Diamond Fraud at Crater of Diamonds

I always enjoy hearing about diamond discovers at Crater of Diamonds State Park in Murfreesboro, Arkansas, the only diamond mine in the world where the public can keep the diamonds they find.

However, the most recent article I read was a took some of the shine from a place that has pleased thousands of adults and children who have spend hours searching for the elusive diamond they could take home and show their friends. The investigative article “Arkansas Diamond Fraud” reports on the diamond sales by Eric Blake (see my previous blog article on Eric Blake).

Eric Blake and his family visited Crater of Diamonds in October 2007 and supposedly discovered a large number of diamonds. He then created a webpage and sold diamonds he advertised as being from the Arkansas State Park. He also sold diamonds on eBay that were reported to be from the Arkansas “public” diamond mine. However, investigative research uncovered the fact that Eric Blake had purchased diamonds from India prior to his trip to Crater of Diamonds. Descriptions and photos of the diamonds ordered from India matched the weights and photos of diamonds supposedly “found” at Crater of Diamonds.

You might wonder why someone would buy diamonds in India and claim they came from Arkansas. The answer is simple, greed. Because of the rarity and uniqueness of diamonds from Crater of Diamonds, shoppers are willing to pay a price premium for the diamonds found in the United States. The Arkansas diamonds are often uniquely formed crystals that often look like drops of glass, unlike the flat, cube or octahedron surfaces typically found in most diamond mines. However, there are some sources around the world, like the Panna Mines in India, which produce diamond crystal similar in appearance to the crystals found in Arkansas. Since the diamonds from India are more abundant than those from Arkansas and do not have the celebrity status of diamonds found at Crater of Diamonds, the price of Indian diamonds can be less than a tenth the price of diamonds from Arkansas. With a ten-fold profit margin, “planting” Indian diamonds in Arkansas was a profitable diamond scam.

While I am sure that the justice system and angry victims will take care of Eric Blake, but I do have concern for all the future visitors to Crater of Diamonds. I hope their fun and enjoyment is not diminished by one person’s diamond scam. For all those people who have found or purchased authentic diamonds from Crater of Diamonds, they should take comfort in the fact that they really to have unique and valuable diamonds. Crater of Diamonds State Park remains a treasure chest of diamonds waiting to be discovered.

Letseng Diamond Mine Expands Production

Gem Diamond, who owns 70% of Letseng along with the Government of the Kingdom of Lesotho, reported an 81% increase in annual diamond sale in 2007 with $152 million compared to $83.9 million in 2006. Because of the productive operations last year, Gem Diamonds is doubling production this year when it starts its second plant in June. The new plant will process ore when it begins mining the main kimberlite pipe adjacent to the satellite pipe, which has been the source of some of the largest diamonds discovered in the world.

Letseng is renowned for its large white diamond finds and the large diamonds provide about 80% of mine revenues. With approximately 85% of Letseng production being gem quality diamonds, an exceptional 14-20% of those stones are over 10.8 carats. No other diamond mine can match the large-stone production of Letseng. As a result, Gem Diamonds is investing in facilities to take advantage of the unquenchable world thirst for large diamonds and enable them to exploit the 25-30 years of mine life provided by development of the main pipe.

Gemesis Working on Other Colors of Synthetic Diamonds

Gemesis, the Florida-based synthetic diamond company, currently only produces the laboratory grown diamonds in yellow and orange colors. The company is working on production techniques to produced pink and blue synthetic diamonds. It hopes to have that process developed by the end of this year. Gemesis is also working on process that would eventually allow it to grow white diamond crystals in the 5 to 10 carat range that are in greater demand worldwide. These larger sized synthetic diamonds are probably at least three years away from commercial production.

Gemesis has recently updated their web site to provide educational information about their company and synthetic diamonds, including the jewelry brands carrying Gemesis Cultured Diamonds.

PrinceCut Diamond Shape

For diamond shoppers who like the shape of the emerald cut but would like to have more sparkle, yet not as much as the radiant cut, the PrinceCut diamond shape is a great option.

The PrinceCut, patented by the Avi Paz Group, was designed to be an improvement on the traditional emerald cut. With 111 facets, compared to the emerald cut’s 57 facets, the PrinceCut has a much greater brightness and fire. The PrinceCut® received international patents and a U.S. patent in August 2000.

The mesmerizing facet pattern of the PrinceCut diamond produces an ever-changing kaleidoscope of alternating reflections and flashes of rainbow colors. The rectangular shape is stunning as a solitaire setting but also is beautiful in a three-stone ring.

Are Non-Certified Diamonds Cheaper?

This week a local client told us that she was shopping at a jewelry store for diamond stud earrings. She asked for certified diamonds and the jewelry storeowner told her not to get certified diamonds because they were so much more expensive. He said it was his job to save her money and non-certified diamonds were the way to do that.

Here is what the jeweler forgot to tell the shopper. The price difference between GIA graded diamonds and non-certified diamonds should only be the cost of getting the diamonds graded. This is only about $50 to $100 for most diamonds and depends on the carat weight of the diamond. Any remaining price difference can usually be attributed to the non-certified diamond being a different quality than the corresponding GIA graded diamond. In other words, the true quality is not as advertised or there are attributes such as poor cut, laser drilling, fracture filling, or fluorescence that have not been disclosed. Typically, it is the color and cut of the diamond that are lower because those tend to be harder for shoppers to identify under the intense jewelry store spotlights.

Look at it from the jeweler’s perspective. If they could price the diamonds a thousand dollars higher with a GIA grading report, they would. Instead, they buy cheaper, lower quality diamonds and advertise them as being something better, or neglect to disclose all the characteristics of the diamond that impact value. The jeweler is counting on the shopper wanting a “deal” rather than the truth.

If a client really wants to know the quality of the diamonds they are purchasing, we recommend they purchase a GIA grade diamond, which provides the most accurate description of color, clarity, cut, carat weight, measurements, fluorescence, and any treatments.