|
RAPAPORT... U.S. District Judge Karon O. Bowdre sentenced former jeweler Joseph Harold Gandy to three years and nine months in prison, to pay $20,000 in restitution to jewelers and to forfeit $1.5 million in diamonds and jewelry to the government, in accordance with a binding plea agreement.
In October, Gandy, 65, was charged with one count of money laundering for pawning property worth more than $10,000 that he obtained through wire fraud, which he committed when he submitted an insurance claim on diamonds falsely reported as stolen. Prosecutors also charged Gandy with one count of being a convicted felon in possession of firearms for 99 weapons that were seized in a search of his Vestavia Hills, Alabama home in November 2013. Gandy was prohibited from possessing weapons stemming from a 1989 federal mail fraud conviction. Gandy pleaded guilty to both federal counts in November. The state is prosecuting him separately on weapons and drug charges based on the evidence seized at his residence. A state court hearing is scheduled for later this month.
Gandy operated the Denman-Crosby Jewelry Store in Mountain Brook. During a loose diamond Christmas promotional event in December 2004, he reported that two unidentified men robbed the store at gunpoint. At the time, the store was offering diamonds and other jewelry that Gandy had obtained on a consignment basis from wholesalers. Gandy increased the store's insurance coverage amount with XL Specialty Insurance Company a few weeks before the robbery, according to the prosecutor's investigation. In January and March of 2005, Gandy used interstate wire transmissions to submit insurance claims, including a detailed inventory of stolen goods valued at about $2.8 million. XL Specialty paid the policy's limit of $2.6 million. The investigation found that in July 2013, Gandy began sending a friend to jewelry stores in Jefferson County to pawn diamonds that had been reported stolen in 2004. In one case, a jeweler refused to purchase a 1.59-carat diamond that was mounted in a platinum setting, after the friend failed to show documentation for the stone. Subsequently, prosecutors claimed that Gandy then examined 10 to 12 diamonds to make sure they lacked inscriptions. On July 26, 2013, Gandy sent his friend to a Birmingham jewelry store to pawn a 3.01-carat emerald-cut diamond valued at about $43,000 that he reported stolen. That store accepted the diamond in exchange for a $12,000 loan. Gandy gave his friend $2,000 for the transaction. Between August and November of 2013, Gandy's friend pawned two more diamonds that were reported stolen: a 3.45-carat cushion-cut diamond for $8,000 and a 2.16-carat round diamond for $2,000, the prosecutors said. Gandy gave his friend $1,880 after receiving the $8,000 for the 3.45-carat diamond.
|