Massive Diamond fraud revealed!

Have you bought a piece of diamond jewellery within the last eight years?

If you bought your diamond from a registered Canadian Diamond dealer you have nothing to worry about. On the other hand, if you got your stone on-line, from a discount store or from someone that works out of their basement, you may have bought a man made synthetic stone and not even known it. There are several very large “international wholesale dealers” operating in the diamond business that have been selling undetectable forgeries for much of the last decade. These criminals have been breaking both International and Canadian Federal laws by not disclosing the true nature of their products. You may have one of them, even if you paid for a natural gem.

And it isn’t necessarily the fault of your jeweller,  because until very recently, even the all knowing Gemological Institute of America (G.I.A.) couldn’t tell the difference between certain real and lab created stones. But now we can! GIA has been relentless in finding a way to tell the phonies from the real diamonds since the information of a widespread fraud was made known.

Since the fiasco about “blood diamonds” it has been very important to us to know, without any doubt, where our stones come from. We still do not sell any African stones. Hence, our decision to go Canadian. This has kept us from being involved with the newest problem in our industry.

Many, if not most jewellery store staff and owners, know very little about diamonds. They buy stones according to the certificates that accompany much of what they resell. They generally count on and trust their suppliers to be honest, knowledgeable and truthful people and the great majority of the people in the jewellery trades are, in fact, exactly that. Most suppliers work very hard to keep themselves clean and reputable.

But, as in any trade that has large amounts of money, there are a few “rotten apples”. These nasty people have deliberately taken stones, knowing that they knew were unnatural, and “salted” them in; including them in with a package of real stones. They then sold them all together as genuine. Since there wasn’t any test to prove otherwise, they were safe. Many, many “fantastic deal” stones have been sold in the last decade on the gray market. They have  no “chain of custody”and a few greedy retailers were unethical enough to accept the “deals”. Since there is nothing to verify the mine they came from, the house that cut them or any certification that proves that they are as described, the “phonies” had to be sent into appraisers with low ethics that allowed them to “bend the rules” and who were willing to certify them … for a price.

A little recent history may help you understand what has happened so far. There are several ways of creating diamonds that have been going on for many years. The first one began after a methane gas sewer explosion in the 50’s  revealed micro-crystalline diamonds in the soot. General Electric took notice and began to duplicate the process in a controlled lab situation. They found that by altering temperature, pressure or both, the size of the crystal changed. Hence they could create diamond abrasives for the optical and metal finishing trades with consistent sizes at far less cost than by using the previous grinding techniques. The size of these crystals were very small, only a few thousandths of an inch, much too small to be used in jewellery, and they were not gem quality.

This process continued on until the fusion flux or High Pressure, High Temperature (HPHT) method was discovered. A mass was deposited around a “seed crystal” to form a larger stone, similar to the way we sued to make salt or sugar crystals at school when we were kids. The stones made this way were larger, but they were always off white or coloured. Good marketing created a multi-hued feeding frenzy that ensued. The public gobbled up “Fancy” coloured diamonds that had been too rare and far too expensive for the average person to own. Each manufacturer added a minute amount of a chemical that identified the origin of the stone under spectral analysis.

Next came the mono molecular, chemical vapour deposition process. Originally developed for coating razor blades and fighter jet canopies, this process laid down layers of diamond only one molecule thick as an abrasion resistant protector. Someone we will not name, played with it until they could build the layers thicker and thicker. Finally, they had created clear, jewellery quality and sized gems but the problem arose that they chose to forgo using any identifying dyes or dope. The crystals they made were exactly identical to one specific type of natural occurring diamond. Their process slowly built the stone up, layer by layer, just as it occurred in nature; under extremely high  temperatures and pressures until some MIT technicians came by and suggested that high intensity microwaves would speed up the process. They decreased the time required by a factor of 100 and now the stones were coming out faster and in the larger sizes as well, very suitable for jewellery, at a fraction of the cost of mined stones.  And to compound the problem, they had shared the information with a lab in Russia . This same process was, at the same time, being used in Russia as well, to create stones that were also undetectable as man made.

And that was the problem ….  they were, until last year, undetectable from a natural stone. The closest GIA and other labs could come to identifying them was to state the “if a stone is of a certain type and exhibits these characteristics, it might be man made.” But, then again … it might be natural. Not a good enough deterrent to stop “the bad guys” from selling the stones to select dealers with loose morals.

Only Canadian diamonds have had protocols and safeguards in place all during this time period to prevent this from happening. Neither blood diamonds nor phonies can enter the system maintained in Canada.

So … this is why we, at Westdale Jewellers, chose to deal with Canadian stones. We know where our stones come from; they come from the very same hole in the ground in the Northwest Territories as the stones that Tiffany and Harry Winston use. We get stones that have been certified by GIA itself, not just by someone who passed a few courses and puts the initials behind their name to “look official”. And we give our clients all of the original certification when they purchase the stone from us. We do this because GIA encountered a problem with “bad guys” submitting a genuine stone for certification and then claiming they lost the paperwork. GIA was, until very recently, reissuing papers as a courtesy. Since it was brought to their attention that substitutions were being made, they now require the stone to be resubmitted for regrading, at full price. That means no more sleight of hand on the stone and paperwork. It got so bad that even the laser engraving was being counterfeited. That will never be the case with a stone you get at Westdale Jewellers.

Now that machine is here, in Canada, at our suppliers in Toronto. Thanks to them we can all now spot the phonies easily and accurately … and they’re being found all over the place. Many of those “deep discount” dealers are getting charged with fraud. One or two phonies per hundred is a possibility. Seventy five percent phonies … the place is run by a fraud artist. Watch the news and see who disappears, who has price changes to reflect real costs, and see who goes to jail. It will be easy to tell who was a fraudster. If you have any concerns about whether your stone may be a phony, you can bring it in and we will submit it for you for testing for a small charge. So far, the machines are far too expensive for any regular appraisers to own one and they are limited to the largest wholesale houses.

It is always wisest to ask before you buy. Knowledge is free, quality is not. Diamonds and precious metals are international commodities, there are no “bargains” unless there is something wrong. If you have any questions, please come in for a chat …. before you spend your hard earned money.

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