INSIDER SECRETS TO

OND
EALING

MAXIMILLIAN S. CALLAHAN
Copnev Spuaf®
INSIDER SECRETS TO

JAAA.0JSJ D
PAT IMT
JEmlli IN vj
How Real Money Is Made

MAXIMILLIAN S. CALLAHAN

PALADIN PRESS
BOULDER, COLORADO
Insider Secrets to Diamond Dealing:
How Real Money is Made
by Maximillian S. Callahan

Copyright © 1996 by Maximillian S. Callahan

ISBN 0-87364-876-5
Printed in the United States of America

Published by Paladin Press, a division of

Paladin Enterprises, Inc., P.O. Box 1307,
Boulder, Colorado 80306, USA.
(303) 443-7250

Direct inquiries and/or orders to the above address.

All rights reserved. Except for use in a review, no

portion of this book may be reproduced in any form
without the express written permission of the publisher.

Neither the author nor the publisher assumes

any responsibility for the use or misuse of
information contained in this book.
 CONTENTS

Foreword v

Section One

An Introduction—People, Places, and Politics 1

Chapter One: People 7
Chapter Two: Places 15
Chapter Three: DeBeers 35

Section Two

A Diamond Mover's Handbook 41

Chapter Four: Diamonds—The Basic Product 43
Chapter Five: Getting the "Real Thing" 77
Chapter Six: The Trip 89
Chapter Seven: Moving the Goods 103

The Last Worji 111

Glossary 113
Appendix A: Measuring for Weight 139
Appendix B: Concealment 143
Appendix C: Dealing with Diamond Papers 155

♦
 To my writing mentors, J.T., L.C., and T.P.—and to my
editor, Karen Pochert, who corrected all the bad writing
habits the other three tried to drum out of me.
 FOREWORD

Pliny the Elder, in the first century of the com¬

mon era, called diamonds "the most valuable, not only
of precious stones, but of all things in this world." Who
among us can argue with Pliny? A diamond is a piece of
rock, a lump of carbon so small that I can send one
through the mail using a single postage stamp, and yet so
valuable that it would pay for purchasing, not to men¬
tion furnishing, a fine home in the United States. In
other parts of the world the value of even a single small
stone may be many times the total of wages a worker
could hope to receive throughout his entire life.
Anything so valuable gets creative juices flowing in
some people. It starts palms itching. The thought of that
kind of money makes people want to get on the band¬
wagon for the golden bucks they feel are just over the
hill, in that pot that lies at the point where the end of the
rainbow touches earth.
So why doesn't everybody give up jobs at the local
fast-food restaurant or take a long vacation from a rust-
 INSIDER SECRETS TO DIAMOND DEALING

belt factory and plunge into the world of diamond deal¬

ers and smugglers?
Well . . . the diamond business isn't that easy—
which is not to say that it is that hard, either. It's more
correct to call it confusing. And it takes a certain type of
person to become involved—and survive—in a cutthroat
world where the businessmen in silk suits are arguably
even tougher than the ruffian smugglers who deal in
drugs and people.
The type of person who can survive, and even
thrive, in the diamond business is someone who is gre¬
garious and outgoing. He is a person who can make
friends easily and get them to talk about themselves and
the things they know about. But that same person has to
be taciturn enough to know when not to talk, what not
to say, while behaving in such a way that people think he
is wise rather than speechless.
The people who profit from this trade seem even hard¬
er than the stones they sell—and remember that diamonds
are known as the hardest natural material in the world. In
this book we'll explore the yin and yang of the business, for
the world of diamonds is a business. It is a business that has
about the same relationship to the mushy sentiment spread
across the pages of bridal magazines that a graffiti artist has
to a Michaelangelo or a Da Vinci.
The diamond business has profit margins, startup
companies, and monopolies. There are pick-and-shovel
men and executive boards. There is boredom galore, but
there is also what some might call excitement. And
there is certainly danger.
This book has been carefully put together to start
you on the way to acquiring the absolute basics of the
business. And any examination of the diamond business
demands a careful look at smuggling. A large part of the
 FOREWORD

world's diamond stocks is smuggled at one time or

another. Equipment requirements of the diamond trader,
such as loupes and gauges, will be referenced as needed.
Many basic diamond terms, such as the parts of a
diamond, are covered in the text. There is also a glossary
at the end dealing with the terminology and argot of the
business. Pay close attention to that; it may be the most
important part of this book. Many phrases that are not
covered in the text are found there. Except for diamond
couriers, who simply pick up a package at one place and
leave it at another, no one has any chance of success in
this business if he doesn't know the language that is
peculiar to the diamond trade. A failure to understand
the terms identifies the person as a neophyte. It is like
wearing a sign saying "take me for all I'm worth." Given
the cutthroat attitude that exists in the diamond busi¬
ness, it's a sure bet someone will.
Finally, there are four terms you need to know bet¬
ter than your own name. You'll have to learn to recite
the "Four Cs" in your sleep:
• Color
• Cut
• Clarity
• Carat weight
These are the four things that go into a diamond's
value. They all work together. None is really more impor¬
tant than the other. A baseball-sized diamond, but one
that is so flawed and of such poor clarity that it grades out
as an industrial stone, may well be little more than a
paperweight that will make a good conversation piece.
Although this book will cover much of what you
need to know about the cold, hard business of diamonds,
there is no sense in pretending that it will teach you
everything. No one learns how to drive a car or fly a
 INSIDER SECRETS TO DIAMOND DEALING

plane simply by reading a book—you have to press the

pedal and learn how to lean out a throttle. The diamond
business is a hands-on business, but, most important, it
is a brain-on business.
This, and every other book ever written about dia¬
monds, is only a starting point. If you're interested in
going further in this business, you'll have to cajole oth¬
ers to teach you; you'll need to work for a chance to
learn. You'll be knocking on jewelers' doors in July ask¬
ing them to keep you in mind for a sales position during
the always busy Christmas season, when they'll need
part-time help. In the diamond business, everybody has
to serve an apprenticeship and learn from their mistakes.
Should you go on, you too will have to make your costly
errors as you negotiate the learning curve.
But there is one mistake you should never make: never
admit to smuggling so much as a button. Never. Ever.
I've never smuggled anything. You haven't either.
Remember, if you feel an overwhelming desire to confess
your shame and guilt, you can admit to killing Lizzie
Borden's parents when Customs officials interrogate
you. But remember, you never smuggled anything.
Never. Ever. If you ever admit to so much as smuggling a
matchstick, you'll be in the kind of trouble that neither
this book, nor any other, can get you out of.
 SECTION ONE i*$V:.

sm |

tpiil
... - ‘ - _ ;
:
■; : :
mmm

ill
'Z'&'Z

»WF&aSsg&x

:
>Cv:-

"
&ssm i

The diamond trade is a big business. In a normal

year, world production of diamonds averages 100 million
carats a year, though only about 15 percent of this is in
gem-quality stones.
The gemstones are sorted into about 5,000 different
categories. They are valued on the basis of size, clarity,
shape, and color. Retail sales of polished-diamond jewel¬
ry, another market entirely, totals perhaps $40 billion
 INSIDER SECRETS TO DIAMOND DEALING

annually. It's not only a big business, it's a burgeoning

business, a growth industry. In the mid-1990s, diamond
jewelry sales worldwide totaled about $42 billion, up
from $21.1 billion a decade before.
The diamond trade is as hard as it is big. It is even
harder than the stones that are traded, cleaved, bruted,
and polished. The would-be diamond smuggler or self-
declared diamond dealer who wanders into this world
and is not armed with extensive knowledge is certain to
regret it. Some who try to go head to head with dictators
and criminal cartels, such as the Russian mafia, don't
live long enough to reflect on their mistakes.
"Diamonds are forever" was a phrase that a public
relations whiz kid pitched in the 1930s to improve dia¬
mond sales during the Depression slump. The phrase
ignored the reality of both facts and history, but it
worked then. It still sells diamonds now. While the sales
pitch may not be true, and diamonds are not forever, the
reality is that the diamond business is forever dangerous.
As with most things in life, there's a right way and a
wrong way to do things in the diamond business. For
instance, time plays a role in the diamond merchant's
work. Time is one factor that movers of stones have to be
aware of. Christmas is a pivotal diamond season and
affects the trade. As an example, there is always a post-
Christmas restocking demand in the United States,
which is the world's largest market for polished stones.
There is heavy demand, and heavy traffic, in fashioned
stones before Christmas. The merchant must be pre¬
pared to deal with that rush and be ready to take a "vaca¬
tion" during the slack times. For some dealers and
movers of diamonds, it is important to know that
DeBeers "sights," or private offerings, of uncut stones
tend to be concentrated at the beginning of the year and
 PEOPLE, PLACES, AND POLITICS

