NASHVILLE, TN (WSMV) - A lawsuit filed Monday centers on what might be the most dramatic example yet of diamond discrepancies at Nashville's popular Genesis Diamonds.
In one of two suits filed on Monday, a customer said a pair of three-carat diamond cufflinks he bought from Genesis, with color grades certified by a lab known as EGL International, turned out to be six to seven colors worse and far less valuable when analyzed by GIA, the most stringent diamond grading laboratory.
The same customer also bought an expensive anniversary ring he claimed was exaggerated by four color grades in its EGL International certification.
"There's a six-figure difference, over $100,000, between what my client was told these diamonds were worth and what an independent appraiser told us they were worth when we had them checked this year," attorney Brian Cummings said.
Last May, the Channel 4 I-Team talked to customers, former employees and competing jewelers who claimed Genesis often sold diamonds certified by EGL International. In many cases, those diamonds were not of the quality the customers expected.
There are now three lawsuits against Genesis concerning misleading customers about the quality of certain diamonds.
Eli Richardson, Genesis Diamond's attorney, said diamond grading is done with the human eye and the store stands by what it sells.
"All grading is subjective, and EGL International is known to be more lenient than GIA," Richardson said. "That does not make EGL International certifications fraudulent, just more lenient."
The two customers who filed suits Monday are represented by a different attorney than the one who alleged Genesis was breaking U.S. custom laws by offering EGL-certified diamonds, since the laboratory is involved in a complicated legal fight over its name.
Cummings said his customers had no idea their diamonds weren't worth what they paid.
"We have purchases in 2012, 2013 and 2014 by two different individuals at three very different price points, but the single common denominator was Genesis Diamonds told these people on different days these items were worth or what their grades were, were far from the truth," Cummings said.
Attorneys for Genesis said the store offered full refunds to both customers who filed a suit Monday, but both refused.
Genesis also said at least one of the pieces of jewelry at issue wasn't even certified as the suit describes.
Reported by Demetria Kalodimos - Channel 4 Nashville, TN
Will rare pink diamond auction sparkle for investors?
Pink diamond tender comes as wealthy Asian buyers spur rise in the precious stones
Rio Tinto, the world's second-largest mining company, has launched its latest rare pink diamond auction in Australia as prices for the most sought after of precious gems stones are expected to surge. The 2014 Argyle Pink Diamonds Tender collection which is going under the hammer comprises 55 diamonds, including 51 pink and purplish red diamonds and four Fancy Red diamonds.
Only 13 Fancy Red diamonds have been included in the annual tender in the last 30 years.
Diamonds are becoming an increasingly rare item as fewer mines remain in operation and new discoveries dwindle. According to Petra Diamonds there are only around 30 operational diamond mines still working around the world. De Beers estimates there is only a 1pc chance of finding a profitable diamond mine.
Rio Tinto controls the market for pink diamonds from the Argyle mine in Australia. Around 65pc of the world's diamond supplies come from the Cullinan mine in South Africa. Jean-Marc Lieberherr, Rio Tinto Diamonds managing director said: "Decades ago, no one would have believed that Australia held the secret of diamonds, let alone virtually the world's entire source of rare pink and red diamonds.
"The pinnacle of the production from Rio Tinto's Argyle mine, the annual pink tender diamonds are now celebrated internationally as amongst the rarest and most valuable diamonds in the world. We have seen and continue to see sustained demand and price growth for Argyle pink diamonds.
" Investors have until October 8 to submit bids for the diamonds, which will be showcased in New York, Sydney, Perth and Hong Kong.
According to Rio Tinto, the market for pink diamonds is quite separate to white diamonds, and due to their rarity, pink diamonds typically command prices far in excess of white diamonds. The world's biggest certified diamond is the 3,106-carat Cullinan, found at the mine near Pretoria in 1905. It was cut to form the Great Star of Africa and the Lesser Star of Africa, set in the Crown Jewels of Britain. However, most of the new demand for diamonds is now coming from the Asian market.
