Oran Taub was Online as 'Bust Out' Lawsuit Filed

RAPAPORT... Interestingly enough the Avi (Alfred) Taub lawsuit included his myspace account, which shows a photograph of Avi and his brother Oran (also Oren.)

Myspace shows that Oran, who is named in a multi-million-dollar bust out diamond lawsuit filed in Manhattan June 28, 2007, was logged into myspace at the time the suit was filed. Avi, 28, on the other hand had not logged into myspace since December 28, 2005.  All parties named in the lawsuit have not been physically located as of press time.

Of course, in the news-neutered myspace world, no mention of the lawsuit from some 87 friends subscribed to and posting to Oran's myspace profile.

Oran's tagline reads: You live once...enjoy it.

The brothers, along with their father Shalom and all John Does, are named for defrauding plaintiffs of some $3.358 million in diamonds while holding themselves under the name A. Taub Diamonds Corporation. The suit alleges that the Taub group did not intend to pay for goods delivered on memo. The suit claims Avi, Shalom, and Shiran Atias personally signed for $1.36 million in diamonds on consignment which were given for examination and inspection purposes only. The diamonds were not returned.

Avi is said to have signed bad checks for $270,841.33, of which $208,892.61 is outstanding and for failing to pay personal guarantees of $23,040 to Bader & Garrin Diamonds, and FDC International, for $28,000.

Atias is named for having picked up diamonds, and personally signing for memo, in the sum of some $152,989.80.

The lawsuit describes Avi as an Israeli foreign national who resides on Long Island in Long Beach, New York, (the same city Oran lists on his myspace page.)

Shalom and Ora Taub are said to have lived in Valley Stream (also on Long Island,) but sold their home for $442,900 in March 2007, and moved to Long Beach in a residence purchased for $650,000 in September 2005.

Oran is described as a website designer (a claim he also makes on his myspace account,) under Oran Designs, but the firm is not licensed to do business in New York.

 Not that long ago...

A. Taub Diamond Corporation was created April 12, 2006, and only a few weeks ago the 'owners' vanished from the offices at 15 West 47th Street, suite 1700, in New York City.

In April 2006 Avi reported to the Jewelry Board of Trade that A. Taub Diamond was launched with a $100,000 home equity loan, but did not himself own property according to the case.

Avi and Shalom are reported to have contacted numerous wholesale dealers between June 2006 and March 2007 and at first used Alan Shahar at Shahar Diamonds as a credit reference. As time wore on, Taub used plaintiffs as references for one another (being one fact, which ultimately connected the 45 plaintiffs) in the bust out scheme.

During some 11 months, the Taubs build up their credit by slowly taking a few diamonds and paying on time.

From May 2006 through March 2007 no single month had more than 9 transactions outstanding. But from April 11, through May 31, 2007 defendants accelerated procurement (to at least 70 memos) taking more than $3 million on memo. Additionally, the defendants falsely stated they had customers for the goods and asked plaintiffs to convert the memos to invoices with credit terms. Some plaintiffs refused the terms and demanded return of goods, but defendants refused to return the diamonds. The court document stated that 40 more victims of the bust out scheme had not yet joined the  lawsuit.

Word of the fraud seemed to have spread right after the JCK Vegas show according to the documents. News spread  by word-of-mouth first, but then on June 20, David Rosenberg, president of the S.E. United States Diamond Bourse, alerted Rapaport News to the issue. Read Rosenberg's letter to the trade, published first on diamonds.net, and view his interview on the Rapaport weekly broadcast.

Avi signed memos in aggregate of $666,179.56, and Shalom signed for $535,981.25, both of which personally guaranteed the return of the diamonds and failure to return goods, as defined by memo, is an act of conversion. Atias signed for $152,989 in goods.

The lawsuit charges that Oran aided and abetted the fraud and fraudulent conveyance of diamonds by designing the A. Taub Diamond website and with posting of stolen diamond son the Internet through Polygon and RapNet.

Six days before the Rosenberg letter was sent to Rapaport News, Avi told several plaintiffs that he'd been robbed of $1 million in goods, and told some plaintiffs that his Jeweler's Block Policy would cover the goods. He also told some plaintiffs that he was in hospital. Other plaintiffs phoned Avi on June 14, and were told he was out of town until June 19. 

The case states that it was not possible for Avi to have the diamonds in his possession June 13 if all the goods were supposed to have been sold to customers. Therefore, it was stated that either Avi mislead plaintiffs on the scheme to convert memos to invoices, or in the claim that he had been robbed.

According to the papers filed, Avi owns a Jeweler's Block Policy, but has less than $150,000 in coverage.
  
Plaintiffs seek legal costs and punitive damages that send a message such conduct is morally reprehensible.