play.” First, De Beers reduced the number of diamonds provided to the Israeli dealers at the London sights. Then, through a special surcharge, De Beers actually increased the price the dealers had to pay. To get the cash for these diamonds, the latter were forced to reduce their inventories. Meanwhile, De Beers’ publicity department churned out a series of press releases about new surcharges and rising prices that distracted attention from the fluctuation in wholesale prices. Before the year ended, according to Jewelers’ Circular Keystone, about 350 Israeli dealers, unable to repay their loans, were forced into bankruptcy. The wholesale price, cushioned by De Beers’ buying the Israeli operations, wavered but did not collapse. By 1979, stockpile had been successfully dispersed.

The most serious threat to the stability of the diamond overhang came in the 1980s from the sale of “investment” diamonds to speculators in the United States. De Beers had methodically nurtured the idea in America that diamonds were not subject to the vagaries of price that affected other consumer luxuries. To maintain this illusion in the public’s mind, De Beers made it a si . ne qua non condition of its marketing strategy that retail prices should never fall. Price competition between major retailers of diamonds was prohibited by the rules of the game prices. Jewelers’ Circular Keystone, which interviewed dozens of leading retailers in 1979, explained:

“If the giant retailers ever declared a predatory price war on ‘mom and pop’ competitors and each other, they could destroy the image of diamonds as a commodity that always appreciates in value. . . . So a tacit unwritten agreement with De Beers forbids such privileged retailers from engaging in predatory price wars.” Under this system, nationwide Jewelry chains, though they get their diamonds either directly from De Beers or a De Beers sight-holder at a lower price, do not attempt to undercut the small jewelry shop (which acquires its diamonds on consignments at much higher prices). What varies is the profit and markup, not the retail price. As long as individuals do not attempt to resell their diamonds and thereby discover the enormous difference in markups, or “keystones,” as they are called in the trade, it is possible to retain the appearance of stable and gradually increasing prices.

The situation radically changed when the more unsavory sales organizations began selling millions of carats of ” investment” diamonds to men who had no sentimental attachment to the diamonds themselves and acquired them solely for the purpose of reselling them at a higher price. They were not even mounted as jewelry. By 1980, it was estimated that American investors had paid more than a billion dollars for these diamonds. Moreover, many of the companies that had sold the diamonds with the guarantee of a “buy-back” at a fixed price had either gone bankrupt or simply closed their offices and disappeared.

The diamond cartel managed had to absorb or get control over these private stockpiles to prevent them from cascading onto the market and unhinge the entire overhang. If they had not, the illusion would shatter. As one dealer explained, “Investment diamonds are bought for $30,000 a carat, not because any women want to wear them on their fingers, but because the investor believes they will be worth $50,000 a carat. He may borrow heavily to finance his investment. When the price begins to decline, everyone will try to sell their diamonds at once. In the end, of course, there will be no buyers for diamonds at $30,000. At this point, there will be a stampede to sell investment diamonds, and the newspapers will begin writing stories about the great diamond crash.” When women read about a diamond crash, some might attempt to see their own, but find few buyers. At that point, people will realize that diamonds are not forever.

Whether this pessimistic scenario ever unfolds remains to be seen. De Beers has billions of dollars of its cash reserves to buy back diamonds,. Nevertheless, with new diamond mines in Australia and Canada coming on stream, the time is past when De Beers can manipulate prices merely through the expedient of shutting down mines.

The diamond invention is neither eternal nor self-perpetuating. It survived for the past half century because two critical conditions were satisfied: the production of diamonds from the world’s mines was kept in balance with world consumption; and the public refrained from attempting to sell its inventory back onto the market. De Beers satisfied the first of these conditions by owning and controlling the major sources of diamonds and the second of these conditions by fostering the illusion in the public’s mind that diamonds are forever. Both achievements may prove to be temporary phenomena. The diamond craze of the twentieth century could end as abruptly as the tulip mania of the eighteenth century. Under these circumstances, the diamond invention will disintegrate and be remembered only as a historical curiosity, as brilliant in its way as the glittering, brittle, little stones it once made so valuable.

by Edward Jay Epstein

Caveat Emptor

Part 2 of the 3 part series, “Diamonds Are Not Forever”

In 1977, in Los Angeles, a film producer, who had just closed his account with his stockbroker, received an unexpected call from a stranger with a distinct English accent. The caller, identifying himself as a representative of “De Beers Diamond Investments, Ltd.,” began by commending the producer on his acumen in withdrawing from the stock market. “You obviously are aware of the fact that stocks and bonds can’t keep pace with inflation,” he continued in a soft voice, “but have you considered diamonds as an alternative?” He explained that diamonds had appreciated “700 percent over the last ten years,” and that they were the “most prudent investment available, since the supply is tightly controlled by a private monopoly.” Without further ado, the caller offered to sell the film producer a selection of “investment diamonds” for $5,000.

“But how can I buy diamonds over the phone,” the producer asked incredulously.

“All the diamonds are sealed in plastic with a certificate guaranteeing their quality,” the caller responded. “And of course you have heard of De Beers.” The more hesitant the producer became, the more determined the caller became. “We can register these diamonds under your wife’s name, which might be helpful for your taxes,” the caller went on.

“Think of how surprised she will be when the diamonds arrive … and you are buying them below wholesale.”

The caller, it turned out, was one of dozens of salesmen seated around a bank of telephones in Scottsdale, Arizona. Like the rest of the men in this boiler room, as it was called, he was making a pitch to sell diamonds and had been supplied with a list of names of individuals around the country who had recently closed brokerage accounts. For every order he sold, he received a commission of up 20 percent. Since the prices were in reality far above wholesale prices, the company could afford to pay its salesmen, most of them “telephone pros,” large commissions. And despite the similarity of its name, De Beers Diamond Investments, Ltd., was in no way connected with De Beers Consolidated Mines. Like a host of other recently formed diamond boiler rooms, with names like Diamond Selection, Ltd., Kimberlite Diamond Resource Company, and Tel-Aviv Diamond Investments, Ltd., this firm was formed to promote “investment diamonds.”

When the mail-order diamonds finally arrive at the purchaser’s home, they are sealed in plastic with the certificate guaranteeing their quality. The customer is then advised of what amounts to a catch-22 situation: The quality of the diamond is only guaranteed as long as it remains sealed in plastic; if the customer takes it out of the plastic to have it independently appraised, the certificate is no longer valid. When customers broke the seal, many found diamonds of inferior or even worthless quality. Complaints to the authorities proliferated at such a rate in New York that the attorney general was forced to mobilize a “Diamond Task Force” to process the hundreds of allegations of fraud.

“It is incredible,” William R. Ralkin, the assistant attorney general said in the New York Times in 1979. “These crooks will get outwardly rational people to buy a sealed bag containing supposed gems. . . . And they have the nerve to tell their victims not to unseal the packet for two to three years, after which they promise to buy back the stones it much higher prices.” He added, “It never falls to amaze mc me how . . . professional people like lawyers [and] medical practitioners will send checks for thousands of dollars to people they never met or heard of after being contacted by these boiler room operators.”

Aside from selling tens of thousands of diamonds a month over the telephone, many of these newly created firms hold “diamond investment seminars” in expensive resort hotels. At such events, they present impressive graphs and data, and typically assisted by a few well-rehearsed shills in the audience, they proceed to sell sealed packets of diamonds to the audience. (Not uncommonly, in dealing with elderly investors, diamond salesmen play on the fear that their relatives might try to seize their cash assets and have them committed to nursing homes. They suggest that the investors can stymie such attempts by putting their money in diamonds and hiding them.

Some of these entrepreneurs were relative newcomers to the diamond business. Rayburne Martin, who went from De Beers Diamond Investments, Ltd., to Tel-Aviv Diamond Investments, Ltd., both domiciled in Scottsdale, Arizona, had a record of embezzlement and security law violations in Arkansas and was a fugitive from justice during most of his tenure in the diamond trade. Harold S. McClintock, also known as Harold Sager, had been convicted of stock fraud in Chicago, and he had been involved in a silver bullion caper in 1974 before he helped organize De Beers Diamond Investments, Ltd. Don Jay Shure, who arranged to set up another De Beers Diamond Investments, Ltd., in Irvine, California, had also formerly been convicted of fraud. Bernhard Dohrmann, the “marketing director” of the International Diamond Corporation, had served time in jail for security fraud in 1976. Donald Nixon, the nephew of President Richard M. Nixon, and Robert L. Vesco, the fugitive financier, were, according to the New York State attorney general, allegedly participating in a high-pressure telephone campaign to sell “over-valued or worthless diamonds” by employing “a battery of silken-voiced radio and television announcers.” Among the diamond salesmen were also a wide array of former commodity and stock brokers who specialized in attempting to sell sealed diamonds to pension funds and retirement plans.

