Because diamonds are so precious, owners, dealers and manufacturers religiously protect them. Their rarity is priceless in some situations. If you were like the diamond dealer located in New York, though, you would rather have the money that diamond is worth rather than spending your time selling the diamond. Alternatively, could you do both? In a recent news article that hit the newswires on May 20th, a diamond dealer working in New York decided to report some one million dollars worth of diamonds missing. The lost diamonds were highly valued and the insurance on them was well protecting them. The Manhattan District Attorney Robert Morgenthau supposedly reported the fraudulent claim. Imagine contacting your insurance agent and letting them know you lost some $1 million worth of diamonds.
The man’s story is much deeper, though. According to the District Attorney, the man stole the diamonds, more than $3 million in diamonds consigned to him (the alleged thief) from other dealers. With this done, he then claimed that he was the victim of robbery of the diamonds after they had transferred hands. He made a false claim of robbery, according to the police. The robbery never happened.
The District Attorney was able to charge the man with Grand Larceny as well as a few other charges including criminal possession of stolen property, falsely reporting an incident and insurance fraud. Those charges are pending.
How He Did It
You may be wondering which dealers would be willing to give this man $3 million in diamonds. The key thing about this story is that it was not a onetime thing. Rather, the investigation into the incident revealed that the man had contacted and worked with over 45 different dealers of diamonds in the area. Over the course of two months, in the spring of 2007, he was able to get $3 million worth of diamonds from these dealers. He was able to do so without detection of doing anything wrong at the time.
Then, on the 13th of June in 2007, the man who allegedly made the theft happen filed a complaint with the 5th District Police Precinct. He told police his story of what happened. According to him, he was visiting various jewelry stores in the region, which happened to be Canal Street in the Chinatown neighborhood. As he walked through the area, he says someone came up behind him and stole the bag of diamonds. In the bag,he claimed, where $1 million worth of diamonds. The leather bag, as it happened to be, was stolen as the person sprayed pepper spray in his face. Because of the spraying of the pepper spray, the diamond thief never saw the person’s face and therefore could not provide a sketch or any information about what the individual looked like.
From here, he filed a claim with the insurance company in which he had a policy that covered him from robbery of the diamonds. The insurance policy, though designed to provide for robbery, only provided a $100,000 limit. Prosecutors said the man told them that the diamonds that were stolen were valued quite a bit higher than that amount. The man then provided both the insurance company as well as the police with a consignment memorandum that showed the diamonds he had in his possession, supposedly.
Then They Catch Him
While he might have gotten away with his crime, he did himself in when police arrived at his home, which also was the home of his parents. Policed searched there and other locations. When they approached his parent’s home, police saw the man run into the bedroom and into his bedroom closet. When they found him there, he has four diamonds in his possession. In addition, they found more than $12,000 worth of cash in the closet. A thorough investigation of the home revealed another four diamonds, though the values of those diamonds have not been determined.
The diamonds that were within the home were not all diamonds that he claimed someone to have stolen. Two of them, though, were. Detectives determined that the two diamonds were those that matched the consignment memoranda that he has provided to detectives. The diamonds that he claimed someone had stole were in fact those that he was selling, allegedly, out of his home.
Police will continue to investigate the case. There is still concern about the remaining missing diamonds and the discrepancy between what area dealers say he received in terms of diamonds. As the investigation continues, there is no doubt that more information will be uncovered about the case.
Diamond insurance fraud of this scale is rare, but because so many details were misguided here, there is no doubt that police will determine the result with assurance.
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