In a guest memo by Chaim Even-Zohar, Editor Emeritus of Diamond Intelligence Briefs, the longstanding issue of fraudulent certificates in the diamond industry is once again brought to light. Nearly 10 years ago, Even-Zohar exposed a significant fraud where synthetic diamonds were being sold with GIA natural diamond certificates. This scheme, conducted through platforms like Alibaba, was a blatant attack on the integrity of diamond certifications, allowing synthetic diamonds to be passed off as natural.
Even-Zohar revisits this issue after hearing about several cases of lab-grown diamonds being fraudulently paired with GIA certificates, as mentioned by GIA Executive Vice President Tom Moses in an interview with the World Federation of Diamond Bourses. While the problem is reportedly not widespread, it remains a significant concern.
One critical aspect of this issue is the increasing availability of outdated GIA certificates. These certificates, once paired with a diamond, are valuable and could be misused if they are not securely handled. Even-Zohar argues that the industry could largely prevent this problem by taking a simple step: shredding old and unused certificates.
Why Shred Certificates?
Diamonds are often sold with multiple certificates, especially when they are part of larger pieces like tennis bracelets. However, once the certificate is detached from the diamond it originally described, it loses its value. Worse, when these certificates are paired with the wrong diamonds, it poses a legal and reputational risk for the original owner. To mitigate this, Even-Zohar urges the industry to make the destruction of unused certificates a regular practice.
Even-Zohar's suggestion is clear: diamantaires and jewelers should destroy old certificates to reduce the risk of them being fraudulently used. He also proposes that the GIA allow companies to submit “shredding reports” to confirm that certificates have been destroyed, which could help remove them from the GIA’s online verification tool and reduce the likelihood of them being used in fraudulent activities.
The Benefits of Shredding
By shredding old certificates, businesses can prevent temptation and avoid legal liabilities. It removes the opportunity for employees to sell outdated certificates for personal gain and protects a company’s reputation by ensuring that fraud does not affect its operations. Additionally, companies can enhance their internal controls and reduce the risk of legal costs and reputational damage in the event of fraud.
In conclusion, Even-Zohar's call to action is simple yet impactful: "Shred, baby, shred!" By taking this easy step, the diamond industry can help prevent fraud, protect its integrity, and ensure that the trust in diamond certifications remains strong.