Meanwhile, in London, the real De Beers, unable to stifle all the bogus entrepreneurs in Arizona and California using its name, decided to explore the potential market for investment gems. It announced in March of 1978 a highly unusual sort of “diamond fellowship” for selected retail jewelers. Each jeweler who participated would pay a $2,000 fellowship fee. In return, he would receive a set of certificates for investment-grade diamonds, contractual forms for “buyback” guarantees, promotion material, and training in how to sell these unmounted diamonds to an entirely new category of customers. The target was defined by De Beers as “men aged 55 and over with inherited or self-made wealth to spend.” Rather than sell fine jewels, as they were accustomed to, these selected retailers would sell loose stones with a certificate for $4,000 to $6,000.

De Beers’ modest move into the investment diamond business caused a tremor of concern in the trade. De Beers had strongly opposed retailers selling “investment” diamonds on the grounds that because there was no sentimental attachment to such diamonds customers would eventually attempt to resell them and thereby cause sharp price fluctuations. Indeed, De Beers executives expressed concern that retailers would not be able to cope with the thousands of distressed investors who tried to resell their loose diamonds back to them. In response to this new “diamond fellowship” scheme, the authoritative trade journal, jewelers’ Circular Keystone, observed: “Besides giving De Beers an unusually direct role in retail diamond sales, the program marks a softening of its previous hard-line stand against gem investing. Eric Bruton, the publisher of Retail Jeweler in London, added, “De Beers is standing on the edge of a very slippery slope…. They say it is unwise to sell diamonds directly as an investment, then [they] go ahead with this diamond investment scheme.”

If De Beers had changed its policy toward investment diamonds, it was not because it wanted to encourage the speculative fever that was sweeping America and Europe. Its marketing executives in London realized that speculators could panic at any moment, and by precipitously flooding the market with diamonds they had hoarded, burst the price structure for diamonds. They had, however, “little choice but to get involved,” as one De Beers executive explained. Even though the “De Beers Diamond Investments” in Arizona, which had pioneered in selling diamonds over the telephone, had gone bankrupt, ‘ more than 200 firms had by then entered the business of selling sealed packets of diamonds to the American public over the phone. And aside from these proliferating boiler rooms, many established diamond dealers rushed into the field to sell diamonds to financial institutions, pension plans and serious investors. It soon became apparent in the Diamond Exchange in New York that selling unmounted diamonds to investors was far more profitable than selling them to jewelry shops. By early 1980, David Birnbaum, a leading dealers in New York, estimated that in terms of dollar value, nearly one third of all diamond sales in the United States were for investment diamonds. “Only five years earlier, investment diamonds were only an insignificant part of the business,” he added.

Even if De Beers did not approve of this new market in diamonds, it could hardly ignore one-third of the American diamond trade. It had to take some action.

Mass-marketed investment diamonds was made possible in the 1970s by the invention of the diamond certificate. Diamonds themselves cannot be valued by any single measure, such as weight, and the factors involved in such an assessment-clarity, color, and cut-cannot be made by an individual investor or financial institution. Moreover, since diamonds are not fungible in the sense that one diamond can be exchanged for another diamond of the same weight, some means had to be found of standardizing the quality of diamonds. Certificates, which guaranteed the color, clarity and cut of individual diamonds, provided this medium.

The Gemological Institute of America, a privately owned company established to service jewelers, developed a convenient system for certifying the quality of diamonds. For ascertaining the “cut” of the diamond, the Gemological Institute devised in 1967 a “proportion scope.” This contraption casts a magnified shadow of the stone in question over a diagram that represents the ideal proportions for a diamond of that size. By comparing the overlap between the image of the diamond and the diagram, the deviation from the ideal can be easily measured-and recorded on the certificate. For determining the “clarity” of the diamond, the Gemological Institute developed a “Gemolite” microscope, which has an attachment for rotating a diamond under ten power magnification against a dark background. If no blemishes can be seen in the diamond under this magnification, it is graded “flawless”; if there are blemishes, but they are very difficult to find with this lens, it is graded “VVS,” and with imperfections visible at lower magnifications, it is further downgraded. Finally, to establish the exact color of the diamond, the Gemological Institute introduced the “Diamondlite”: a boxlike machine with a window in it which allows a diamond to be compared with a set of sample stones that span all the color gradations from pure white to yellow. The purest white on this scale is classified as “D”; the next grade of white is classified as “E.” Gradually, by grade “l,” the white is tinted with yellow; and by grade K,” the color is considered to be yellow and of much lower value.

By 1978, diamonds were being routinely certified through these methods, not only by the Gemological Institute of America, but also by other Gemological laboratories in Antwerp, Paris, London and Los Angeles. Since dealers needed certificates for selling investment diamonds, and customers were usually willing to pay a hefty premium for such a document attached to the diamond, the laboratories found it difficult to keep up with the demand. Long lines of diamond dealers usually formed in front of the laboratories, and in many cases, stand-ins were hired to wait in line for impatient dealers.

The certification mechanism, despite all the Rube Goldberg sorts of inventions employed, did not entirely remove the subjective element from diamond evaluation. Not uncommonly, dealers would resubmit the same diamond to the Gemological Institute and receive a different rating for it. It did, however, facilitate the trading of rare diamonds. A diamond certified as D, flawless, was an extreme rarity, and since very few such stones existed, or would ever be extracted from mines, they could be bought and sold on the basis that they were in short supply. The price of these near-perfect diamonds rose from $4,000 a carat in 1967 to $22,000 to $50,000 in 1980. Even though such extravagant prices for D, flawless, diamonds are frequently cited by the press in stories about the appreciation of diamonds, they are atypical of diamond prices. In all the world, there are probably less than one hundred diamonds mined that can be cut into one carat, D, flawless, stones, and only a small proportion of these ever are certified and sold to investors. Moreover, very few diamonds are ever sold for the prices reported in the news stories. “No dealer I know has ever sold a one-carat investment diamond for $50,000,” a New York dealer commented.

The high prices quoted for the few available D, flawless, stones do not necessarily hold for diamonds of an even slightly inferior grade. For example, in 1978, when D, flawless, diamonds were quoted at $22,000 a carat, an H grade white diamond, without any visible imperfections, was valued at only $2,750- Once mounted in a ring or piece of jewelry, it would be extremely difficult for the untrained eye to differentiate between a D and H color (especially since the setting reflects through the diamond). But while this subtle difference makes little difference in the sale of jewelry, it creates nearly 90 percent of the value in an investment diamond. For what is measured by this grading system is not beauty, but the comparative rarity of a given class of diamonds.

Most investors have no choice but to rely on the piece of paper that comes attached to the diamond to specify the grade, and hence the value, of their investment. Not all the certificates, however, emanate from the Gemological Ins Institute of America. Many certificates have been issued by less reputable-or even nonexistent-laboratories, and the diamonds might be of a much lower grade than that certified.

Even if the certificate comes from a bona fide laboratory, its evaluation of the diamond may later be disputed by another assessor. Robert Crowningshield, the New York director of the Gemological Institute, observed, “. . . I’ve never seen two experts agree on the quality of a particular diamond.”

The extent to which the value of diamonds is determined by the eye of the beholder was demonstrated in 1981 by an experiment conducted under the sponsorship of Goldsmith magazine. In this test, four leading diamond evaluators were handed 145 diamonds that had previously been graded by the Gemological Institute of America, the European Gemological Laboratories and the International Gemological Institute. The team of experts was not told how each of the diamonds previously had been graded. After the team had reached its own consensus on the grade of each stone, the results were compared with those of the Gemological institutes. In 92 Out Of 145 cases, the team of evaluators disagreed with the grades previously given on the certificates. Despite all the scientific paraphernalia surrounding the process of certification, diamond grading remained, according to this test, an extraordinarily subjective business.

