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Trade ‘Blind to Diamond-Swapping Threat’
Aug 15, 2018 10:51 AM
By Joshua Freedman
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RAPAPORT... Diamond dealers are failing to protect themselves against stone-swapping,
and are instead waiting until an expensive loss occurs before taking action, equipment
suppliers have warned.
The switching of natural diamonds with synthetics or other
lower-value goods is a common phenomenon to which many traders are oblivious,
said Dror Yehuda, president of Israel-based Yehuda Diamond Company. That
company makes the Sherlock Holmes scanner, which detects laboratory-grown diamonds
created using both chemical vapor deposition (CVD) and the High Pressure-High
Temperature (HPHT) technique.
When an Israeli trader recently became the victim of a
diamond-swapping case, it was the Sherlock Holmes scanner that spotted the synthetics,
Yehuda said. Following the incident, which involved 3- to 5-carat diamonds, the
Israel Diamond Exchange stripped two people of their bourse membership and
reported the theft to the police, as reported by Rapaport News on August 5.
Waiting for trouble
“They buy the machine after it’s happened to them,” Yehuda said.
“Every week, people come, and we check [the diamonds] for them. Every week, we
discover [synthetic] diamonds in jewelry and parcels — maybe four times a
week.”
In the past, by placing a diamond on a scale to check that
the weight was exactly what it should be, dealers could confirm that no
switching had taken place. However, fraudsters are now using synthetics that
match a natural diamond’s characteristics, enabling them to carry out a switch that
can get past that type of test. Thieves sometimes recut lab-grown diamonds so
they closely match the 4Cs of the natural stone they intend to swap it with,
Yehuda explained.
The day-to-day solution is to scan diamonds before showing
them to a potential client, and again when returning the goods to the safe,
Yehuda advised. That ensures that any swapping will not go unnoticed.
Awareness matters
Being aware of what thieves might be up to is also critical
for minimizing losses. That applies even when dealing with people whom one
trusts, said Donald Palmieri, president of the New York-based Gem Certification
and Assurance Lab (GCAL). While few details are available about the incident at
the Israeli exchange, the fact that the victim and the culprits were both
bourse members suggests there was probably a degree of trust between them,
Palmieri speculated.
“How two stones were able to be switched was distraction —
maybe by being on a phone call,” he said. “There can be any number of reasons.
The most important thing though would be heightened awareness.”
Real-time checks are best, as thieves can switch a diamond
in an instant and remove a laser girdle inscription in five seconds, Palmieri
noted. Possible solutions include keeping a contraption on the desk that gives
off ultra-violet (UV) light, to give dealers an idea of whether a stone is
synthetic while they’re still with the client. Lab-grown diamonds do not
generally emit blue light under a UV lamp, while their natural counterparts
often do.
The cost of security
However, sometimes dealers just need to spend money on
expensive equipment — something they are too often unwilling to do, Palmieri
noted. Palmieri has a vested interest in the matter, as GCAL owns Gemprint,
whose technology places a unique “fingerprint” on each stone, making swapping
almost impossible.
Equipment suppliers argue that while the best machines cost thousands or tens of thousands of dollars, the diamonds in the recent Israeli
swapping case were worth hundreds of thousands of dollars.
“A lot of people still want to hold on to the handshake
approach,” Palmieri said. However, with thieves becoming cleverer and better
connected, that might not remain true for long.
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Tags:
chemical vapor deposition, crime, cvd, Diamond-Swapping, gcal, Gem Certification and Assurance Lab, gemprint, High Pressure-High Temperature, HPHT, Israel Diamond Exchange, Joshua Freedman, lab-grown diamonds, Rapaport News, scanners, Sherlock Holmes, stone-swapping, Synthetic diamonds, Synthetics, theft, Yehuda Diamond Company
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