then trail off. In that way, people can plan the year, with
the stones from the sights in January and February
appearing as polished goods in the summer so that they
will be in the shops for Christmas.
As is true in other aspects of life, it is fair to say that
in the diamond business the average person can't make
much money. There are no such things as legitimate get-
rich-quick schemes. Lose your shirt, even lose your free¬
dom or your life—that's what can happen to the man or
woman on the street who tries to crack the code on some
aspects of this business. It takes a special kind of person,
a special kind of determination, and a special kind of
knowledge to succeed.
The diamond trade, both legal and illicit, is based to
a great extent on geology, politics, and economics. In
general, the facts of where diamonds come from, as well
as where they go to, involve a mix of the three. This
recipe for an "information stew" is important to under¬
stand, however, because it sets the diamond dealer's
table of supply and demand.
Sellers and smugglers of diamonds always have to
take into account the buyer, and the buyers are mostly
found in the industrialized and industrializing world.
For instance, Japan and the United States have the
economic wherewithal needed to be a major user of
gem diamonds. These countries have political and
social systems that encourage such use. However, any
time there are major stock market drops, moves to
impose higher taxes on luxury goods, or efforts to pile
additional taxes on the incomes of rich people, the dia¬
mond market can and does fall like a stone. In the pol¬
ished-diamonds market, the United States has
remained the main buyer despite the recent economic
roller coaster ride. In Japan, when the fall of the Nikkei
 INSIDER SECRETS TO DIAMOND DEALING

index led to a loss of consumer confidence, the eco¬

nomic battering negatively affected the sale of all luxu¬
ry goods, including polished diamonds. Watching glob¬
al economics becomes one of the main jobs of every
international diamond dealer and mover.
Apart from their aesthetic beauty and value, dia¬
monds have a very practical side. They can be used to
make wire for industry and to sharpen machine tools.
Their importance to industry is so great that they have
been a major item in the strategic stockpiles of many
First World nations, though concern over a lack of indus¬
trial diamonds has declined with the development of
synthetic stones. Nonetheless, some diamond movers
and traders have found that there can be a good niche
market in dealing industrial-grade stones.
First World countries aren't the only diamond users.
China is one diamond market that is bucking the global
trend; it is experiencing dramatic growth in sales from a
low base. While China remains an anomaly in terms of
markets, it is being watched by diamond movers of all
types with intense interest. A land of more than a billion
people, China, many speculate, will turn into one of the
world's major markets at the millennium.
Second and Third World countries that are attempt¬
ing to industrialize, or reindustrialize, also need lesser-
quality diamonds for a variety of uses. Industrialized and
industrializing countries, east and west, are thus a mag¬
net for certain types and grades of diamonds.
Geology is another key to the diamond trade. Some
countries that have very little use for diamonds—
nations where the people would be better off if they got
sufficient quantities of food and textiles out of their land
instead of loads of inedible stones—are sources of dia¬
monds. These countries serve as the first stepping stone
 PEOPLE, PLACES, AND POLITICS

on the long path that a diamond takes as it travels from

clay envelope to glittering jewel at the opera. And that's
all based on geology.
South Africa is often thought of as the source of dia¬
monds. But the reality is that there is any number of
sources, from malaria-ridden Zaire and Angola to the
frozen wastes of Russia and Canada. And the creative
juices of would-be smugglers and traders are flowing in
places like Angola, Zaire, Canada, and Russia. So too is
the flow of diamonds-or soon will be.
.
 CHAPTER

PEOPLE

Both dealers and smugglers of diamonds do it for

a couple of very general reasons: they expect to make
money and receive satisfaction from it. But diamond
smuggling, in particular, is done for a variety of more
specific reasons.
Greed is one. And in the United States there isn't
much reason to smuggle other than sheer greed: the
country's American diamond dealers are an obvious
group to profit from smuggling. Their reasons almost
invariably involve greed.
When U.S. dealers smuggle they are almost
always involved in a tax-avoidance scheme. The dia¬
mond fraternity—and it is literally a fraternity,-
women are systematically excluded—seldom does its
own "mule" work. Diamond dealers rarely put them¬
selves at personal risk. When they want to smuggle in
goods physically, they hire others to take the risks.
They will normally set up the purchase abroad and
simply use couriers to carry their illicit parcels. These
 INSIDER SECRETS TO DIAMOND DEALING

couriers are often aircraft flight crews traveling inter¬

national routes.
Actually, most diamond dealers usually prefer using
semilegal invoicing scams, which are safer than employ¬
ing couriers who will physically smuggle in the goods.
Even if the scams are detected by the authorities, that
seldom results in anything worse than the loss of the
stones. It's hard for prosecutors to prove that someone
intended to misidentify stones if they are off only one or
two clarity grades or a color grade. A couple of clarity and
color grades involve subtle, and often visually impercep¬
tible, physical differences that make a great deal of differ¬
ence in both price and declared value at a border. But
juries in the United States, working under the rule that
guilt has to be proven beyond a reasonable doubt, find it
easy to believe that someone else—a diamond grader
somewhere—had a bad night and simply made mistakes
in detecting differences in diamonds. That is especially
true since these are differences that the jurors can't per¬
ceive. A good defense lawyer can generally throw up
enough questions, raise enough doubts, that most people
engaging in well-thought-out invoice smuggling will
never be convicted. It's well to keep in mind that prose¬
cutors in the United States seldom pursue cases they
can't win. That's the bottom line that makes invoicing
techniques relatively safe.
Let's make one thing clear here: Without having a
diamond dealer available at some point in the chain,
smuggling is always a losing scheme. The diamond
smuggler, of whatever type, either has to be a dealer or
have access to a dealer somewhere to dispose of the "sub¬
marine goods."
As a result of that clear fact, the importance of
knowing the argot of the diamond-dealing fraternity can-
 PEOPLE

not be overemphasized. It is a tight fraternity. The

knowledge of diamonds and their specialized language is
the password. If you don't know the code, you're in for an
icy reception.
Drug dealers also do some diamond smuggling,
though surprisingly little considering the amount of
"value"—some call it money—they need to move from
one place to another. And value is an important concept
in diamond dealing and smuggling. If he doesn't have an
almost intuitive understanding of what value is, the
would-be diamond dealer or smuggler might as well go to
Las Vegas and play the slots—it's a better and safer way
to spend time and money.
Value is the way that people store work or effort.
Money, also called currency, is one form of value, but
there are many currencies that have no real value. Inflation
is a fact of life that decreases value in currencies. Drugs,
too, have "value" and are traded for other things that are
"valuable." However, the value of drugs is often unstable,
depending on their availability at any given time.
Historically, diamonds and gold have represented a fairly
stable measure of value. As a result, over the millennia
diamonds and gold have become commodities that can be
transported from one place to the other with the expecta¬
tion that a week, a month, or a year later they will have
relatively the same value. For that reason, both diamonds
and gold are recognized as a sort of international supercur¬
rency. Interestingly, most drug dealers find the downside
of diamond smuggling—the need to have expertise to pur¬
chase the stones and to convert the stones to cash at the
other end—to be too much of a hassle. Drug dealers have a
gambler's mind set that usually brings them to take their
chances with movements of cash or with sophisticated
money-laundering schemes.
 INSIDER SECRETS TO DIAMOND DEALING

Refugees, or people other than drug smugglers fac¬

ing stringent currency transfer restrictions, are perhaps
the best candidates to successfully engage in nonprofes¬
sional diamond smuggling. That is because, although the
risk of getting caught at diamond smuggling is often tol¬
erably low, the chance for a nonprofessional to recover
the total value at the sale end of the pipeline is equally
low. Refugees aren't trying to get rich; they're simply try¬
ing to salvage any small part of their lives and life-style.
They seldom have any outside help and must rely on
their wits, good sense, and luck. Refugees don't need to
make a profit, or even have a 100-percent recovery of
value, to count their effort as a success. And it is well
that is the case. The diamond market is structured in
such a way that disposing of smuggled diamonds at a
profit is practically impossible for the nonprofessional
(i.e., someone who is not a member of the diamond fra¬
ternity). There is a great deal of truth in that famous
scene from Casablanca where a refugee pleads for just a
little more money and is told "Madame, diamonds are a
drug on the market right now."
There are other people, though not refugees, who
use diamonds as means of evading currency export
restrictions. And there have been agents of some govern¬
ments who carry diamonds as a means of transporting
value. During the Cold War, government agents for the
world powers did make some payments and money
transfers through smuggled diamonds. In all honesty, the
conversion process is, and was, so onerous that this
method of value transfer is pretty far down the preferred
list. In addition, diamonds are often traceable. Diamond
experts, looking at a selection of stones from the same
location, can often tell the point of origin. For instance,
Russian diamonds tend to stand out when experts view
 PEOPLE

