Diamond Intelligence Briefing: Synthetic Diamond Certificate Fraudster Identified, Threat Not Over

25/02/2016 09:58

In a follow-up article to Chaim Even-Zohar's bombshell about CVD synthetic diamonds being sold on Alibaba with GIA natural diamond certificates, the Diamond Intelligence Briefing (DIB) identifies the name behind the fraud: Diwakar Dhyani. The supposed 'mastermind' left a cyber-trail - including a Facebook profile featuring a photo of the very same diamonds depicted in the fraudulent advertisement that appeared on Alibaba - allowing investigators to quickly identify him. Even-Zohar praises Alibaba for their swift and decisive action in removing the relevant advertisements, and in particular the leader of the investigation Matthew Bassiur, Alibaba's new Head of Global Intellectual Property Enforcement. Alibaba also swiftly identified similar 'problematic' listings and removed them. "Their removal from Alibaba's platforms inspires confidence in the online trading giant's approach to these diamond-industry predicaments. Both Diwakar Dhyani and all companies he is connected to have now been blacklisted from selling on any Alibaba platform.

This does not mean, however, that the threat is over. "The GIA and industry's issue with Alibaba may well be behind us," writes Even-Zohar, "but Dhyani and his partners are still trading through various other (mostly Indian) Internet platforms. The menace and the dangers have not yet been removed from the industry. The CVD diamond-cutting facilities have not yet been located - nor do we know at this point what producer produced the fraudulently marketed product. And, maybe most worrisome, we don't know how many hundreds or even thousands of genuine GIA natural diamond reports certifying synthetic products have already entered the diamond trade - or may still be used in the future." Nor, writes Even-Zohar, is there any certainty that Diwakar Dhyani us even the central figure in the affair, as he clearly had associates. He could be just a front man.

Furthermore, some of the reactions to the original article demonstrate that the phenomenon of certificate fraud is not unknown within the industry. One wries that, "We all knew that empty certificates were being sold in Hong Kong [for $70-$80]." Another wrote the GIA stating, "You have merely touched the tip of the iceberg. Many thousands of genuine certificates have been sold. The main selling point is Hong Kong. Chinese law requires that all polished [diamonds] sold in China must have a certificate issued by the lab owned by the former premier's wife. So the diamond trader doesn't use his GIA certificate. Essentially, the same applies for Tiffany's and other retailers who issue their own certificates and have no use for the GIA reports at that point. Instead of throwing these reports in the trash bin, they can be sold for $100 apiece. And they are!" The GIA, Alibaba and the FBI are all continuing their investigations into this fraudulent practice.