To make a profit, investors at some point must find buyers who are willing to pay more for their diamonds than they did. Here, however, investors face the same problem as those attempting to sell their jewelry: there is no unified market on which to sell diamonds. Although dealers will quote the prices for which they are willing to sell investment-grade diamonds, they seldom give a set price at which they are willing to buy the same grade diamonds. In 1977, for example, Jewelers’ Circular Keystone polled a large number of retail dealers and found a difference of 100 percent between different offers for the same quality investment grade diamonds. Moreover, even though most investors buy their diamonds at or near retail price, they are forced to sell at wholesale prices. As Forbes magazine pointed out in 1977, “Average investors, unfortunately, have little access to the wholesale market. Ask a jeweler to buy back a stone, and he’ll often begin by quoting a price 30% or more below wholesale.” Since the difference between wholesale and retail tends to be at least 100 percent in investment diamonds, any gain from the appreciation of the diamonds will probably be lost in the act of selling them.

Many New York dealers feared that despite the high pressure telephone techniques, the diamond bubble could suddenly burst. “There’s going to come a day when all those doctors, lawyers and other fools who bought diamonds over the phone take them out of their strong boxes, or wherever, and try to sell them,” one dealer predicted. The principal ingredient in the Diamond boom is expectations that may not be fulfilled.

by Edward Jay Epstein

Most Wanted

The enemy of my enemy is my friend or is it the friend of my enemy is my enemy or there are no friends and just enemies?

I forget….

Anyways if the F.B.I. likes to list the top ten most wanted at the stamp shop, I figured I could do the same here. The following is an official list of DeBeers sight holders with U.S. Offices of U.S. Affiliates/Associates.

P.S. I do not do business with any of them.

2006 Directory of DTC Sightholders:
(Alphabetically A-Z)

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A. Link
444 Madison Avenue
New York, NY 10028
Phone: (212) 838-5355
Fax: (212) 838- 5643
www.alink.com
Contact: Douglas Sills,
dsills@alink.com

A. Schwartz & Sons
3A Jabotinsky Street, Ramat Gan, Israel 52520
Phone: (972) (3) 575-2549
Fax: (972) (3) 575-1392
www.aschwartz.com
Contact: Itai Schwartz,
itai@aschartz.com

Aarohi Diamonds
145 W. 45th Street
New York, NY 10036
Phone: (212) 869-5494
Fax: (212) 869-7861
Contact: Parag Ashar,
parag@ddl-adi.com

Almod Diamonds Ltd.
592 Fifth Avenue, 8th Floor
New York, NY 10036
Phone: (212) 308-3600
Fax: (212) 391-6213
www.almod.com
Contact: Morris Gad,
morris@alomod.com

AMC BVBA
Pelikaanstraat 78
Antwerp, Belgium 2018
Phone: (32) (3) 226-4044
Fax: (32) (3) 232-0544
www.amcdiamonds.be
Contact: David Parnas, david@amcdiamonds.be

American Star LLC.
45 W. 45th Street, Suite 201
New York, NY 10036
Phone: (212) 391-2021
Fax: (212) 391-7444
Contact: Saurabh Shah, saurabh@goldstarjewellery.com

Amit Diamond Jewellery LP.
Dallas, TX
Phone: (972)852-0257
Fax: (972) 852-0734
Contact: Amit Patel, amit@goldstarjewellery.com

Arjav Diamonds
18 Schupstraat, 5th Floor, Bus 18
Antwerp, Belgium 2018
Phone: (32) (3) 233-8090
Fax: (32) (3) 226-1321
www.arjavdiamonds.com
Contact: Anish Mehta, anish@arjavdiamonds.com

Asian Star Co. Ltd.
114C, Mittal Court, Nariman Point
Mumbai, India 400021
Phone: (91) (22) 2364-8450
Fax: (91) (22) 2364-7268
www.asianstarco.com
Contact: Dharmesh Shah,
info@asinstar.com

Astra Diamond Manufactures
54 Bezalel Street, 16th Floor
Ramat Gan, Israel 52521
Phone: (972) (3) 575-9351
Fax: (972) (3) 752-2105
www.astradiamond.com, www.pddltd.com,
www.fancycolors.net
Contact: Netta E’dan, netta@astradiamonds.com

B. Vijaykumar & Co.
Mehta Bhavan, 6th Floor, 311 Charni Road
Mumbai, India 400004
Phone: (91) (22) 2386-3853
Fax: (91) (22) 2388-1959
www.bvijay.com

Banner Diamonds
580 Fifth Avenue, Suite 3100
New York, NY 10036
Phone: (212) 944-0014
Fax: (212) 944-3640
Contact: Divykant Shah, banner@livingstones.com

Banner Trading Company, LLC.
I Rockefeller Plaza
New York, NY 10020
Phone: (800) 262-0047
Fax: (212) 581-4976
Contact: Michael Rottenstein, miker@fabrikant.com

Bhansali & Co.
640-646 Panchratna, M.P. Marg
Mumbai, India 400004
Phone: (91) (22) 2363-2235
Fax: (91) (22) 2363-4293
www.bhansali.biz
Contact: Nirav Bhansali,
info@bhansali.biz

Bhavani Gems
101 Prasad Chambers, M.P. Marg
Opera House, Mumbai, India 400004
Phone: (91) (22) 2367-9521
Fax: (91) (22) 2363-3538
www.bhavanigems.com
Contact: D.K. Dholakia, info@bhavanigems.com

Blue Star
310/312 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 5656-3333
Fax: (91) (22) 2363-0202
www.bluestardiamonds.com
Contact: Arnav Mehta, arnav@bluestardiamonds.com

Bornstein N.V.
Hoveniersstraat 2
Antwerp, Belgium 2018
Phone: (32) (3) 212-1690
Fax: (32) (3) 231-4671
www.bornsteindiamonds.com
Contact: Patrick Bornstain, adi@telenet.be

C.Mahenda Group
612 Prasad Chambers, 6th Floor
Opera House, Mumbai, India 400004
Phone: (91) (22) 2364-2509
Fax: (91) (22) 2363-4251
www.cmahendra.com
Contact: Sandeep Shah, sandeep@cmahendra.com

Chow Sang Sang Jewellery Co. Ltd.
26/F, 9 Wing Hong Street, Cheung Sha Wan
Kowloon, Hong Kong
www.chowsangsang.com

Chow Tai Fook Jewellery Company Ltd.
31/F, New World Tower, 16-18 Queens’ Road, Hong Kong
Phone: (852) 2524-3166
Fax: (852) 2869-1972
www.chowtaifook.com

Ciemme LA Inc., C. Mahendra Jewels
550 S. Hill Street, Suite 895
Los Angeles, Ca 90013
Phone: (213) 534-0505
Fax: (213) 534-0506
Contact: Tejas Doshi, diamonds; Shrikant Parikh, jewelry

Ciemme NY
576 Fifth Avenue, Suite 201
New York, NY 10036
Phone: (877) 398-9666
Fax: (212) 840-5680
Contact: Jigar Shah,
jigar@cmahendra.com

Classic Diamonds
1002 Prasad Chambers
Opera House, Mumbai, India 400004
Phone: (91) (22) 2363-2915
Fax: (91) (22) 2363-3646
www.classicdiamondsindia.com
Contact: Nirav Bhansali, nirav@classicdiamondsindia.com

Clover Corp.
I Rockefeller Plaza
New York, NY 10020
Fax: (212) 246-9817
Contact: Shaun Apgar, shauna@fabrikant.com

Codiam Inc.
1180 Avenue of the Americas, 18th Floor
New York, NY 10020
Phone: (212) 265- 3078
Fax: (212) 246-9817
Contact: www.randdiamond.com

Cygnus Jewelry
15 W. 46th Street, 4th Floor
New York, NY 10036
Phone: (212) 768-1881
Fax: (212) 840-5741
Contact: Hemant Patel,
hemant@cyg