them because of the type of inclusions (internal flaws) in

the stones. During the Cold War, the former Soviet
Union sometimes used diamonds for financing guerrilla
wars abroad. But even the Soviets found that there were
difficulties inherent in the conversion of diamonds to
needed cash.
Diamonds normally must be converted to some
other form of value before they can be put to use by polit¬
ical or insurgent groups. Few arms dealers, for instance,
will take diamonds in a direct trade. A guy who knows
how to chamber an AK-47 round doesn't necessarily
understand inclusions in diamonds—and has little inter¬
est in finding out about them. People being paid off in
cash know or think they know what they've got in their
hand; most people wouldn't know for certain whether a
shiny stone was a diamond or not. They know they don't
know, and they prefer not to deal with that problem.
One set of criminals is very much into diamond
smuggling, but very few smugglers will ever be handling
their hot ice. Jewelry thieves tend to handle their own
transportation, from start to finish. They don't trust any¬
one to handle their stuff, remembering how they came in
possession of it to start with. And they have to move
their booty somewhere else far away so that a potential
buyer is not going to know where the goods came from.
Jewelry thieves use many different methods to
acquire their stones, but for the most part the knowl¬
edgeable thieves never carry weapons or use violence.
When the "hit" is a nonviolent theft crime it is not treat¬
ed as seriously. Some work like shoplifters. In some
cases, a person will distract the clerk while the others
clean out jewelry cases. At other times, the thieves fol¬
low jewelry salesmen and steal jewels from their cars.
Some jewel thieves are expert burglars. A few are simple
 INSIDER SECRETS TO DIAMOND DEALING

robbers. People in the last category generally get caught,

often while trying to peddle the hot ice elsewhere. The
diamond business is a fraternity, and people who use
guns on your "brothers" are beyond the pale.
The final major category of smuggler is the "person¬
al use" smuggler. These people almost always take their
own risks. A good many of them get caught, too.
Personal-use smugglers often buy a stone overseas, then
bring it back without declaring it, hoping they can shave
a few bucks off their customs bill. Personal-use smug¬
gling is quite common—and often detected. Frankly, per¬
sonal use smuggling is not worth the hassle if you get
caught. For most people it is hardly worth the agitation
and worry involved in the process. But some people
enjoy it for the rush.
Although the only really legitimate reason to smug¬
gle is found among refugees or people facing draconian
currency transfer restrictions, a lot of other people do
smuggle diamonds.
"They're so small and pretty, how could you not
smuggle them?" I remember that was the gushing com¬
ment of a lady who is now very much in trouble with
U.S. Customs over one set of smuggled gems that was
detected.
Indeed diamonds, which are crystallized carbon, are
small and beautiful, and they are valuable.
Diamonds are a concentrated form of wealth, value,
or simple sweat—however you want to look at it. There
are no other high-value commodities that are so easily
transportable—not to mention concealable—as the
gemstone triumvirate: diamonds, rubies, and emeralds.
Thus diamond smuggling is a relatively safe form of
smuggling. Gold, platinum, or other high-value metals
are heavy, which means they are also relatively bulky.
 PEOPLE

Cash takes up far more volume and weight than its

equivalent value in good-quality diamonds. Cash and
precious metals are also more difficult to disguise from
the prying eyes of Customs agents than are diamonds.
As much as 15 percent of all existing diamonds have
been smuggled at one time or another, which gives some
idea of the temptation of diamond smuggling—and how
often people succumb to it. The draw is that one or two
of the right kind of stones, smuggled and sold, can in fact
set you up for life. But even though the possibilities seem
endless, the likelihood of making a major windfall from
diamond smuggling is really quite different.
Most diamond smugglers make only pocket change.
They don't get rich quick; in fact, their work can easily
result in major losses. For most smugglers, the profit is
money that supplements their day-to-day jobs and sup¬
plants the day-to-day drudgery of their lives, injecting an
adrenaline rush into a boiogna-sandwiches-for-lunch-
again pace of living. Yes, many smugglers do it primarily
for the excitement, the thrill of beating the odds, the
enjoyment of beating "the man."
But in the end, if they keep it up, they all get caught.
Sooner or later they make a serious mistake in judgment,
or someone gets curious. The game will be over, and
arrest and big legal fees can follow.
That's what happened to a particular lady smuggler.
She did well, so long as contacts abroad mailed her sin¬
gle, small stones in letters. It was only when she tried a
new tactic designed to increase her volume and her profit
that she was caught.
 CHAPTER

PLACES

Any diamond smuggler has to be up to date on a

VARIETY OF ENVIRONMENTS THAT WILL AFFECT HIM. There is
the diamond market as a whole, the DeBeers monopoly,
and the individual governments involved. The most
important key to the diamond market is places to buy
and sell and back doors for escape.
Diamond dealing and smuggling starts at the min¬
ing centers—the starting point in the diamond market.
Diamonds don't grow on trees, and, except for some
extremely rare and equally tiny crystals found in mete¬
orites, they don't drop from the sky.
Although "scientists" at different times have
claimed that diamonds were formed by everything from
lightning strikes to sea creatures, the most recent think¬
ing has it that they are created at about 75 to 120 miles
beneath the crust of the earth in certain types of molten
rock. They are thrust up from what scientists sometimes
call diamond stability fields, by volcanic action. Only
here, so far underground that the rocks are plastic, are
 INSIDER SECRETS TO DIAMOND DEALING

the temperatures and pressures naturally conducive to

carbon atoms forming themselves into the cubic, or iso¬
metric, form of crystals that we call diamonds.
How, then, do diamonds go up through dozens of
miles of rock and earth? The exact process is not com¬
pletely known, but it involves what we normally think
of as volcanic activity—the molten rock carrying the dia¬
monds oozes upward into and through the earth's crust.
This molten diamond-bearing rock solidifies near the
surface. It is a little like a spike being driven from the
center of the earth toward the surface. The spike of dia¬
mond-bearing rock is called a diamond pipe.
Diamond pipes can be mined either by open-pit
methods or through tunnels drilled into the pipes, which
are generally made of rock known as kimberlite or 1am-
proite. The pipes themselves are known to geologists and
diamond hunters as primary deposits.
Surprisingly, kimberlite is not a very tough rock; in
fact, wind, rain, sunlight, and other climatic conditions
break this diamond-bearing rock down rather quickly. In
some parts of the world the diamond pipes—often the
cores of mountains—have eroded away. The diamonds
that were in those now-eroded pipes have been washed
into rivers and streams. Often the stones have been
rolled up into sands that are, or were formerly, the ocean
shore or bottom. These secondary concentrations along
streams, shorelines, and former seabeds are known as
alluvial deposits, which may remain in sand and mud
(marine deposits), or, in some cases, the sediment may
turn into rock. It is alluvial deposits that contain the
highest percentage of gem-quality diamonds. There are
differing explanations for this, but the most likely one is
that badly flawed diamonds are most easily broken and
shattered in rivers and streams,- the diamonds that sur-
 PLACES

vive the natural stone tumbler effect of rivers and ocean

tides are generally those that have the fewest imperfec¬
tions and flaws. Alluvial and marine deposits—because
they are concentrations of perhaps whole diamond
pipes—generally are extremely rich. There are more
carats of diamonds per ton of rock or sand than in dia¬
mond pipes.
There is a new theory—one that is of great impor¬
tance to those prospecting for new diamond sources—
that there are other natural conditions that produce dia¬
monds. In Australia's New South Wales there are numer¬
ous occurrences of alluvial diamonds, but, contrary to
the traditional theory, the area is characterized by a thin,
relatively young land crust that has no evidence of kim¬
berlites or lamproites. According to the new theory, dia¬
monds can be formed by the sinking or subduction of
carbon-bearing marine sediments in a collision zone
between two tectonic plates. If the subducted slab is
thick enough, it will remain comparatively cool as it
sinks and diamonds will form dynamically during the
subduction when sufficiently high pressure is reached.
Some calculations show that diamonds could form at
depths as shallow as 50 miles, which means that rocks
other than kimberlite or lamproite can bring them to the
surface. If the theory is correct, it will open new areas to
diamond prospecting—and new prospects for diamond
dealers and movers.
The theories may be important for some people
holding down an academic chair at some university. But
for the diamond merchant the realities are the crucial
factor. One of those realities is that conditions under
which diamonds form are not totally clear. We know
that not all volcanic activity produced diamonds.
Diamonds are concentrated not only in specific geologic
 INSIDER SECRETS TO DIAMOND DEALING