In 2000, the whole of Asia made up 8pc of global diamond jewellery sales, while in 2012 China and Hong Kong alone made up 13pc, with the expectation that this will rise to 18pc by 2017. Bain's 2013 diamond report found that the stones have strong spiritual resonance in China, where diamonds are associated with eternity and high status. And the country's affluent middle class is predicted to grow by 60pc, or 200m, to a total of more than 500m over the next six years..
Blue diamonds are ultrarare, as are stones weighing more than 100 cts.—making this, as Petra puts it, a “truly significant find.” “It’s virtually unheard of to have a blue of over 100 carats,” says spokesperson Cathy Malins.
However, it’s not clear whether this will stand as the largest piece of blue rough ever found. One reference source says that a 620.14 ct. light blue stone was recovered in South Africa in 1984. Beyond that, there is no official record of the size of the rough was that produced the world’s most famous blue, the 45 ct. Hope, but it is estimated at 112 cts.
A statement from Petra did not comment on the color or clarity of the stone, saying it will require “further analysis in order to assess its potential value.” But an analyst told Reuters he believes it could set a new benchmark for the highest recorded price of a piece of rough when it’s sold later this year—besting Petra’s previous champ: the Feb. 2010 sale of a 507 ct. white stone for $35.3 million.
Thomas Gelb, educational director of the Natural Color Diamond Association, believes the stone has the potential to become a sizable piece of polished—possibly the largest blue stone ever.
“Given that it is from the Cullinan mine it is very likely a type IIb boron-rich diamond,” he says. “Type IIb diamonds are generally less likely to cleave or fracture during cutting and very frequently have few internal inclusions.”
The find occurs as the market for fancy colored gems continues to sizzle. Last month the 13.22 ct. fancy-vivid Winston Blue fetched $23.8 million at Christie’s, setting a new record for a blue diamond of $1.8 million a carat. A Petra statement noted: “This sets apart blue diamonds as one of the most highly concentrated forms of wealth known to man.”
The Cullinan mine—which Petra purchased from De Beers in 2008—has produced a number of significant blue stones, including a 39.9 ct. diamond, which sold for $8.8 million ($220,551 per ct.) in 2008; a 26.6 ct. diamond, which was eventually polished into the 7 ct. fancy-vivid blue Star of Josephine; and a 25.5 ct. diamond, which sold for $16.9 million ($663,144 per ct.) in 2013.
The auction market may have just set a record for the shortest-lived record.
One night after Sotheby’s set a new benchmark for the largest jewelry sale ever with its $141 million sale in Geneva, the Christie’s May 14 Magnificent Jewels sale in Geneva “blue” that away with an even-more-incredible $154 million tally.
Both topped the previous champ, Christie’s first-night sale of Elizabeth Taylor’s jewelry, which brought in $114 million.
The star of the Christie’s show was the Blue, a 13.22 ct. fancy vivid flawless pear-shape that fetched $24.2 million. The stone, accompanied by a letter from GIA that said it was the largest fancy vivid blue the lab had ever seen, was described by jewelry specialist Jean-Marc Lunel as “absolutely pure externally and internally. It is almost a dream.”
The stone’s winner was Harry Winston, which rechristened it the Winston Blue. This is the second time in the last year the Swatch Group–owned retailer purchased a notable stone; it spent $27 million on the 101.73 ct. D flawless Winston Legacy last May. “When Christie’s announced they were offering the largest flawless fancy vivid blue the GIA had ever graded, I had to buy it,” said Harry Winston CEO Nayla Hayek in a statement.
At $1,799,953 a carat, the sale may have scored a photo-finish per-carat record for a blue diamond, inching out an April 2013 sale at Bonhams, where a deep-blue cushion fetched $1,799,883 a carat. In any case, says president of Christie’s Switzerland François Curiel, “This is a record for a vivid blue flawless, while the Bonhams stone was deep blue, VS2.”
The overall hammer price, however, falls slightly short of the $24.3 million paid for the 35.56 ct. Wittelsbach in 2011.
The sale notched four other world auction records, including:
The Ocean Dream, a 5.5 ct. triangular-cut fancy vivid blue-green SI diamond, scored $8.63 million, a world record for a blue-green diamond.