DD Manufacturing N.V. Schupstraat 9-11 Block B Antwerp, Belgium 2018 Phone: (32) (3) 232-3665 Fax: (32) (3) 202-4116 www.ddmanufacturing.com Contact: Meni Boro, meni@ddmfg.net; Eli Ivri, eli@ddmfg.net	D. Navinchandra 211 Prasad Chambers Opera House, Mumbai, India 400004 Phone: (91) 22-5638-3100 Fax: (91) 22-2363-0186 www.dnavin.com Contact: Dilip Mehta, info@dnavin.com	Dali Diamond Co. Hoveniersstraat 51, Suite 1302 Antwerp, Belgium 2018 Phone: (32) (3) 233-7912 Fax: (32) (3) 234-2615 www.dalidiamond.com Contact: Isi Morsel, i.morsel@dalidiamond.com	Dalumi Diamonds 1 Jabotinsky Street, 10th Floor Ramat Gan, Israel 52520 Phone: (972) (3) 755-0000 Fax: (972) (3) 575-1876 www.dalumi.com Contact: Yuval Kemp, yuval@dalumi.com
Daniel K. 555 Madison Avenue New York, NY 10022 Phone: (212) 759-7604 Fax: (212) 759-7606 Contact: Donald Spak, dgspak@comcast.net	De Toledo Diamonds Ltd. Yahalom Building, 1369, 54 Bezalel Street Ramat Gan, Israel 52520 Phone: (972) (3) 575-2670 Fax: (972) (3) 575-0929 www.roughit.net Contact: Tally Lahav, Israel@roughit.net	Diaco 1271 Avenue of the Americas, 47th Floor New York, NY 10020 Phone: (212) 259-0353 Fax: (212) 489-8178 Contact: alia Schwalb, dschwalb@louisglick.com	Diamlink Inc., Diamlink Jewelry, Jewelry Marketing Company 1200 Avenue of Americas, 3rd Floor New York, NY 10036 Phone: (212) 704-0777 Fax: (212) 944-2752 www.jewelrymarketingcompany.com Contact: Nehal Modi, nmodi@diamlink.com
Diamond Direct 145 W. 45th Street New York, NY 10036 Phone: (212) 947-4036 Fax: (212) 564-9012 Contact: Sheryl Silberg, Sheryl@ddl-adi.com	Diamonds by Erickson Beamon 498 Seventh Avenue, 24th Floor New York, NY 10018 Phone: (212) 643-4810 Fax: (212) 971-6066 www.diamondsbyericksonbeamon.com Contact: Monique Erickson, onique@showroomseven.com	Diarough N.V. Hoveniersstraat 30, 11th Floor Antwerp, Belgium 2018 Phone: (32) (3) 234-2424 Fax: (32) (3) 232-3931 www.diarough.com	Digico Holdings Ltd. Hoveniersstraat 30, Box 201 Antwerp, Belgium 2018 Phone: (32) (3) 226-2728 Fax: (32) (3) 226-0023 www.digicogroup.com Contact: info@digicogroup.net
Dimexon Diamonds Ltd. 804 Raheja Chambers, Nariman Point Mumbai, India 400021 Phone: (91) (22) 5636-7777 Fax: (91) (22) 5636-7599 www.dimexon.com Contact: Paras Mehta, para.mehta@dimexon.com	Downey Creations 2265 Executive Drive Indianapolis, IN 46241 Phone: (317) 248-9888 Fax: (317) 244-6823 www.downeycreations.com Contact: Dave Downey	Dynamic Diamond Corp. 580 Fifth Avenue, Suite 501 New York, NY 10036 Phone: (212) 575-8880 Fax: (212)575-2049 www.dynamicdiamond.com Contact: Jodi Moss, jmoss@dynamicdiamond.com	Dynamic Design Group Inc. 1212 Avenue of the Americas, 11th Floor New York, NY 10036 Phone: (800) 347-9999 Fax: (212) 840-7737 Contact: Amit Sanghavi, amit@ddg-ny.com

E.F.D. Ltd.
Maccabi Bldg., 22nd Floof, Suite 2238
PO Box 3128
Ramat Gan, Israel 52520
Phone: (972) (3) 575-3388
Fax: (972) (3) 575-0210
www.efd.com

Eloquence Corp.
35 W. 45th Street, New York, NY 10036
Phone: (800) 223-7390
Fax: (212) 302-5269

EMA Rama Inc.
15 W. 47th Street, Suite 705
New York, NY 10036
Phone: (800) 255-7262
Fax: (212) 827-0637
Contact: Naftali Ratzerdorfer, naftalir@emarama.com

Emby International
592 Fifth Avenue, 11th Floor
New York, NY 10036
Phone: (800) USA-EMBY
fax: (212) 282-1110
Contact: Manish Patel, manish@embyintl.com

EMA Diamond Manufacturing Ltd.
54 Bezalel Street, Suite 2074
Ramat Gan, Israel 52520
www.ema-rama.com
Contact: Jeremy Glass,
jglass@ema-diamonds.com

Eternal Collections
20 E. 46th Street, Suite 900
New York, NY 10017
Phone: (212) 719-9748
Fax: (212) 922-9154
Contact: Sanjay Javeri, prismdiamond@yahoo.com

Eurostar Diamonds International
Hoveniersstraat 53, 8th Floor
Antwerp, Belgium 2018
Phone: (32) (3) 213-7777
Fax: (32) (3) 213-7799
www.eurostardiamond.com
Contact: Kaushik Mehta, info@eurostardiamond.com

Fabrikant Tolkowsky Kunstler
1 Rockefeller Plaza
New York, NY 10020
Phone: (212) 719-4562
Fax: (212) 765-2586
Contact: Robert Cornfield,
robc@fabrikant.com

Fabrikant-Tara International
1 Rockefeller Plaza
New York, NY 10020
Phone: (212) 757 0790
Fax: (212) 765-2586
Contact: Robert Cornfield,
robc@fabrikant.com

Fanci Source Inc.
576 Fifth Avenue, Suite 705
New York, NY 10036
Phone: (212) 719-4562
Fax: (212) 719-4773
Contact: Dushyant Choudhry,
dchoudhry@hotmail.com

Fancy Trading Company, LLC.
1 Rockefeller Plaza
New York, NY 10020
Phone: (800) 262-0047
Fax: (212) 581-4976
Contact: Rob Vance,
robv@fabrikant.com

Fine Diamonds LLC.
555 Fifth Avenue, 6th Floor
New York, NY 10017
Phone: (212) 949-0858
Fax: (212) 949-0821
Contact: Doran Meents, dmeents@finediamonds-usa.com

Festdiam Cutting Works
225 Main Street, Suite 308
Johannesburg, South Africa 2000
Phone: (27) (11) 334-0024
Fax: (27) (11) 334-5851
www.sagems.com,
www.southafricandiamonds.com, www.howardengleinc.com
Contact: Jeffrey Meents,
jeff@festdiam.co.za

Fruchter Gad Diamonds
Suite 1542, Maccabi Building,
1 Jabotinsky Street
Ramat Gan, Israel 52520
Phone: (972) (3) 751-5630
Fax: (972) (3) 575-0935
www.fruchtergad.com
Contact: Raphael Rom,
romr@fruchtergad.com

Geffen’s Cutting Works
216 Fox Street
Johannesburg, South Africa 2001
Phone: (27) (11) 334-7220
Fax: (27) (11) 334-0596
Contact: Cecil Kramer,
cecil@onwe.co.za

Gembel Group
Vestingstraat 74, Floor 2
Antwerp, Belgium 2018
Phone: (32) (3) 231-4815
Fax: (32) (3) 227-4574
www.geskay.com
Contact: Chetan Mehta,
chetan@geskay.com

Gemglow Inc.
579 Fifth Avenue, Suite 1080
New York, NY 10017
Phone: (212) 829-0868
Fax: (212) 829-0848
www.gemglow.com
Contact: Ritesh Lakhi,
rlakhi@gemglow.com

Graff USA
589 Fifth Avenue, Suite 812
New York, NY 10017
Phone: (212) 588-8735
Fax: (212) 588-1649

HRA USA Ltd.
888 Brannan Street, Suite 4140
San Francisco, CA 94103
Phone: (415) 255-1495
Fax: (415) 255-1496
Contact: Robin Mackenzie,
info@hrausa.com

Hans Diam Inc., Prime International
592 Fifth Avenue, 3rd Floor
New York, NY 10036
Phone: (212) 869-4267
Fax: (212) 869-4987

Hasenfeld-Stein
580 Fifth Avenue
New York, NY 10036
Phone: (212) 575-0290
Fax: (212) 391-4597
www.hasenfels-stein.com
Contact: Hertz Hasenfeld,
hertz@hasenfeld-stein.com

Hearts On Fire
99 Summer Street
Boston, MA 02110
Phone: (617) 912-5300
Fax: (617) 523-4814
www.heartsonfire.com
Contact: Peter Smith,
psmith@heartsonfire.com