regions—areas where volcanic activity is documented—

but in specific geographic areas as well. Although dia¬
monds have been found on every continent except
Antarctica, many of the deposits have not proven com¬
mercially exploitable.
Theories aside, it appears that diamonds welled up
from the depths of the earth as early as 2.5 billion years
ago. According to some, the process now seems to have
stopped. Natural diamonds are usually not less than 50
million years old. In any event, the stones have been
lying there for a long time, just waiting to be picked up in
the right place, when the time is right. They've waited a
long time.
Diamond mining goes back 3,000 years in India,
which was the first home of the diamond industry. It was
from those Indian diamond deposits that the stones
seeped into Europe and the West—sometimes as pretty
baubles, but more often as cultural oddities and rarities.
For the most part, the Indian diamond deposits have been
effectively depleted through the centuries. Nonetheless,
even today India produces some stones and still has an
extremely active cutting and polishing industry.
Brazil became a major diamond supplier in the 18th
century—a time when people were still debating
whether diamonds were formed by lightning. The dis¬
covery of alluvial diamond deposits in Brazil brought on
a major battle among the early diamond traders.
Indian diamond producers, concerned quite rightly
over the effect that the new and rich source was having
on their own sales and prices, badmouthed the Brazilian
stones. The Indian merchants put out the word that
Brazilian diamonds were too difficult to cut. Others
denied that there was such a thing as a Brazilian dia¬
mond and claimed that the South American stones were
 PLACES

just the dregs of Indian stones, brought to Brazil and salt¬

ed in creeks to create a mining frenzy. The Brazilians
struck back at the rumors and the bad publicity by sim¬
ply shipping their product (smuggling is really more
accurate) into India and then selling the diamonds to the
public as Indian stones.
But even at this time, the diamond was only a
bauble. Perhaps it was an interesting and expensive
bauble, but until just a few score years ago, a diamond
was a stone prized more for its rarity than any other qual¬
ity. Frankly, the diamond was dull. It looked dull in
nature, and, even when cut and faceted, it looked no bet¬
ter than glass.
In the last half of the 19th century, scientific cutting
of diamonds to produce a stone that sparkled and scintil¬
lated was unheard of. Most jewelry diamonds were lack¬
luster by today's standards, and certainly diamond
engagement bands were not common. Only the very
wealthy had diamond jewelry of any kind. The Industrial
Revolution was yet to seriously start, and diamonds, a
necessary tool of industry today, lacked the significant
commercial uses they now have.
At the end of the 19th century, the great South
African diamond mines opened up just as the Industrial
Revolution swung into high gear. Along came new finan¬
cial moguls and, in many areas, a middle class that had
the economic wherewithal, as well as the incentive, to
adorn themselves with jewels.
The South African diamond production eclipsed
anything the world had seen. Scientific cutting, to chan¬
nel the light and reflections inside the stone in precisely
calculated ways, made diamonds much more beautiful
to behold, and far more attractive to look at and own.
The diamond cartel known as DeBeers came into being
 INSIDER SECRETS TO DIAMOND DEALING

and promoted diamonds in a way that was unprecedent¬

ed. The stones became the pinnacle of fashion. That was
new! The South African finds and scientific advances
combined to create an increased demand at a time when
there was a financial ability to satisfy the demand. And
any time there is an increased demand there is more of a
tendency to smuggle. That tendency remains to this day.
Today, more than 95 percent of all gem diamonds
comes from one of five countries—and it is in those
places that the dealing and smuggling trail starts.
Australia leads the world, producing more than 30
percent of the world's gem and near-gem diamonds.
Actually, Australia accounts for between 35 and 50 per¬
cent of the world's total diamond carat output. Australia
produces more diamonds by weight than any other coun¬
try—about three times the annual production of the
Commonwealth of Independent States (the vestigial ex-
Soviet Union) and four times that of South Africa.
But there are two extremes of value in Australian
stones—a very high-grade and a very low-grade diamond.
Although Australia's rocky and forbidding terrain has
been a source of diamonds since gold miners uncovered
the first find in 1851, initially there were low-quality
stones overall. That economic disincentive kept a firm
lid on the number of exploration companies, and on pro¬
duction, for years.
Later discoveries of diamonds—Australia is also a
leader in the production of industrial diamonds—set off a
frenzy of exploration that can only be likened to the gold
rush that virtually shaped the society and culture of the
hard-edged country-continent a century and a half
before. Much of the new exploration is taking place in
Australia's Northern Territory. But diamonds seem to be
everywhere in the outback. The giant Argyle resource in
 PLACES

the Kimberley region of Western Australia, discovered in

1979, is the world's single largest diamond mine, produc¬
ing 38.9 million carats in 1992. (Only about 10 percent of
its output is rated gem quality.)
There are a lot of other places to look for diamonds.
Botswana—about as easy to find on a map as it is to
get to—weighs in with a hefty 25 percent of the world's
gem diamond production.
Zaire and South Africa—when they're not having
serious domestic economic and political problems that
make diamond smuggling much more interesting to
those who want to leave—each have 12 percent of the
production market. (South African deposits have a high
percentage of gem-quality stones. About 40 percent of
the South African stones fall into that category.) In Zaire
it's said that diamonds are still a dictator's best friend.
The international diamond trade in Zaire, the world's
third largest producer of diamonds of all types, is
believed to be the last remaining major source of hard
currency for the financially pressed government.
The former Soviet Union, specifically the Russian
part, produces about 20 percent of the world's gem¬
stones—but is number two in the production of all rough
(uncut) diamonds. Those grim mines on the permafrost
plains of Siberia are important hard currency earners for
Moscow. Most of the diamonds come from Yakutia, a
region that has given itself semiautonomous status as
the Republic of Sakha. Yakutia in recent years has pro¬
duced 98 percent of all Russian diamonds.
In Yakutia the signs may say brilyanty na vsegda—
diamonds are forever—but here there is little evidence of
the glamour and romance that Madison Avenue pitch¬
men and diamond retailers want to attach to the stone.
Russia's diamond miners operate, and have worked for
 INSIDER SECRETS TO DIAMOND DEALING

decades, in some of the world's most disagreeable out¬

door working conditions. The remote and forbidding
Siberian outpost is covered in ice nine months a year.
Mush and mud are features the rest of the year.
When Siberian diamonds were discovered in 1949,
the remote and inaccessible region was placed under
Moscow's direct control. Soviet mines first used convict
labor to exploit the resource, with a leavening of volun¬
teers from the loyal ranks of the Communist party and
Komsomol (Communist Youth League). As time went by
the government stopped using convicts and relied more
and more on the then-young ideologues, people who saw
diamond production as a means of promoting the party,
their beliefs, and communism. It didn't hurt any that
Volunteer diamond workers were always paid better-
than-average wages and allowed extra privileges, such as
avoiding the 10-year waiting list for cars. But the work¬
ers' wages were then, and still are, a pittance.
These workers often were "true believers," who
toiled in unspeakable conditions to try to create the
national economic base that was needed to overcome
capitalism. At least that's what they fervently believed
they were doing. The reality was hidden from them.
From 1959 on, they were toiling in the mines so that the
communist leadership of the Soviet Union could market
the fruits of their labor hand in glove with the giant capi¬
talist diamond cartel, DeBeers. DeBeers was a pillar of
white South Africa, which was reviled daily in the offi¬
cial Soviet media. But the diamond workers were kept
blissfully ignorant of this connection, which would have
been most troubling to them.
The fall of the Soviet Union not only destroyed the
reason these workers had for working hard—the promo¬
tion of their belief in a workers' system where everyone
 PLACES

was supposed to toil according to his or her ability—but

it also ripped away their ignorance of the facts. The dia¬
mond workers discovered they were toiling in miserable
conditions, drawing little pay, so that others (many of
them capitalists abroad, including those in South Africa)
could profit from their sweat turned to ice. Today
Russian workers, particularly older workers in the
Russian mines, are unhappy. They want what they see as
their due—not only for today's wages, but for their histo¬
ry of misery. For many of today's workers, a purloined
stone now means that they can improve their individual
lot. These are inventive people who use contacts with
the much-feared Russian mafia. But they may also be
willing to sell to any high bidder who has hard currency.
The problem is that Yakutia is a nowhere place, a
wasteland nobody would visit but for buying diamonds.
Because of that, an American, or any foreign traveler
who shows up, is immediately pegged for what he is and
what he wants, which makes operating clandestinely (or
safely) impossible. Only when things change to the
extent that it is possible for a foreigner to enter the area
without causing a flurry of excitement will diamond
deals with local people be possible. That change may be
coming soon.
Russia is trying to restructure its diamond market
at every level, from the mines to the cutting industry. It
badly needs restructuring. Russian managers have made
a number of serious miscalculations, including mistakes
over when to phase in new mines. The Udachnyi mine,
which produces 80 percent of Russia's gems, closes for
several months a year due to a buildup of toxic gases at
its base. Some Russian mines will soon have to adopt
expensive and complicated underground extraction. The
opening of the big new Iubileinaya mine, which was
 INSIDER SECRETS TO DIAMOND DEALING