A 76.51 ct. square-cut light pink VVS1 necklace by Leviev realized $10 million, a record total for a pink diamond.
A 21.41 ct. Russian alexandrite took in $1.3 million, a record auction price for a piece of alexandrite.
A 49.04 ct. pink sapphire went for $2 million, a world auction record for a pink sapphire.
“The jewelry market continues to remain extremely vibrant, and we look forward to a buoyant season as we move into auctions at Christie’s Hong Kong, London, Paris, and New York,” said Rahul Kadakia, international head of Christie’s jewelry department.
The story, which ran on local station WSMV, noted that Genesis frequently boasts about its low prices. But on the initial segment, which aired May 5, on-air experts charged that by using a lab with “lower standards,” consumers who buy the store’s stones think they are getting a better deal than they actually are.
One competing jeweler, Bob Forster, said he sent a Genesis stone graded G by EGL to GIA, where it got a K. Another stone graded D received a G. (EGL International did not return a request for comment.)
“[Consumers] think they’re comparing apples to apples,” Forster said. “They think they’re getting a great deal. But it’s not the same thing.… If you went into a steak house and they said, ‘We’ve got the rib eye on sale for $10.’ [You say] ‘Wow, I’ll get the rib eye.’ And a few minutes later, your food comes out, and it’s a big hamburger.”
In response, Genesis owner Boaz Ramon told the show that even the same diamond lab sometimes produces varying results.
“Keep in mind, diamonds are subjective,” he told the program. “There is no argument when you take a diamond from a certain lab, and you send this same diamond to a different lab, you’ll get different results. But, in the end, its all reflected in the price for the consumer.”
Ramon later told JCK that his three-store chain will “make some changes,” including reducing the amount of EGL International reports it carries. But he says that 78 percent of its diamonds carry GIA reports.
“We are not here to promote one lab over another,” he says. “We all know most jewelers carry all reports. We are not doing anything different than any other jeweler.”
The second installment tracked an unhappy customer who, it claimed, “paid nearly $5,000 [for a diamond at Genesis] less than six months ago, but two trained gemologists have since told him it’s realistically worth around $1,200.”
After the engagement went sour, the man returned to the store to ask for a refund, claiming the diamond wasn’t the quality he thought. With the news team’s hidden cameras rolling, a store employee told him in response: “The problem is that, you see, there are two different grading systems. One is the EGL, and one is the GIA.”
Genesis declined to give him a full refund, since Ramon said once a ring is worn, he can’t sell it again.
“Most people, for them, getting engaged is something very pure,” he said. “They want to start it right. They don’t want to wear a ring that somebody said ‘no.'"
In the end, the customer was offered $2,500, plus a $500 trade-in credit.
Ramon tells JCK that the ring was custom made for that customer, and the store’s policy is to offer a full refund after 30 days and trade-in credit after that.
“The problem is, when someone tries to sell their diamond, it doesn’t matter if it’s from Tiffany or Harry Winston, the jeweler or pawnbroker will give you all the reasons the ring is not good, because they want to give you the lowest amount possible,” he says. “There is no industry where you buy something retail, and then you get retail back.”
He says he offered the consumer a generous deal, which he was happy with. “I don’t know any other jewelry store that will give him 65 percent back for his ring including the setting,” he says.
Ramon adds the store will now make its return policy clearer on its invoices.
Overall, he blamed the story on fellow jewelers.
“Since we came to Nashville, we have been always attacked by the competition,” he says. “Before us, you couldn’t find a store in Nashville that carried Tacori, Martin Flyer, Jeff Cooper. We brought all that to town. Do the competitors like it? They don’t. Do the customers like it? So far, so good.”
Reporter Demetria Kalodimos told JCK she got interested in the issue because of a customer complaint “and it grew from there.”
“I’ve had a lot of email and phone calls from customers wanting to know what to do,” she says, adding she recommends they get their stone appraised by a graduate gemologist.
At the end of the second segment, the news anchor says that the show has been contacted by the Tennessee attorney general’s office, which recommends consumers take any complaints to the state division of consumer affairs.