Herbert Goldberg Company
14951 Dallas Parkway, Suite 250
Dallas, TX 75254
Phone: (800) 444-5566
Fax: (972) 490-4660
www.herbertgldberg.com
Contact: Robert Goldberg,
Robert@herbertgoldberg.com

Howard Engle, Inc.
555 Fifth Avenue, 6th Floor
New York, NY 10017
Phone: (212) 682-2999
Fax: (212) 682-5540
www.howardengleinc.com
Contact: Howard Engle,
sales@howardengleinc.com

IGC Group
Hoveniersstraat, Box 248
Antwerp, Belgium 2018
Phone: (32) (3) 203-4567
Fax: (32) (3) 231-1634
www.igcgroup.com
Contact: Christophe DeBorrekens,
cdb@igcgroup.com

Indian Diamond Imports, Inc.
15 W. 47th Street, Suite 407
New York, NY 10036
Phone: (212) 921-0056
Fax: (212) 921-2920
Contact: Nimesh Shan,
idinyc@verizon.net

Instyle Jewellery
580 Fifth Avenue, Suite 911
New York, NY 10036
Phone: (212) 704-2111
Fax: (212) 704-9994

Interjewel
580 Fifth Avenue, Suite 1512
New York, NY 10036
Phone: (212) 869-7801
Fax: (212) 869-4062
Contact: Sanjay Kothari,
sales@interjewel.com

Intergem Inc.
550 S. Hill Street, Suite 1256
Los Angeles, CA 90013
Phone: (213) 622-0207
Fax: (213) 489-7911
Contact: Umesh Mehta,
intergem@belairmail.net

Ishaia Trading
579 Fifth Avenue
New York, NY 10017
Phone: (212) 371-6990

J.B. Diamonds
406 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2361-1111
Fax: (91) (22) 2363-0714
www.jbgroupworldwide.com
Contact: Vallabh Surani,
admin@jbdiamondsindia.com

JKD West LLC.
9601 Wilshire Boulevard, Suite 730
Beverly Hills, CA 90210
Phone: (310)550-1115
Fax: (310) 550-1112
Contact: Zuri Mesica,
zurie@juliusklein.com

Jacob & Co.
48 E. 57th Street
New York<NY 10022
Phone: (212) 888-2330
Fax: (212) 719-0074
www.jacobandco.com

Jewel Goldi (NY) Inc.
2 W. 46th Street, Suite 1108
New York, NY 10036
Phone: (212) 398-3050
Fax: (212) 398-3051
www.jewelgoldi.com
Contact: Vishwajit Jariwala,
jit@jewelgoldi.com

Jayam N.V.
Hoveniersstraat 50-52
Antwerp, Belgium 2018
Phone: (32) (3) 231-0935
Fax: (32) (3) 232-9220
www.jayamnv.be
Contact: Mihir Mehta,
info@jayamnv.be

Jewelex India Pvt. Ltd.
11 Jain Towers, 17 Mathre Road, Opera House
Mumbai, India 400006
Phone: (91) (22) 2361-0900
Fax: (91) (22) 2361-0911
Contact: Nilesh Kothari,
nilesh@jewelexindia.com

Julius Klein Group
20 West 47th Street
New York, NY 10036
Phone: (800) 334-0919
Fax: (212) 921-1769
www.juliusklein.com
Contact: Moshe Klein,
moshe@juliusklein.com

K. Girdharlal International Pvt. Ltd.
1011 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363_1513
Fax: (91) (22) 2363-3027
www.kgirdharlal.com
Contact: Nick Gould,
nick@kgirdharlal.com

KGK Enterprises
647A Panchratna, Opera House
Mumbai, India 400004
Phone: (91) (22) 2369-8881
Fax: (91) (22) 2369-9102
www.kgkgroup.com
Contact: Monika Divekar,
monica@kgkgroup.com

K.P. Sanghvi Group
1301
Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-0315
Fax: (91) (22) 2363-0813
www.kpsanghvi.com
Contact: Arvind Sanghvi,
arvind@kpsanghvi.com

KP Diamond Jewelry
7500 Bellaire Boulevard, Suite 1025
Houston, TX 77036
Phone: (713) 541-9393
Fax: (713) 541 – 9494
www.kphouston.com

Karp Impex Ltd.
1411 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2369-9511
Fax: (91) (22) 2363-4491
www.karpgroup.com
Contact: Alkesh Sanghavi,
alkeshanghavi@karpgroup.com

Kiran Exports
109 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2367-6241
Fax: (91) (22) 2368-2436
www.kiranexports.net

Kristall, Inc.
611 W. 6th Street, Suite 1800
Los Angeles, CA
Phone: (213) 624-4000
Fax: (213) 624-1450

Kristall Production Corporation
4 Babushkin Street
Smolensk, Russia 214031
Phone: (7) (4812) 45-0550
Fax: (7) (4812) 61-0087
www.kristallmolensk.com
Contact: Edward Shtirbescu,
eshtirbescu@kristallsmolensk.com

L.I.D. Ltd.
23 Tuval Street, Noam Bldg. 11th Floor
Ramat Gan, Israel 52521
Phone: (972) (3) 575-7333
Fax: (972) (3) 752-2488
www.liddiamonds.com
Contact: Jack Cohen,
info@liddiamonds.com

Lakhi Group (Dilipkumar V. Lakhi)
102 Prasad Chmabers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-3023
Fax: (91) (22) 2368-1082
www.lakhigroup.com
Contact: Dilipkumar Lakhi, dvl@lakhigroup.com

Laxmi Diamond
316 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2367-7007
Fax: (91) (22) 2367-0390
www.laxmidiamond.com
Contact: Nitin Gajera,
laxmijpl@vsnl.com

Lazare Kaplan International Inc.
19 West 44th Street
New York, NY 10036
Phone: (212) 972-9700
Fax: (212)972-8561
www.lazarediamonds.com
Contact: Marcee Feinberg, mfeinberg@idealcut.com

Leo Schachter Diamonds
54 Bezalel Street
Ramat Gan, Israel 52521
Phone: (972) (3) 576-6222
Fax: (972) (3) 575-3569
www.lsdco.com
Contact: Elliot Tannenbaum, elliot.tannenbaum@lsdco.com

Lili Diamonds
1 Jabotinsky Street, Diamond exchnge Bldg.
Ramat Gan, Israel 2133
Phone: (972) (3) 575-0011
Fax: (972) (3) 575-0976
www.lili-diamonds.com

Livingstones
603 Dharam Palace, N.S. Patkar Marg.
Gamdevi, Mumbai, India 400004
Phone: (91) (22) 2361-1444
Fax: (91) (22) 2363-2314
www.livingstones.com
Contact: sandip@livingstones.com

Lockes Diamantaires
10 Columbus Circle
New York, NY 10019
Phone: (212) 823-9511
www.lockesdiamonds.com

Louis Glick Diamond Corporation
1271 Avenue of the Americas
New York, NY 10020
Phone: (212) 259-0300
Fax: (212) 489-8178
www.louisglick.com
Contact: Faye Winter,
fwinter@louisglick.com

M. Fabrikant & Sons, Inc.
1 Rockefeller Plaza
New York, NY 10020
Phone: (212) 757-0790
Fax: (212) 581-3061
www.fabrikant.com
Contact: Robert Cornfield, robc@fabrikant.com

M. Suresh Company Pvt. Ltd.
Jain Tower, 15th-16th Floor, 17 Mathew Road, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-9001
Fax: (91) (22) 2369-6492
www.msureshco.com
Contact: Paresh Pethani, msurseh@msureschco.com

Mahendra Brothers
611 Panchranta, Mama Parmanand Marg.
Mumbai, India 400004
Phone: (91) (22) 2363-4565
Fax: (91) (22) 2363-2061
www.mahendrabrothers.com
Contact: Milan Parikh, info@mahendrabrothers.com

MaxMark Inc.
5 S. Wabash, Suite 1500
Chicago, IL 60603
Phone: (312) 201-1001
Fax: (212) 201-1008
Contact: Pratik Shah, pratik@maxmarkjewelry.com

Memoire
P.O. Box 740
Skaneateles, NY 13152
Phone: (315) 685-1343
Fax: (315) 685-0403
Contact: J. Douglas McDowell, jdmmc@adelphia.net

Michael Werdiger
35 West 45th Street
New York, NY 10036
Phone: (800) 223-7390
Fax: (212) 302-5269
www.michaelwerdiger.com
Contact: Ben Burne,
bgfb@mwiny.com

