Ernie Blom: Eternal Vigilance Needed to Ensure Criminals Don't Succeed

Market Analysis

In this exclusive article, World Federation of Diamond Bourses (WFDB) President Ernie Blom responds to the story Chaim Even-Zohar, editor of Diamond Intelligence Briefs, published last week about a company offering CVD lab grown (synthetic) diamonds inscribed with the numbers of genuine GIA natural diamond grading certificates on Alibaba, a leading online global wholesale trading platform.

When I received a phone call last week from Chaim Even-Zohar alerting me to a story he was going publish about a company offering CVD diamonds for sale with GIA certificates, I must admit it took me more than a few seconds to take it all in. It would not be an exaggeration to say that I was simply stunned. I have been involved in the diamond industry for 40 years, and have seen a lot of unsavory practices in that time; shady deals and fraudulent behavior are nothing new, unfortunately, but this, as the saying goes, takes the biscuit.

This story blew me away for a number of reasons. The scale of the operation is horrific; the sheer unadulterated nerve is something few of us have ever seen before. And, of course, the impact it could have on global consumer confidence – so crucial to the diamond industry – is something I don’t even wish to imagine.

At a time when the diamond industry is facing some of the biggest challenges it has known for decades, when demand in China and emerging markets is declining and competition with high-tech gadgets increasing, the last thing we need is a scandal. The WFDB and the entire industry is working to send positive messages, revitalize generic marketing and spark the desire for diamonds in a new generation, and now we are confronted by this appalling illegality.

But it is not just the high-visibility leaders of the industry, the well-known luxury houses and giant miners that are vulnerable to this type of fraud. On the contrary, it could impact the diamond trade worldwide. Those who engage in this type of activity fail to consider those that rely on the diamond industry for their livelihoods: thousands of diamond miners and their families in Africa; over a million cutters and polishers in India, China and elsewhere in Asia.

Similarly, the fraudsters’ desire to turn a quick profit at any cost is a slap in the face to the many tens of thousands of people working in the legitimate diamond business throughout the world – administrators and marketers, shippers, insurers, the mom & pop jewelry shop and countless others.

I have said it several times over the past year or so: in a world where criminals are finding increasingly sophisticated ways of making a quick buck, we have to be on constant alert if we are to thwart them. They are ruthless, unscrupulous and have not the slightest hint of morality; their only motive is financial.

The WFDB recently introduced the theme for the World Diamond Congress to be held in Dubai in May: 'Transparency, Responsibility, Sustainability'. These concepts lie at the heart of the way our 25,000 members worldwide operate. Of course, the profit motive is critical to how we work – we are in business to make money – but not to make a profit at any cost. We seek to operate fairly, dealing with a special product and buying and selling in a transparent and honest way and with trust in those with whom we deal.

How very different to the operational methods of the people behind the CVD-GIA case.

Let me reiterate the WFDB's long-standing commitment to zero-tolerance for any undisclosed or falsely identified synthetic diamond trading. I would also like to express my deep appreciation to the Diamond Intelligence Briefs and to the trade press in general for seeking out and exposing fraudulent and criminal practices that endanger the confidence of consumers in our industry. Eternal vigilance is vital to ensure consumer confidence in diamonds and to guarantee the long-term health and security of our industry.