How was man made diamonds able to infiltrate the market as natural diamonds?
At Novita, we aim to expose the truth. With this article we reveal a genuine piece of history that very few outside diamond supply chain are privy to. As we are an established diamond wholesaler and have been involved in the industry for quite a while, naturally, we witnessed or participated in ‘unique’ situations and incidents, whether we wanted or not.
What Compelled us to Break the Silence?
It is important to share these stories with our valuable customers and readers, and we hope that you enjoy and come out with a greater understanding and appreciation of the diamond business. To protect ourselves against possible legal actions, we will not be using real names. However, all other details will be retold exactly as they happened.
What Caused the Unsettling Atmosphere in the Diamond Industry?
There was an underlying feeling amongst many that something major was unfolding among the global diamond wholesaler business four years ago. More substantial and concrete news soon came to us through our connections to the Diamond Wholesaler Conglomerate. For those not well versed in the inner working of the diamond world, the Conglomerate is kind of a big deal; like OPEC, where the price of oil is set, the Conglomerate is where all the wholesale prices of diamonds are decided and fixed. They are at the top of the diamond food chain and are depended upon by all diamond miners, cutters, polishers, exporters, importers and wholesalers. Therefore, any news coming from them had to have merit.
So, what was causing everyone to feel so unsettled? Well, it the news that a fraud of massive scope was being committed by the biggest diamond wholesaler in the world located in Russia.
How did the Russian diamond wholesaler fraud begin?
For over 19 years, Lab grown diamonds have been in market. However, the market share and customer appeal of lab diamonds were quite limited, mainly due to their colour: they were always yellow, while costing the same as the clear mined ones. Nevertheless, this would not be the case for much longer.
Around 7 years ago, the bombshell exposure revealed that the largest Russian diamond wholesaler was involved in a massive fraud operation where countless colourless (white) lab grown diamonds were passed through the most reputable laboratory in the world. The laboratory failed to catch on that they were lab grown, since the current understanding at that time was that lab diamonds were yellow, and therefore, unwittingly certified them as mined diamonds, thus inadvertently increasing their market value.
The scheme the Russian wholesaler to profit massively while flooding the market with lab created diamonds indistinguishable from mined ones. Eventually, when the certification lab realized that something was amiss, they immediately notified the conglomerate, and the operation was put to an end.