British auction house Woolley & Wallis has denied media reports that it’s about to sell the world’s largest natural pearl—but notes that the specimen it’s selling is still pretty impressive, and likely to fetch more than $400,000.
The pearl in question measures 16.5 mm by 17.4 mm, weighs 33.15 cts., and is a natural saltwater pearl.
“It’s incorrect to say that it’s the biggest natural pearl in the world,” says jewelry department head Jonathan Edwards. “There are probably a couple of bigger pearls in existence. But it is one of the—if not the—largest natural pearls to come up for auction.”
He says his research hasn’t uncovered a larger natural one sold in the last 50 years.
The pearl came in from a private source, whose wife wore it, along with a cultured pearl, as an earring. When Edwards suspected it was natural rather than cultured, he had its origin certified with the Swiss Gemmological Institute (SSEF).
In a special note, the lab wrote: “The pearl shows an attractive white color with weak rosé and green overtones, poetically also referred to as the ‘orient of pearls.’ Such overtones are due to an iridescence effect caused on the surface of pearls and that greatly contribute to their beauty.”
Its estimate is £250,000, or $419,000. The auction is slated for May 1.
Based on the analysis below, 135 million carats of rough diamonds, valued at $17.8 billion, will be mined in 2014, which would represent an increase of approximately 3% over 2013 estimates. The 50 mines itemized below are estimated to account for 90% of global rough diamond supply in 2014, with the balance coming from private or small-scale operations, where production data is unreliable or not available at all.
Image 1: Rough diamonds at the Mirny Sorting Center, Republic of Sakha, Russia. Source: ALROSA.
The Marange diamond fields, a 300 square-mile alluvial deposit in Zimbabwe, was ranked the worlds largest source of diamonds in 2013 in terms of total carats produced, estimated to have produced almost 17 million carats or 13% of global supply. However, It appears that 2013 production levels will not be sustained in 2014 as grades have decreased and easily minable loose gravel has been rapidly depleted leaving more difficult-to-mine conglomerate stone. While Marange is a relatively new project with formal mining commencing only 5 years ago, alluvial projects like Marange tend to have a much shorter life span than open-pit or underground diamond mines, as the economic resource is limited to the easily accessible surface stones; mining deeper solid conglomerate rock is not economic in a lot of cases. None of the 7 private companies operating in Marange provide specific production guidance, but representatives of the companies have publically expressed frustration with decreased operating economics resulting from depleted resource. In 2014, Marange production is estimated to drop to 8-12 million carats or less.
Image 2: Orapa processing plant 2. Source: De Beers Group.
In 2013, Botswana’s Orapa mine was the worlds largest diamond mine in terms of total value of carats produced. In 2014 Orapa is again estimated to be the worlds largest by value estimated to produce $1.9 billion worth of diamonds. In 2014, the Orapa mine is also estimated to be the worlds largest in terms of carats produced with 12.9 million carats. De Beers’ and Botswana’s joint venture portfolio, Debswana, realized a 17% increase in production in Q4 2013, highlighted by higher grades realized at Orapa and the Orapa One processing plant resuming operations following unplanned maintenance in Q3 2013.
Australia’s Argyle mine, known as the worlds largest producer of fancy colored diamonds, including elusive pink and red diamonds, is estimated to produce 12.6 million carats in 2014, making it the second largest diamond mine in the world in terms of carats produced. While Argyle has a history of producing some of the most precious colored diamonds in world, unpopular brown diamonds, most of which are classified as industrial quality, account for the majority of Argyle’s production making the mine’s average carat value produced among the lowest in the world.
Image 3: ALROSA’s Mir mine. Source ALROSA.
The Russian government-run super-major ALROSA has 9 primary diamond mines, 10 alluvial mines, and 2 mines in development, accounting for approximately 95% of all Russian diamond production. ALROSA’s mines represent 8 out of the top 15 largest producing diamond mines in the world in terms of carats produced. ALROSA’s Jubilee and Nyurbinskaya mines are both estimated to produce over 9 million carats in 2014 making them the fourth and fifth largest projects in the world according to 2014 projections.