Minestone
514 Panchratna, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-6901
Fax: (91) (22) 2363-3648
www.minestone.biz
Contact: Samir Mehta,
samir@minestone.biz

Mohit Diamonds
5th Floor, Mehta Bhavan, 311 New Charni Road
Mumbai, India 400006
Phone: (91) (22) 2382-7777
Fax:: (91) (22) 2380-9889
www.mohitdiamonds.com
Contact: Piyush Shan, diamonds, piyushshah@mohitdiamonds.com;
Robin Mehta, jewelry, robinmehta@mohitjewellery.com

Moti Ganz
Yahalom Bldg. 21 Tuval Street
Ramat Gan, Israel 52522
Phone: (972) (3) 575-2218
Fax: (972) (3) 575-1210
www.motiganz.com
Contact: Ronit Ganz,
ronit@motiganz.com

Navin Gems
1112/A Prasas Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-4124
Fax: (91) (22) 2363-0299
www.navingems.com
Contact: Parag Shah,
info@navingems.com

Neil Joseph
5295 Town Center Road, Suite 200
Boca Raton, FL 33486
Phone: (561) 394-5144
Fax: (561) 361-1925

Odimo Inc.
14001 N.W. 4th Street
Sunrise, FL 33325
Phone: (954) 835-2233
www.odimo.com

Orli Diamonds
67 E. Madison Street, Suite 1606
Chicago, IL 60603
Phone: (312) 332-0990
Fax: (312) 332-2914
www.orlidiamonds.com
Contact: Hadasa Dekalo, orli@orlidiamonds.com

Overseas Diamonds N.V.
Hoveniersstraat 2, Suite 803
Antwerp, Belgium 2018
Phone: (32) (3) 234-3014
Fax: (32) (3) 234-1517
www.overseasdiamonds.com
Contact: Asher Lubeleski, office@overseasdiamonds.com

PDD NYC
589 Fifth Avenue, Suite 906
New York, NY 10036
Phone: (646) 619- 0056
Fax: (646) 619-0058
Contact: Yoni Mizrahi,
yonim@pddltd.com

Paras Diamond Corp. dba Amikam
592 Fifth Avenue, 3rd Floor
New York, NY 10036
Phone: (800) 232-2728
Fax: (212) 764-7593
Contact: Samir Mehta,
samir@amikam-paras.com

Pluczenik Diamond Company
Beurs voor Diamanthandel, Suite 1601, Pelikaanstraat 78
Antwerp, Belgium 2018
Phone: (32) (3) 231-7710
www.pluczenik.com

Premier Diamond Cutting Ltd.
1249/123-127 Gems Tower, 11/F Charoenkrung Road, Bangrak
Bangkok, Thailand 10500
Phone: (66) (2) 267-4851
Fax: (66) (2) 237-6452
www.premier-bkk.com
Contact: Achiraya Inkatanuvat, pmierdia@premierbkk.com

Premier Gem Corporation
529 Fifth Avenue, 19th and 20th Floors
New York, NY 10017
Phone: (212) 319-5151
Fax: (212) 759-2255
www.premiergem.com
Contact: Nicky Schur,
info@premiergem.com

Prism Diamonds Inc.
20 E. 46th Street, Suite 900
New York, NY 10017
Phone: (212) 719-9748
Fax: (212) 922-9154
Contact: Sanjay Javeri, prismdiamonds@yahoo.com

Rachminov Diamonds
48 W. 48th Street, Suite 803
New York, NY 10036
Phone: (866) 400-5989
Fax: (212) 354-1991
Contact: Marsh Ramras, marsh@fancycolor.net

Ramat Gan, Israel 52521
Phone: (972) (3) 575-2116
Fax: (972) (3) 575-0219
www.yei.co.il

Rand Precision Cut Diamonds (Pty.) Ltd.
Suite 601, S.A. Jewellery Centre, Philip and Main Streets
Johannesburg, South Africa 2023
Phone: (27) (11) 334-6216
Fax: (27) (11) 334-5559

Ratilal Becharla & Sons (Jasani Group)
401/2 Prasad Chambers, Opera House
Mumbai, India 400004
Phone: (91) (22) 2363-1351
Fax: (91) (22) 2363-1918
www.jasanigroup.com
Contact: Apurva Kothari, info@jasanigroup.com

Richold S.A.
Cours de Rive 10
Geneva, Switzerland 1204
Phone: (41) (22) 731-3150
Fax: (41) (22) 731-4397
Contact: Maurice Dabbah,
info@richold.com

Ritani
2 W. 45th Street, Suite 307
New York, NY 10036
Phone: (212) 997-7742
Fax: (212) 997-7682

Robert Lee Morris
400 West Broadway
NY, NY 10012
Phone (212) 633 4948
Contact: Allison Aston, allisona@roberleemorris.com

Rosy Blue Inc.
529 Fifth Avenue
New York, NY 10017
Phone: (212) 687-8838
Fax: (212) 856-9828
Contact: Dipu Mehta
dipu@rosyblue.com

Rosy Blue N.V.
Hoveniersstraat 53
Antwerp, Belgium 201
Phone: (32) (3) 206-1600
Fax: (32) (3) 206-1601
www.rosyblue.com
Contact: Raj Mehta, raj.mehta@rosyblue.com

S.A. Gems 67 E. Madison, Suite 1816 Chicago, IL 60603 Phone: (800) 344-6605 Fax: (312) 372-3924 www.sagems.com Contact: Chris LaTrobe, clatrobe@sagems.com	S. Vinodkumar Diamonds Private Limited 509/510 Prasad Chambers, Opera House Mumbai, India 400004 Phone: (91) (22) 2369-0364 Fax: (91) (22) 2363-0704 www.svindkumar.com Contact: Amish Shah, amish.shah@svinodkumar.com	Safdico Ltd. St. Jamew Court, Suite 308, St. Denis Street Port Louis, Rep. of Mauritius Phone: (230) 211-6242 Fax: (230) 211-7489 www.safdico.com	Samdimon Inc. 589 Fifth Avenue, Suite 1008 New York, NY 10017 Phone: (212) 575-2358 Fax: (212) 575-2359 www.samdimon.com
Sanghavi Diamonds 550 S. Hill Street, Suite 1141 Los Angeles, CA 90013 Phone: (213) 623-1817 Fax: (213) 623-2819 Contact: Nirav Shah, sanghavila@yahoo.com	Sanghavi Diamonds Inc. 1212 Avenue of the Americas, 11th Floor New York, NY 10036 Phone: (800) 234-1787 Fax: (212) 719-4186	Savin Diamond Corp. 580 Fifth Avenue, Suite 810 New York, NY 10036 Phone: (212) 840-3050 Fax: (212) 840-3172 Contact: Mitesh Gandhi, savininc@aol.com	Schachter & Namdar (Pty.) Ltd. South African Jewelry Center, Suite 619 Johannesburg, South Africs 2023 Phone: (27) (11) 334-3403 Fax: (27) (11) 334-3514 Contact: Emanuel Namdar, emanuel@sn-asia.com
Sheetal Manufacturing Company 1001 Prasad Chambers, Opera House Mumbai, India 400004 Phone: (91) (22) 2363-4884 Fax: (91) (22) 2363-4849 www.sheetalgroup.com Contact: Hirabhai Kakadia, inquiry@sheetalgroup.com	Shree Ramkrishna Export 214 Prasas Chambers, Opera House Mumbai, India 400004 Phone: (91) (22) 5552-5000 Fax: (91) (22) 2363-3846 www.shreemkrishnaexport.com	Simmons Jewelry Company 1 Rockefeller Plaza, 28th Floor New York, NY 10020 Phone: (212) 397-0981 Fax: (212) 397-0975 www.simmonsjewelryco.com	Smolensk Diamonds USA, Inc. 580 Fifth Avenue New York, NY 10036 PhoneL212) 921-4300 Fax: (212) 921-4646
S.N. Asia (USA) Inc. 589 Fifth Avenue, Suite 901 New York, NY 10017 Phone: (800) 421-8063 Fax: (212) 421-8033 Contact: Menashe Friedman, mfriedman@snasia.com	Sotheby’s Diamonds 1334 York Avenue New York, NY 10021 Phone: (212) 894-1400 www.sothrbydiamonds.com Contact: Christina Floyd, christina.floyd@sothebys.com	Star Asia Inc. 7 W. 47th Street, Suite 401 New York, NY 10036 Phone: (212) 997-7827 Fax: (212) 398-4446 Contact: Sailesh Sanghvi, sailesh@starasianinc.com	Star Diamond Enterprises 576 Fifth Avenue, Suite 805 New York, NY 10036 Phone: (212) 869-5115 Fax: (212) 869-1399
Stuller P.O. Box 87777 Lafayette, La 70598-7777 Phone: (800) 877-7777 www.stuller.com Contact: Blaine Latiolais, blaine_latiolais@stuller.com	Steinmetz Group (Diacor International Ltd.) P.O. Box 1064 Geneva, Switzerland 1211 Phone: (41) (22) 788-1460 Fax: (41) (22) 788-1461 www.steinmetz-group.com Contact: Lara Protopapa, info@steinmetz-group.com	Spira Diamonds Pelikaanstraat 78 Antwerp, Belgium 2018 Phone: (32) (3) 232-9032 Fax: (32) (3) 225-2232 www.spiradiamonds.com Contact: Alain Schiff, alainschiff@spiradiamonds.com	Shrenuj & Company Ltd. 405 Dharam Palace, 100-103 NS Patkar Marg. Mumbai, India 400007 Phone: (91) (22) 5637-3500 Fax: (91) (22) 2363-2982 www.schrenuj.com Contact: Vishal Doshi, diamonds@shrenuj.com
Suashish Diamonds Limited 11th Floor, Mehta Mahal, 15 Mathew Road Mumbai, India 400004 Phone: (91) (22) 2363-7151 Fax: (91) (22) 2363-0683 www.suashish.com	Suberi 902 Broadway, 14th Floor New York, NY 10010 Phone: (212) 979-9100 Fax: (212) 979-5331	Sundiamond bvba Hovenierstraat 19 Antwerp, Belgium 2018 Phone: (32) (3) 232-1711 Fax: (32) (3) 231-0528 www.sundiamond.com, www.sundiamond.be	Supergems Holdings Jebel Ali Free Zone, P.O. Box 17763, MODI-40, Road 731 Dubai, United Arab Emirates Phone: (97) (14) 881-4950 Fax: (97) (14) 881-9947 www.supergemsgroup.com Contact: Walter Hawes, dubai.polished@supergemsgroup.com
Suresh Brothers 511 Panchratna, M.P. Marg, Opera House Mumbai, India 400004 Phone: (91) (22) 2363-1741 Fax: (91) (22) 2363-2654 www.sureshbros.com Contact: Sachin Ved, sachin@sureshbros.com

