The deception was exposed by GIA, which subsequently issued a laboratory alert and informed the "appropriate trading bodies."
The President and the Board of the Israel Diamond Exchange have issued a statement, expressing concern about reported suspicions that traders have distributed close to 500 high-quality, treated polished diamonds in the Israeli diamond trade, without disclosure, and with GIA diamond grading reports that misrepresented the diamonds' true identity.
The statement reads as follows:
During the evening hours (GMT +3) of May 12th, 2015, GIA (the Gemological Institute of America) issued a laboratory alert, noting that "GIA reasonably suspects that approximately 500 colorless to near colorless diamonds submitted primarily to our laboratory in Israel potentially were subjected to an undisclosed temporary treatment. GIA believes that the treatment is a process that temporarily masks the inherent color of the diamond and can lead to a higher grade. The color difference can be as much as three grades." (Read the full lab alert here).
On the morning of May 13, 2015, The Israel Diamond Exchange (IDE) called an extraordinary meeting of its board of directors, with the participation of the presidium of the Israel Diamond Manufacturers Association (IsDMA); the IDE's Head of Security, Israel Vantovsky; Police Commissioner (Ret.) Yossi Sedbon; and the IDE's Legal Counsel, Adv. Shmuel Ini.
Expressing indignation and resentment, the meeting resolved to identify the suspects who distributed close to 500 high-quality, polished diamonds, suspected to be treated, in the Israeli diamond trade, without disclosure, and with GIA diamond grading reports that misrepresented their true identity. The meeting therefore decided to act immediately and, in coordination with the relevant parties in the bourse and the appropriate state authorities, to take the needed measures.
To expedite the process, the board decided to delegate the handling of the case to a number of board members, together with the IDE's advisors and counsel.
The Exchange will provide further updates as they become available.