Jwaneng, the second largest diamond mine in Botswana, is nearing completion of the Cut-8 expansion, which will extend the mine life to at least 2025. Cut-8 will provide access to approximately 95 million carats of high quality diamonds, making Jwaneng the most valuable diamond reserve in the world. Jwaneng successfully recovered from a slope failure in Q2 2012, and is estimated to produce over 9 million carats of diamonds worth $1.3 billion in 2014.
Image 4: The Jwaneng mine, Botswana. Source: Debswana.
Venetia, South Africa’s largest diamond mine, realized a production increase of 57% in Q3 2013, on higher volumes and grades following recovery from flooding earlier in the year. A plan to convert Venetia to an underground mine received environmental approval in October 2013 and the project build is scheduled to commence shortly, which will increase the mine life beyond 2040. Venetia is estimated to produce over 3.5 million carats in 2014 with production valued at over $500 million.
Lesotho, a landlocked country within South Africa, is home to the Letseng mine, which has a history of consistently producing the most valuable diamonds in the world on an average per-carat basis. Letseng is estimated to produce only 110,000 carats in 2014, but the average price of carat produced is estimated to be around $2,200, which is significant considering the global average price per-carat of rough produced is around $130.
Image 5: The Leseli La Letšeng is a 478 carat D color diamond that was recovered from Gem Diamond’s Letšeng mine in September 2008. It was sold via tender in Antwerp in November 2008 for $18 million. Source: Gem Diamonds Ltd.
2014 will mark the first full year of production at Russia’s Grib mine. Estimated to produce 4 million carats annually once fully ramped up, Grib has a reserve of approximately 75 million carats and a mine life of approximately 20 years. Currently owned by Russian oil-major LUKoil, the company has publicly expressed interest is selling the asset, which lies outside of the oil company’s core strategy.
Botswana’s Ghaghoo mine is expected to commence production in the second half of 2014. Once production is fully ramped up, Ghaghoo is estimated to produce 750,000 carats annually worth an estimated $200 per carat.
The most anticipated diamond development project in the world, Canada’s Gahcho Kué, continues to move forward as permitting is expected to be approved in the second half of 2014, with mechanical completion of the processing plant and cold commissioning anticipated to start as early as 2015. Once fully ramped up, Gahcho Kué is estimated to produce 5 million carats of diamonds annually worth an estimated $185 per carat.
Figure 1: Global ranking of diamond mines by estimated 2014 production in terms of carats and dollar value.
One of our favorite designers, Bez Ambar, has designed and patented the Blaze cut diamond. He is now introducing a several new lines of diamond rings, pendants, and earrings using this unique and beautiful diamond shape.
The gorgeous diamond necklace has 41 graduated ovals brilliant cut diamonds (52.21 total carat weight, D/E color and at least SI1 clarity) and one pear shaped diamond (10.23 carat weight, D color, SI1 clarity) are prong-set in custom platinum basket-style necklace mounting.
The oval diamonds range from about 0.70 carat weight diamonds at the clasp, to one carat diamonds at the sides, increasing to two carat diamonds next to the five carat oval at the bottom. The extension part of the necklace includes a three oval segment that detaches form the main necklace and the pear shaped pendant that can be detached from the extension.
The main oval necklace can be worn with the five carat as the drop or can be worn with the extension and the 10.23 carat pear shaped diamond as the drop. The 10.23 carat pear shaped diamond can also be worn as a solitaire pendant attached to a chain or other style necklace. This design provides greater flexibility and allows the components to be worn at a variety of events and levels of formality.
The diamonds are all GIA graded diamonds with GIA laser inscriptions, handpicked for minimal bow ties and maximum brightness and sparkle.
Each diamond has also been Gemprinted, meaning that each diamond has had its unique GEMPRINT� (optical "fingerprint" of the diamond) entered into the International Gemprint Registry.
This is the type of world-class necklace that one would expect to see at the famous auction houses, on the red carpet worn by a celebrity, or in the showcases of the top international jewelers. We are proud that Diamond Source of Virginia could provide our client with this stunning necklace with high quality, exquisite beauty, and at a fraction of what a brand name luxury jeweler would charge.