Tache’ Company N.V.
Hoveniersstraat 53
Antwerp, Belgium 2018
Phone: (32) (3) 234-1818
Fax: (32) (3) 231-8792
www.tachedimamonds.com
Contact: Jean-Jacques Tache’, joshw@tachediamonds.com

Tara Jewels Exports Pvt. Ltd.
B/14 Girgaum Terrace, Benham Hall Lane, Opera House
Mumbai, India 400004
Phone: (91) (22) 5677-4444
Fax: (91) (22) 5677-4464
www.tarajewels.co.in
Contact: Sajid Sakarwalla, sajid@tarajewels.co.in

Tasaki Shinju Co. Ltd.
3-2, 6 Chome, Minatojima Nakamachi
Chuo-ku, Kobe, Japan
Phone: (81) (78) 303-3321
Fax: (81) (78) 302-4521
www.tasaki.co.jp
Contact: Masanobu Ebistani,
m-ebisutani@tasaki.co.jp

Tiffany & Co.
555 Madison Avenue, 7th Floor
New York, NY 10022
Phone: (212) 277-5900
www.tiffany.com

Uni Design USA
592 Fifth Avenue, 11th Floor
New York, NY 10036
Phone: (212) 282-1111
Fax: (212) 282-1122
Contact: Shreyash Mehta, shreyash@unidesignusa.com

Univeral Pacific
579 Fifth Avenue, Suite 1515
New York, NY 10017
Phone: (212) 813-1110
Fax: (212) 813-1122

Uri Schwartz & Sons Diamonds Ltd.
580 Fifth Avenue, Suite 2012
New York, NY 10036
Phone: (212) 575-8051
Fax: (212) 575-8065
Contact: Zvi Ben Joseph, zvi@aschwartz.com

Venus Jewel
901-902 Panchrantna, Opera House
Mumbai, India 400004
Phone: (91) (22) 2367-4444
Fax: (91) (22) 2367-3333
www.venusjewel.com
Contact: Anil Shah, anilshah@venusjewel.com

Venus Solitaire Inc.
580 Fifth Avenue, Suite 537
New York, NY 10036
Phone: (212) 921-1800

Vijaydimon
Pelikaanstraat 54
Antwerp, Belgium 2018
Phone: (32) (3) 203-0596
Fax: (32) (3) 233-9838
Contact: Milind Kothari, vijaydiamond@pandora.be

Vijay Gold designs Corp.
1212 Avenue of the Americas, 9th Floor
New York, NY 10036
Phone: (212) 302-0945
Fax: (212) 302-0872
Contact: Kayomarz Khambatta, kayomarz@vijaygold.com

Vishinda Inc.
579 Fifth Avenue, Suite 1220
New York, NY 10017
Phone: (212) 829-0725
Fax: (212) 829-0371
Contact: Prakash Lakhi, prakash@vishinda.com

WF Diamond, Inc.
580 Fifth Avenue, Suite 2200
New York, NY 10036
Phone: (800) 458-3678
Fax: (212) 354-0003
www.wfdiam.com
Contact: Atsmon Paz, apaz@wfdiamonds.com

Weindling International LLC.
529 Fifth Avenue
New York, NY 10017
Phone: (212) 764-7979
Fax: (212) 764-9779
www.weindling.com
Contact: Shelly Gordon, shelley@weindling.com

Wing Hang Diamond Co. Ltd.
1605-9, Lane Crawford House, 64-70A Queen’s Road
Central, Hong Kong
Phone: (852) 2526-6512
Fax: (852) 2868-4988
www.winghangdiamond.com

YEI Yahalomei Espeka International Ltd.
23 Tuval Street, Noam Building, Suite 501

Yerushalmi Brothers Diamond Ltd.
Diamond Exchange, Building Maccabi 342, 1 Jabotinsky Street
Ramat Gan, Israel 52520
Phone: (97) (2) 3575-0151
Fax: (97) (2) 3575-0152
www.yerushalmi.com

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Potato Chips and Rough Diamonds?

I know you are asking yourself what on earth could these things have in common. Surprisingly a lot. First, here are the five most common rough diamond shapes.

Crystals

Rounds
Princess
Box Radiants
Standard Radiants

Makeable

Rounds

Splittable

Rounds
Fancy Shapes

Macle

Fancy Shapes

Flat

Small Stones
Trilliants and Baguettes

Now to the potato chip analogy. Take any bag of potato chips. Firmly pinch both the left and right tops of the bag (right under the glued part). Now pull! See the chips? Smell the freshness (ok freshness is not really a factor for this example but I’m trying to put you in the moment). Look in the bag. . . . How many perfect chips do you see? Four? Five? One? An unopened bag of potato chips is like the earth before we started excavating diamonds. Now start pulling out the chips! Start with the perfect ones, then the next to perfect ones, then the half broken ones and so on and so forth. After you are done pulling, what do you have left? Crumbs! Potato micro chip! That’s where we are in the world of diamonds now. The bottom of the bag. Those first few perfect and less broken chips (in the diamond world) we call crystals, makables, and sawables. The chip crumbs are called macles and flats (see above). The earth has been heavily excavated since the mid-1860s! The good stuff is gone and the world’s miners are sitting on boatloads of macles and flats. They have no choice but to dump them on the market (which they have been doing now relentlessly for the last two years). Since marquise, pears, ovals, Asschers, emerald cuts are all cut from the bottom of the barrel and since the bottom of the barrel is being dumped over our heads, there is now and will forever be an over abundance of these fancy shapes on the market! As any economist will tell you, if supply exceeds demand, the price falls! And diamonds that can’t hold there value can not be bondable. So, as of September 8th 2005, only Box Radiants, Standard Radiants and Rounds are bondable. As everyone knows, nobody wants what everyone can have.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

GIA’s Boyajian resigns, questions about grading lab scandal linger

William Boyajian, president of the Gemological Institute of America (GIA), resigned on May 22, marking the latest casualty in a pay-for-upgrading scandal that has sullied the reputation of the educational organization and gem grading laboratory.