scheduled to come on line in 1992, was held up because

of delayed deliveries of building materials and supplies.
The newest Russian field is facing many of the
same problems that older fields have to deal with. The
Lomonosov diamond field is located in Zimnyi Bereg,
an area of swampland and taiga forest. There the
removal of water, which needs to be done before min¬
ing can begin, poses a major technical and ecological
problem. But when it gets underway, the field, which
comprises five pipes, is likely to become extremely
profitable because half the diamonds are of very high
quality. About half of the stones are gem quality, and
many of the rest are near gem.
Despite the grim realities and serious mistakes in
the Russian fields, there is a lot of "happy talk" among
Russian diamond experts. Talk to the market leaders in
the Siberian diamond industry and they will tell you that
sooner or later one of the main diamond markets in the
world will be in Russia. The diamond bosses of Siberia
say they will soon have a secondary market in diamonds
and, eventually, 10 or 15 polishing plants in the Yakutia
region. That would have repercussions for diamond mer¬
chants and smugglers if it comes about.
Given diamonds' economic importance to Russia,
both the nation's parliament and its president keep a close
watch on the diamond industry and those in it. A state
company has the Russian monopoly in mining, sorting,
and grading rough diamonds from Yakutia. And the
Almazyuvelier export firm handles diamond export sales.
It's probably true that Russian diamond fields are
now being tapped better than in previous years; under
more normal circumstances that should produce a drop
in smuggling. But given the political, economic, and
social turmoil there today, and the greater turmoil that is
 PLACES

on the horizon for Russia during the rest of the 1990s and
the first years of the new millennium, illicit diamond
dealing and smuggling will continue to be a growing
business in Russia. In fact, smuggling of all kinds is a
multibillion-dollar business in the former Soviet Union.
Smuggling, in any form, is not likely to go away in
the vast reaches of Russia and will continue to plague
the Russian government and economy. In just a few
years, smuggling has become too rooted in the society
to be stopped easily. The practice of accepting bribes in
return for assisting in what are euphemistically called
"illegal exports" has become almost commonplace in
government-owned enterprises, the Customs service,
and government offices. For instance, the standard
bribe to a rank-and-file Customs officer to look the
other way is $20. That's not much by American stan¬
dards, but there that $20 is the equivalent of two
months of official salary. That's a temptation that is
hard not to give in to. Even the armed forces appear to
be involved in smuggling, and there are some indica¬
tions that secret military airfields are increasingly
being used as bases for such operations.
A decade ago there was an Iron Curtain. Today
Russia has what can best be called a porous border. The
readjustment of national borders after the Soviet Union
split into more than a dozen independent states in 1991
created for Russia, and the other new nations, untold
thousands of miles of new national boundaries.
Lines that formerly marked only administrative
areas suddenly became national frontiers. Those threads
of administrative lines became a skein of long, unpro¬
tected national borders, many without fences or border
posts that now run between Russia, the Baltic states,
Ukraine, and Belarus and that are open or nearly so.
 INSIDER SECRETS TO DIAMOND DEALING

Long, open borders figure in every smuggler's most pleas¬

ant dreams.
Significant amounts of smuggling—some would
call it illegal trade in raw materials—already go through
the Baltic nations of Estonia, Latvia, and Lithuania.
Those are countries where the people remain almost
genetically friendly to Americans because of U.S. sup¬
port of the "captive nations" through decades of Soviet
domination. The Baltic states, which have traditionally
served as Russia's window to the West, have become
Russia's open door to the West, and all kinds of things
pass through that door now.
Any American diamond pipeline out of Russia is
probably going through very friendly territory if it runs
through the Baltic states. Not only do the people there
like Americans, but they despise the Russians. Baltic
police officers have every reason to be sullen when deal¬
ing with their Russian law enforcement counterparts,
who, until only a few years ago, were their oppressors.
Law enforcement agencies in the Baltic states may pro¬
vide some help to the Russians in a murder case,- howev¬
er, Baltic police generally find something better to do
when the Russian police ask for help in investigating
"economic crimes," such as diamond smuggling.
Not all the potential smuggling areas are as far away
as the swamps of Russia. Soon to come on line as a major
player in the diamond world will be Canada.
An area of Canada that was once windswept wilder¬
ness, best left to wolves, martens, and bears, has now
been dubbed the Corridor of Hope. The frenzied winds of
exploration swept the tundra around Lac de Gras after
diamonds were discovered there in 1991. At one point,
more than 200 firms were probing for kimberlite pipes in
the tundra. The Canadian finds promise to rival any in
 PLACES

Russia and, eventually, Australia. In fact it is an

Australian mining giant, Broken Hill Pty. Co., Ltd., that
teamed with the Canadian exploration firm, Dia Met
Minerals, Ltd., and set out to develop the Lac de Gras
diamond deposit, which some say is one of the world's
richest untapped sources. Major international mining
concerns, including South Africa's giant DeBeers
Consolidated Mines, Ltd., quickly joined the Canadian
carbon rush. (Stock share prices of Canadian exploration
ventures soared in a messy, and predictable, run-up of
stock prices. But the stock bubble burst after several
highly touted ventures announced dismal test results.)
Despite the bust stock market activity, the
Canadian prospects are real. Canada remains, in fact, a
diamond in the rough. At least some of the large-scale
tests have shown that the properties there have
extremely rich kimberlite pipes, which are not much
different from the kimberlite pipes in diamond-rich
South Africa and Russia, where mining has been suc¬
cessful. But the key to keep in mind is that all the
mines in those locations took more than a decade to
develop fully. Additionally, the timing of any Canadian
development will likely be slowed somewhat by envi¬
ronmentalists. As in Russia, much of the Canadian
mining would involve draining lakes since the diamond
deposits are located under lake beds. Any mining
means there will be massive environmental changes, so
it's no surprise that environmental activists are gearing
up to fight the first major diamond mine on the conti¬
nent. But despite the environmentalists' best efforts,
diamond production could begin before the dawn of the
new millennium. All of this activity points to potential
diamond-smuggling operations.
Other diamond-producing countries include
 INSIDER SECRETS TO DIAMOND DEALING

Namibia, Brazil, Central African Republic, and Angola.

There is also some production in Sierra Leone, Tanzania,
China, Guinea, Liberia, Ghana, Venezuela, Swaziland,
India, Indonesia, Ivory Coast, and Guyana.
Lesotho, which had a diamond rush of its own in
the late 1960s, is relatively overlooked and underworked
today. There is a potential for better recovery in the
future. Given its geographic isolation, the opportunities
for smuggling are good there.
Angola actually deserves a few more words than a
simple listing as an also-ran. Angolan diamonds have
been a major factor on the world market, although unof¬
ficially. The Angolan diamond history is a good example
of what can happen when the fire of revolt and war meets
"hot ice"—diamonds that are illegally mined or are
smuggled. It gives some insight into the complex, con¬
fusing world of diamond politics and economics and is a
window into DeBeers, the mother of all monopolies.
For years, the Angolan government and a rebel force
known as UNITA battled for supremacy in Angola.
Political instability in the country allowed wildcat dig¬
gers, or garimpeiros, to plunder alluvial diamond beds in
Angola's Cuango province. It has been estimated that in
some years more than 10 percent of the world's total dia¬
mond output came from this single source.
Some of the money from free-lancers' efforts went
into miners' pockets, of course. Much of it was apparent¬
ly siphoned off to provide arms for UNITA, which had
the backing of the apartheid South African government.
The DeBeers monopoly, which tries to capture
every smuggled or illegally mined diamond and process
the stone through its subsidiary Central Selling
Organization (CSO), was naturally interested in recap¬
turing the illicit Angolan production. At the very least,
 PLACES

the production posed a threat, as does any outside

source, to the monopoly.
But there were some interesting sidelights. Some
insisted that the close connection of DeBeers to the
South African government, and of the South African gov¬
ernment to UNITA, amounted to an unlovely triangle.
There were even claims that CSO was paying way over
the going diamond price to the wildcat miners, a gift to
UNITA, but this was a claim that DeBeers's people have
always denied.
What is important is that the control of the Angolan
diamond fields became very important to military cam¬
paigns. Whoever lost control of the taxing/expropriation
abilities also lost a major source of revenue. That lesson
has ramifications in every country, under any regime,
where diamonds are produced.
One area that should be considered for the future
may well be Zambia. It doesn't presently have a diamond
mining industry to speak of; most of its stones are actu¬
ally smuggled in from neighboring countries. However,
there is a great potential for Zambia to produce dia¬
monds since its geology is similar to neighboring dia¬
mond producers Zaire and Angola.
There are reportedly diamonds in the hills of central
Vietnam, and that could be another area with an as yet
unrealized potential.
What many people find interesting about the list of
diamond-producing countries is that, except for
Australia and Canada, just about every location listed is
facing serious internal strife. That sort of political/social
condition makes illicit diamond mining and smuggling
much more attractive to people living in such places. In
some cases, diamond smuggling is literally their ticket
out—a virtual lifeline.
 INSIDER SECRETS TO DIAMOND DEALING