Donna Baker, GIA’s senior vice president and general counsel since 2001, will serve as acting president while GIA searches for Boyajian’s replacement, the institute announced.

Boyajian’s resignation comes as GIA struggles to come to gripes with a diamond grading scandal that has rocked its credibility. In October 2005, GIA announced that Thomas Yonelunas, chief executive of its lab operations, had resigned and that it had fired four lab employees based on an internal investigation it had undertaken in the wake of a lawsuit accusing GIA’s New York lab of falsifying diamond grading reports. News stories of the scandal received prominent headlines in The Wall Street Journal, The New York Times and other newspapers just before Christmas last year, heightening fears among jewelers that diamond sales would suffer.

In November, Ralph Destino, chairman emeritus of Cartier and a member of GIA’s Board of Governors, was appointed executive chairman of GIA, effectively relieving Boyajian of day-to-day control.

Boyajian tenure spanned the modern era at the 75 year old school of gem sciences. Joining as a teacher in 1975, he climbed up through the role of marketing and new project director and ascended to president in 1986, succeeding gemology pioneer Richard Liddicoat of the Four C’s.

Perhaps Boyajian’s greatest legacy, unlike the gemological contributions made by his predecessors, will be GIA’s 1996 relocation from Santa Monica to an expansive, modern campus overlooking the Pacific Ocean in Carlbad, CA. Under Boyajian’s leadership on the project, the industry donated millions for the campus construction.

Ultimately, it would be the issue of fund-raising that would come to haunt GIA, becoming inextricably intertwined with allegations of bribery at the lab. Under Destino, GIA quickly acted to remove any appearances of impropriety stemming from programs such preferred pricing for “member” dealers. Dealers believed to have been involved in the scandal were banned from receiving any diamond grading services.

Since 1995, GIA has recognized donors of $100,000 or more each year at its League of Honor Dinner in New York. The grading scandal raised questions about the list of inductees, which includes upward of 100 companies from DeBeers to Tiffany & Co.: Did diamond companies on the list benefit in their grading for donating? Did the money donated by non-diamond companies go to a worthy cause?

From here on, however, GIA has vowed to no longer solicit or accept donations from companies whose stones are graded in lab and said that it will change the focus of the annual dinner from honoring donors to recognizing individuals for industry service.

Diamantaires still want names
Within the diamond community, Boyajian’s departure was greeted with the sense that the move was unfortunate yet inevitable.

“I think that the board at GIA felt this was a necessary step,” says Ronald Friedman, president of the Diamond Manufacturers and Importers Association (DMIA).

While not surprised by the move, he stresses that the lab issue shouldn’t overshadow Boyajian’s accomplishments during his 20-year tenure as president.

“One shouldn’t lose sight of all the work that was done. He certainly shaped and oversaw the growth of the organization. Both in gemological services and education, I think he left an indelible mark,” Friedman says.

But there remains frustration over the fact that those implicated as bribers have not been named or held accountable.

“The industry and the trade is still waiting for the release of the names which is critical for the whole industry to get past the situation,” he adds.

Jeff Fischer, president of the International Diamond Manufacturers Association, echoed Friedman’s sentiments, praising V Boyajian’s track record but noting desire for exposure of any diamond dealers involved.

“That’s a law enforcement process and we are still hoping to see that,” he says.

While those in the diamond community wouldn’t comment on whether the resignation is good or bad for GIA, they said overall changes made to address the issue are for the better.

“My personal feeling is that GIA is on the right track,” says Ronnie Vanderlinden, vice president and chief financial officer for the DMIA. “As far is Bill goes, he’s an unfortunate casualty.”

Still, some said that as leader of GIA, Boyajian had to take the ultimate responsibility for what happened on his watch. One industry insider, who asked not to be named, likened the situation to when a coach who pushes his team to perform must be held accountable if his players take it too far and start using drugs.

Boyajian will stay on through July as a consultant, working with Baker and Destino through the transition. According to Helene Fortunoff, the new chairman of GIA’s Board of Governors, the institute has formed a special committee to search for a new permanent president. Baker will be considered as a candidate, she said.

Recruited by Boyajian in 2001, Baker’s job had been to oversee GIA’s legal affairs, human resources, operations, real estate planning and development. A GIA graduate gemologist, she also oversaw GIA’s museum, library and numerous special projects.

Written by Whitney Sielaff and Susan Thea Posnock
Published in National Jeweler

State of the Union

(The Future of Diamonds)

As I have written recently the diamond industry is going through a dramatic evolution.

Diamond production is declining for the first time in over 25 years.
Last year, DeBeers, shut down their last three underground mines.
Of 170 diamond companies globally, only 25 are actually producing.
Diamond inventories held by DeBeers and other mining companies that totaled over $22 billion US just a few years ago are down to three to four billion.
In 2005, Rio Tintos’ Argyle mine in Western Australia’s Kimberly region, the world’s largest left $10 billion US of demand unfulfilled. Quite simply, one out of every three orders for a diamond is not filled— and it’s going to get worse. By 2015 Canada’s Ekati mine (run by BHP Billiton) is predicted depleted; Rio’s Diavik mine in Canada is next and the world’s largest, the Argyle mine will be exhausted in the next decade even with a billion dollar overhaul.

Botswana which produces one out of every four gem quality diamonds can’t be expected to carry the load even though they have upped their production by 17% in the last year. With booming economies in China and India, the world demand for diamonds is at a “tipping point.” In only the last five years China has doubled their jewelry purchases. SOLD OUT is going to be a familiar phrase the public is going to have to deal with when they go looking for a non-commercial, gem quality diamond. Of the average 114 million carats sold each year, only 2.28 million (that’s 2%) are non-commercial. Non- commercial is defined as a diamond that is 100% natural, white, eye clean, well proportioned and fully bondable. In the U.S. alone, 49 out of 50 diamonds sold in 2005 did not meet these criteria. To make matters worse, “Brick and Mortar” stores and online consolidators are taking advantage of the shortages by offering “Cert pretty” diamonds (these are diamonds that have lab grading reports by labs that guarantee nothing and appear to be attractive but are actually only commercial grade “seconds”). Making matters worse for the public are the bribery scandals at the labs; making it increasingly difficult for the consumer to purchase the real thing vs. a bluff diamond.

Besides the sentimental attraction to a diamond there has to be an actual dollar value or the whole industry will implode and the diamond engagement ring may become a thing of the past like $.99 a gallon of gas. The new reality says world-renowned geologist Dr. Charles Fibke is that diamonds could double in value by 2010.

Solution

Since diamonds were discovered over 2000 years ago in India, the world has produced over 380 tons of diamonds. These diamonds haven’t left the planet; they lie dormant in the private sector and represent the largest stockpile of diamonds that could be harvested again. If the diamond tradition is going to continue to work, the public is going to have to allow diamond companies access to these gems and the public will have to understand a “used” diamond is better than no diamond at all. While this may be the last generation to own a diamond cut to order, it doesn’t have to be the last to possess one. Patek Phillip Watch Company says that nobody truly owns one of their watches that they just hold on to it for the next generation. If we can adopt the same philosophy with diamonds, we’ll be alright.

by Fred Cuellar, author of the best-selling book “How to Buy a Diamond.” More questions? Ask the Diamond Guy®

Diamond Cutters International

Understanding the Diamond Trade

Articles

False Promise

The ‘Blood Diamond’ Resurfaces

De Beers to Reduce Diamond Supply 50% on U.S. Slump

Blood Diamonds

Building Noah’s Ark & Joining Lucy

The Blue Nile Blues

What’s in a Name?

Warping

Tricks of the Trade

See No Evil

Royal Asscher Diamond

Monarch Diamond

Inscription Deception

High Definition Diamonds, Fact or Fiction?

Ice in Ice

Fall of the Tablet of Truth

Fine Print

Chapter Twenty-Two: The Great Overhang

Caveat Emptor

Most Wanted

Potato Chips and Rough Diamonds?

GIA’s Boyajian resigns, questions about grading lab scandal linger

State of the Union

Ask The Diamond Guy ^®

My Gemologist ^®

Diamond Value

How to Buy a Diamond

Ask The Diamond Guy ®

My Gemologist ®

Diamond Value

How to Buy a Diamond

Ask The Diamond Guy ^®

My Gemologist ^®