There are no such ''instability" incentives in the

case of Canada. But for Americans Canada is a northern
neighbor. And for the would-be diamond smuggler there
are some positive aspects. Canada has what amounts to
an open border with the United States. The two nations
share a common language, as well as a culture that a
potential illicit diamond buyer or smuggler can operate
in without feeling—or seeming—out of place.
Except for Australia and Canada, the very places
that produce diamonds seem generally less able to
defend against smugglers. "Look-the-other-way-for-a-
price" officials and the prevalence of people who have
strong incentives to get often illegally obtained stones
out of the country make a smuggler's life easier. Yet in
any locale, unless the would-be smuggler knows the
territory like the back of his hand, has the right con¬
tacts, and can lay his hands on the right stones with¬
out having to ask around, there are going to be big
problems.
Because uncut diamonds have yet to be made into
jewels, they are relatively cheap at the diamond-mining
stage of the process. And they are relatively cheap for the
would-be smuggler to buy.
But when you buy an uncut diamond—assuming for
the moment that you do really get a diamond—there is
often no way for anyone except a professional to know
with absolute certainty whether it is gem quality. Even if
it is gem quality, how large will the finished stone be?
The answer to that is crucial. Remember, carat weight of
the finished stone, not the rough diamond, is one of the
four keys to the value of the diamond. Two or three
carats of tiny stones are not worth anything near what a
single stone of two or three carats can bring. That should
be enough to discourage most thinking novices from get-
 PLACES

ting into the diamond-dealing business at the level of

dealing in uncut diamond, or rough.
And although smuggling something like a dia¬
mond out of a Third- or Fourth-World diamond-produc¬
ing country may seem like a breeze, it isn't all that
easy. Many little countries aren't keen on having dia¬
monds exported illegally. Why? Because top officials—
oops, make that the government leaders—always man¬
age to find some nice way to take a cut of the Customs
proceeds. Since a smuggled diamond usually doesn't
put anything in their pockets, they're more than a little
miffed. It's like stealing from theml In such countries
you may soon have a bigger problem than getting a
stone out of the country—how to get yourself out of
jail. In many of these backwater nations, the mere sus¬
picion of smuggling, rather than actual proof, is usually
sufficient evidence for the gendarmerie to make an
arrest and for a judge to pass sentence.
Even if you don't end up in some jail that makes the
Black Hole of Calcutta look like a five-star hotel, it's
likely you'll be taken for a greenhorn—and a pile of
American greenbacks—if you start out dealing in rough
diamonds.
Most professional jewelers who deal in diamonds
daily can't tell by looking whether some object put in
front of them is an uncut or rough diamond. Most of
them have never seen a diamond in the rough; many
have never even seen a picture of one. That thing in front
of them could look like what they think is a rough dia¬
mond, but it might actually be the bottom of a Coke bot¬
tle, skillfully cleaved and covered with a thin coat of oil
or petroleum jelly (many rough diamonds are slightly
oily). Diamonds in their uncut and unpolished form sel¬
dom look anything like the diamonds most people know.
 INSIDER SECRETS TO DIAMOND DEALING

More than one would-be diamond entrepreneur has

found out, to his dismay, that the uncut bargain-base¬
ment "stone" came not from a secret diamond deposit
but from the bottom of a no-deposit, no-return bottle.
For the would-be free-lance diamond dealer or gem
runner, there are some pluses—but a whole lot more dis¬
advantages—when dealing anywhere in the miner-to-
cutter levels.
From the mining centers, diamonds go to the cut¬
ting centers. Usually, the stones are still under DeBeers's
control as they start this part of the process. It is from
the cutting centers to the distributors that a good part of
the commercial diamond smuggling emanates.
For the most part, smart smugglers operate on the
interfaces. The first interface, of course, is at the mining
centers, where the stones start their journey into the
world of commerce. The second interface is where uncut
diamonds become finished stones that are suitable for
jewelry. The second interface is the point where jewelry-
quality diamonds move from cutter to seller. (There are
exceptions, of course. Some smugglers move only indus¬
trial-grade diamonds to people who have a big need and
relatively little money, for instance.)
Again, the where of the interfaces is an important
issue for the diamond smuggler. Cutting centers and sell¬
ing centers are a Mecca for smugglers of both rough and
finished stones—sellers trying to dispose of rough and
buyers planning to take diamonds elsewhere.
Diamond cutting is a high-value industry that oper¬
ates on fine margins, something that diamond buyers
need to be aware of when they're dickering over prices.
Antwerp, Belgium, is often touted as the world's
principal diamond-cutting center. Many consider India
the largest seller of polished diamonds in the world
 PLACES

because about 2,000 merchants are involved in the busi¬

ness. Indian cutters tend to be highly competitive in
their pricing structure, though many in the business
sniff at much of the work that comes out of there. The
common comment is that "you get what you pay for."
Israel is also a key cutting and polishing center.
There are also new polishing centers like Thailand, Sri
Lanka, and Malaysia.
Historically, the major markets for polished dia¬
monds have been the United States, Europe, and Japan.
But the past is not always prologue.
The medium-term outlook for retail sales is the key
factor in where diamond dealing—and smuggling—will
be lucrative. At present, the experts seem to agree that
there will probably be an upsurge in demand in Southeast
Asia, including Thailand, Taiwan, and China. Retail
sales should be lower in Japan, but they will probably be
higher in the United States. Europe will continue to buy,
but the overall European economy has been an anchor on
sales. Sales in France and Germany have tapered off,
though the purchasing impulse is still strong in Italy.
Although Russia has not been a major market in more
than seven decades, the internal demand in Russia is
growing greater as a free-market economy comes into
being. Nouveau riche Russians love the sparkling stones
for their beauty,- even the Russian men adore them as a
status symbol. Russia cannot be overlooked as a major
market, as well as a source in the future. But it will be
open only to people who have the correct connections.
.
 CHAPTER

DeBeers

In the diamond business, even today, the sun never

sets on DeBeers. An economic empire unto itself, the
DeBeers cartel—call it a monopoly and you won't be far
from wrong—is both loved and hated by most of the peo¬
ple in the diamond business. It has subsidiaries to deal
with, and dominate, virtually all phases of the market.
DeBeers has corporate ownership links with
DeBeers Consolidated Mines Ltd., a South African corpo¬
ration known for its control of the natural diamond
industry. The London-based Diamond Trading
Corporation (DTC) is a DeBeers tentacle that controls
much of the world's diamond trade.
The Central Selling Organization (CSO), which
operates in England, South Africa, and Switzerland, was
created by DeBeers in the Great Depression of the 1930s,
when there was little demand for such luxuries as dia¬
monds. Ask DeBeers representatives and, if they deigned
to answer you, they would say the cartel signs contracts
with producers so that it can guarantee steady sales and
 INSIDER SECRETS TO DIAMOND DEALING

prices. But these contracts also impose quotas on the

producers. Take the spin doctors out of the picture, and
it's fair to say that DeBeers's selling organization inten¬
tionally limits supplies to maintain price stability.
DeBeers subsidiaries sell diamonds to about 160
customers, most of them cutters, polishers, and dealers
in the main cutting centers in Belgium, Israel, the
United States, and India. DeBeers controls prices by sell¬
ing at sights, which are take-it-or-leave-it sessions where
DeBeers invites a select group of diamond buyers and
offers each individual customer a parcel of diamonds
that it has decided would be best for the particular buyer.
(These parcels of uncut rough are also called sights.)
Generally, there are good stones and bad stones in each
parcel, or sight, and buyers don't get to sift through to
choose the ones they want. Up or down, yea or nay, da or
nyet. Any way you say it, there are only two possible
choices. The selected diamond merchants seldom turn
down the rough stones they are offered; they would have
a hard time getting any elsewhere, so effective is DeBeers
at vacuuming up all the world's rough. And if they reject¬
ed too many parcels, they would no longer be invited to
the sights. When DeBeers says, "Take 'em or leave 'em,"
most people take them.
By regulating the supply and stockpiling surpluses,
the cartel is able to flatten the fluctuations that are natural
to any commodity market. It has a noble sound to it.
DeBeers's former chairman, Harry Oppenheimer, was once
quoted as saying, "Whether this measure of control
amounts to a monopoly I would not know, but if it does, it
is certainly a monopoly of a most unusual kind. There is no
one concerned with diamonds, whether as producer, dealer,
cutter, jeweler, or customer, who does not benefit from it."
That's not the way that everyone sees the situation.
 DeBeers

DeBeers is capable of economically blackjacking any¬

body who crosses the cartel. The reality is that because
DeBeers has a monopoly position and is run by good
businessmen, it acts on the understanding of the impor¬
tance of keeping prices up.
DeBeers is certainly no friend of the consumer.
DeBeers is also no friend of the free-lance diamond
smuggler who is moving any kind of goods that could
compete with its own. DeBeers has a reputation that
makes smuggling of rough ... well, rough.
Whether you like them or not, the practices of
DeBeers and its subsidiaries, rapacious as they are, create
and dominate the atmosphere that diamond dealers and
smugglers work in. Even independent diamond mer¬
chants can buy in the bush of Angola or in a shop in
Antwerp and be certain that when they turn over the
stone later, the ^value" will not have been eroded by the
sudden discovery of some rich new source that will
dilute the value of the present stocks.
With DeBeers at the helm of the diamond business,
even a rich new source of diamonds will release its
stones into the market in an orderly, undeflationary way.
At the same time, the type of price stability enforced by
DeBeers means that diamond cutters and dealers aren't
going to get any cut rates for large orders; there is no pref¬
erential treatment for buying in volume. Unlike an auto
manufacturer, DeBeers has no "fleet sales" prices. That
does mean there is some economic incentive for smug¬
gling, provided that the smuggling somehow cuts the
cost of doing business for the diamond merchant—and
provided the smuggler can get the stones past Customs
agents and DeBeers's agents.
DeBeers, despite its size and historical stranglehold
on the market, is riding out rough times. And the times
 INSIDER SECRETS TO DIAMOND DEALING

have been getting progressively worse. The rough-dia¬

mond market is a $4-to-$5-billion-a-year business.
DeBeers controls about 80 percent, four-fifths, of the
world's rough diamond market through its London-based
CSO. About half of CSO diamonds go for industrial uses,
while 12 to 14 percent end up as jewelry. However, in
terms of value, the jewelry market accounts for some 80
to 90 percent of the worth of sales. The Diamond Trading
Co., Ltd., is the gem-diamond-marketing arm of DeBeers.
This corporate entity buys stones from another DeBeers
arm, the Diamond Purchasing and Trading Co., Ltd., in
the convoluted web of interlocking companies.
A key to the future of the whole operation is the
CSO stone reserves. CSO maintains a stockpile of dia¬
monds that was believed to have jumped by $400 million
to $4.12 billion at the end of 1993, from $3.76 billion in
1992. While the figures are estimates at best, they do
give an order of magnitude of DeBeers's investment in
the future of diamonds. If production stopped at every
diamond mine in the world, there would be no effect on
supply for nearly a year. That's a passel of inventory and
economic power.
An inventory of the magnitude and a position of
such power is seldom matched, but it is important for
the diamond merchant of the future to understand that
there is growing pressure from Russia and other produc¬
ers on DeBeers's CSO. In the 1990s, DeBeers is battling
an oversupplied market and a relatively sluggish
demand. Japan has cut CSO diamond imports in dollar
terms. Russia has admitted to having its own stockpile
of high-quality gems worth at least $3 billion (more hon¬
est estimates suggest $5 billion is more likely), much of
which is apparently finding its way onto the market out¬
side CSO. That Russian stockpile poses a potential
 DeBeers

threat to DeBeers—in fact, the Russian diamond organi¬

zation has the potential to go head to head with DeBeers.
The Russians are about the only ones who could get into
an "ice war" and beat DeBeers.
Nonetheless, Russia is considered unlikely to sell
its sizable stockpile of diamonds,- "dumping" diamonds
would destroy the confidence of both the diamond trade
and of diamond purchasers of all types. Dumping stones
would also devalue the remaining Russian stockpiles.
Even though the situation seems to be sorting itself
out, and Russia gives signs of falling into line with
DeBeers, it is expected to take three to five years for
demand to catch up with supply. Cutters, polishers, and
retailers are failing to restock diamonds as they make
sales, a move that probably reflects a lack of confidence
that the world economy will rebound. While DeBeers
expresses continued confidence that worldwide retail
sales are holding fairly steady, the fact is that retailers
have been letting their stocks dwindle. Retailers may
sell five pieces today, yet reorder one or two instead of
five. That means that at present there is less need for
stones, no matter how they get from miner to merchant.
How the situation will sort itself out in the early
21st century remains to be seen. But don't bet against
DeBeers.
■
SECTION .
.-—«»... TWO
 CHAPTER
ais:
DIAMONDS—THE
BASIC PRODUCT

Diamonds are a form of carbon that crystallizes

IN ONE CERTAIN WAY—WHAT GEM FANCIERS CALL AN ISOMET¬
RIC arrangement. There are subgroupings of the isomet¬
ric arrangement, and all are diamonds, all are valuable.
The isometric arrangement means the crystals tend to be
balanced in all directions. This crystal arrangement is
called cubic. But other forms of carbon crystals, other
than those in the isometric arrangement, are virtually
valueless. They're used for lubricating locks. Graphite,
the black stuff of lead pencils, is essentially pure carbon,
but it crystallizes in a different structure.
The typical gem diamond is 99.95-percent-plus pure
carbon. That tiny remainder can be made up of more than
a score of different impurity elements. Sometimes these
elements can influence the color or the shape of the stone.
Diamonds are generally measured in the following
four key categories:

• Color
 INSIDER SECRETS TO DIAMOND DEALING

• Cut
• Clarity
• Carat weight

As important as the Four Cs are, the ludicrous part

is that they are only a measure of value. They do not
measure the beauty of a stone. For instance, a small
stone may be more beautiful than a larger one a color
grade lower—but it will not be as valuable. And value,
not beauty, is what the diamond smuggling business is
all about.
The standards applied to diamonds are more strin¬
gent than those used in almost any other consumer prod¬
uct line. Minute differences in color or weight—differ¬
ences that can be seen only under 10X magnification—
make for huge differences in price. The simple fact is
that the value of any diamond is based strictly on rarity.
Beauty—and it's hard to stress this too much—seldom
has anything to do with the value. Again, it's the Four
Cs: color, cut, clarity, and carat weight.
If you haven't memorized that litany by now, stop
right here and don't resume reading until you've done so.
You can forget your significant other's name or birthday;
you can't afford to forget those words if you're in the dia¬
mond business.
These are the key determinants of diamond rarity,
the standards by which all fashioned diamonds are
judged, paid for, and sold. Anyone who doesn't under¬
stand these factors is going to be hornswoggled—sooner
rather than later, undoubtedly.
When you're haggling over the price of stones you
have got to be able to accurately assess the color, cut,
clarity, and weight to make your own appraisal of the
value. When dealing with stones that have not been trav-
 DIAMONDS—THE BASIC PRODUCT

eling—or will not be traveling—through the convention¬

al channels, it's particularly important that you be able
to articulate why the price should be based on your
appraisal and not on the other person's idea of the price.
You need to display superior knowledge—knowl¬
edge that is so readily apparent to your counterpart that
he is willing to agree to your price. In the real world that
may not happen, even if you are 100-percent correct. A
seller may feel certain he can peddle his diamonds to
some other, less knowledgeable buyer for more money
than he can get from you. A potential buyer may be
impressed with your knowledge of stones but still figure
he can get comparable quality at a lower price from one
of your competitors who is less well versed on the trade.
But you cannot afford to be thought of as a neophyte,- you
have to acquire knowledge, experience, and a whole new
vocabulary.
The weight of a stone is the first thing most people
think of when their minds wander to diamonds. It's as
good a place as any for you to start your journey into the
diamond field.

CARAT WEIGHT

Weight is an important factor in determining value,

whether the diamond is rough (uncut) or finished (e.g.,
cut, polished).
Remember that diamond price is based on rarity.
Since there are fewer large stones, the value of a stone
increases exponentially per carat. The price of a four-carat
piece of rough diamond (assuming all other aspects of the
stone are equal) will be much more than the price a cutter
would pay for four one-carat pieces of rough, for instance.
And the price of a finished one-carat stone wouldn't be
 INSIDER SECRETS TO DIAMOND DEALING

anywhere near close to a quarter of what a four-carat

stone of the same color, cut, and clarity would bring.
Diamond weights, and the weight of other gems as
well, are expressed in the metric carat. This equals 0.200
grams, a little more than 0.007 ounce. This is a minus¬
cule weight.
How tiny? Keep in mind that most of the general
public seems to think that a diamond engagement ring
has to have a one-carat stone (very few do) or it really
isn't a ring worth mentioning. Let's play with that popu¬
lar misconception for a minute, while keeping in mind
that a one-carat diamond may retail from the low thou¬
sands to the ten-thousand-dollar range, depending on
color and other factors. A diamond dealer could use a sin¬
gle first-class postage stamp to mail the stones for 141
one-carat-diamond rings, and there would still be some
weight left over. To put it another way: if you wanted to
mail diamonds you could send more than 141 carats of
stones before you would need a second stamp! That's
how small the carat weight measurement is.
But the people in the diamond trade don't conduct
their business on a weight so gross as the carat. Of course
not. Farmers may sell their crops by the ton, but you
don't buy heads of lettuce, bunches of carrots, or steaks
by the ton. You buy food by the pound—a small portion
of the ton.
The same holds true with diamond dealers. They
routinely measure the weight of their stones to 1/1,000th
of a carat, and they price the stone in rounded-off
l/100ths of a carat—called points.
This is another of the diamond terms that must be
fully understood. Although some diamond jewelry may
have individual stones weighing a point or two, and
there are pieces of jewelry where the main stone weighs
 DIAMONDS—THE BASIC PRODUCT

in excess of 100 points or one carat, the vast majority of

jewelry stones are between five points and one carat—
the area where everyone talks about points. For that rea¬
son point becomes one of the most important words in a
diamond dealer's lexicon.
And it takes a lot of understanding. Admittedly,
learning the jargon of the diamond trade is just about as
easy as learning English or Japanese. If you're brought up
with it, it's natural. If not, it's hard to acquire. But again,
you've got to acquire the language and be able to use it
effortlessly and flawlessly. Anything else will identify
you as a tenderfoot in the diamond business.
Let's take an example of the difficulties of express¬
ing weight measurements: a stone that weighs between a
half and a two-thirds of a carat (.63 carat). Diamond deal¬
ers don't say "point sixty-three carats." They will say it
weighs "63 points" or call it a "63-pointer." Let's take
another stone, one of about half a carat, say .45 point. It
is called a 45-pointer or is said to weigh 45 points.
Seems simple enough.
Now let's go to a stone that weighs more than one
carat, for instance, a stone of 1.08 carats. The pros will
say the stone weighs "one point oh eight carats" or is
"one oh eight." "Point" in the first case is used to identi¬
fy the decimal mark; in the second example the word is
dropped completely. In the diamond trade you can't
afford to make a mistake when talking about diamonds.
You've got to be carefully taught. The use of point, like
that of the Four Cs, has to become reflexive.
There is one other word that the diamond dealer
has to know and know how to use. The word is spelled
melee but it rhymes with belly. Melee is a generic
term that refers to small diamonds, diamonds under
20 or 25 points.
 INSIDER SECRETS TO DIAMOND DEALING

If you understand everything up to now and can talk

intelligently about weight, now is the time to go on so
that you can really get confused. But do not go on, even
to the period at the end of this sentence, if you haven't
mastered the language above.
When the weight of a finished diamond is under a
carat, there are several ways of referring to the stone. We
have talked about one way already, referring to the dia¬
mond weight by the number of points—25 points, 87
points, etc. That's the most accurate way. But there are a
lot of other terms that are thrown around in the trade,
and you'll need to know them if you want to pass as
knowledgeable in the business. Often people in the trade
will refer to stones as fractions, but don't think that a
"half" is necessarily 50 points or a "quarter" 25 points.
In this nomenclature a half could be anywhere from
47 through 56 points. Although usage may vary slightly,
a point or two in some cases, people using this fraction
system generally mean the following:

Term Range of Weight

1/10 .09-. 11 carat
1/8 .12-. 14 carat
1/6 .15-. 17 carat
1/5 .18-.22 carat
1/4 .23-.29 carat
1/3 .30-.37 carat
3/8 .38-.46 carat
1/2 .47-.56 carat
5/8 .57-.69 carat
3/4 .70-.83 carat
7/8 .84-.89 carat
9/10 .90-.95 carat
 DIAMONDS—THE BASIC PRODUCT

Let's throw in another system. You can't blink an

eye or frown when the person you deal with starts talk¬
ing about grainers. Diamond wholesalers—people you
may well have to deal with at one end or the other of a
transaction—have their own language that is based on
the pearl grain weight—one-fourth of a carat. Thus a .75-
carat stone would be a three grainer, but so would a .68-
carat stone or an .83-carat stone. Such usage is an approx¬
imation at best, but one you'll need to know and feel
comfortable with.
In another measurement system, stones are referred
to by the number that it takes to make a carat. Tenth-of-a-
carat stones, for instance, would be called tens; tiny .005-
carat diamonds would be two hundreds. Often this system
is used for recording information on invoices. When it is
used that way the figure is recorded like a fraction.

Size in Carats Oral Written

.005 Two hundreds 1/200
.007 One fifties 1/150
.008 One twenty-fives 1/125
.01 Hundreds 1/100
.015 Seventies 1/70
.02 Fifties 1/50
.03 Thirty-threes 1/33
.10 Tens 1/10
.125 Eights 1/8

When diamonds are over a carat, they are defined in

terms of the carat weight to the nearest 100th of a
carat—"two point oh three carats," is the way a stone of
2.03 carats would be described.
The weight of a diamond is in most ways the most
objective of all the Four Cs. Loose diamonds can be
 INSIDER SECRETS TO DIAMOND DEALING

weighed on a jeweler's scale, or balance, as it is often

called, and the weight of mounted stones can be estimat¬
ed. (Mounted diamonds cannot be weighed; they must
first be unmounted. Even though it is possible to mea¬
sure a mounted stone and then apply a complex set of
formulas to the measurements to get a reasonably
approximate weight, people involved in the movement
of diamonds across borders should seldom do so. That's
being generous. Offhand, there are no good reasons I can
think of to ever use only weight approximations of
mounted stones in making purchases. If you're really
serious about buying stones set in jewelry, unmount the
stones and weigh them before buying. As will become
apparent later, there are too many people out to swindle
you, in too many ways, with already mounted goods.)
For examining, weighing, and measuring diamonds,
you will need some special equipment.
You will constantly need to look at diamonds under
magnification. A 10X color-corrected loupe—either a
hand-held one or one that fits in the eye/clips on the
glasses—is the standard of the diamond industry. Most
users of loupes quickly find that hand-held ones, ones
that look like small magnifying glasses, are not as versa¬
tile as the kind held up against the eye or clipped to
glasses. The reason is simple: often you will want to use
both hands in examining a diamond; hand-held loupes
make that impossible.
The most common weighing devices in the smug¬
gling trade are diamond balances. Some are so small they
can be carried in a (thick) wallet. The hand-held ones are
simple to use and operate. Place the stone in one pan,
then add the tiny weights to the other pan with a tweez¬
ers until the pans balance. Add up the total of the
weights. There's nothing difficult about it if you can add.
 DIAMONDS—THE BASIC PRODUCT

A good portable balance will allow you to measure the

weight of a diamond to within one-half point.
At times you'll need to measure the dimensions of
stones. In the diamond trade, the stones are measured to
the nearest 100th of a millimeter—a distance of about
four 10,000ths of an inch, or, more precisely .0003937 of
an inch.
For measurements, your best bet is a screw microm¬
eter. Some people use other devices called moe gauges
and leveridge gauges with success (and an eye on the
instruction book), but I prefer a micrometer.
Micrometers are readily available almost anywhere,
including hardware stores. In the United States, most
micrometers are designed to measure in inches rather
than millimeters, which is what you'll need in the dia¬
mond business. You could take the measurement in
inches and then use a conversion formula. But why?
Save yourself a lot of hassle, and perhaps some expensive
mistakes, by buying a micrometer that measures in mil¬
limeters from the very start.
Hole gauges—thin sheets of metal or plastic with
holes punched out in a variety of common diamond
sizes—are also helpful if you don't need accuracy.
Any of this equipment can be purchased at jewelry
supply firms.
By the way, when you buy equipment like this,
don't leave tell-tale tracks behind you. Don't buy locally.
Pay cash. Don't put the purchases on a credit card, and
don't give your correct name or address. Generally, using
a friend's name and address is sufficient, and you won't
stumble over it as so many people do when they start
using made up names or phony addresses and phone
numbers. And don't keep the receipts. You probably
won't need them for tax purposes!
 INSIDER SECRETS TO DIAMOND DEALING

COLOR

Color has several meanings in the diamond world.

Usually the most sought-after diamonds are colorless—a
trait that is so desirable, so rare, and so often misused as
a sales pitch that the U.S. Federal Trade Commission
(FTC) had to come up with a set of regulations to define
what colorless really is.
The reality is that very few diamonds—profession¬
als refer to them as stones, and you should do so from
now on—are colorless. Diamonds come in a wide vari¬
ety of colors,- the colors are the result of minor distor¬
tions in the crystal structure, natural impurities, or
radiation and heat treatment. In nature most stones are
slightly shaded either toward the brown or the yellow.
Most stones sold to consumers run the gamut from
near-colorless to slightly yellow or brown. Diamonds
do come in virtually all other colors, however, includ¬
ing blue, pink, gray, and orange.
Because of their rarity, colorless stones are very
valuable, assuming that the cut, clarity, and carat weight
are reasonably good. As traces of color can be seen—first
under magnification and then with the naked eye—the
stones progressively lose value. Up to a point! When the
color in a stone is so intense that it is readily apparent to
the naked eye, the stones start gaining in value again
from the color. Then their value increases as the color
deepens. Fancy colors are evaluated on the basis of tone
and saturation. Such fancy-color diamonds are desirable,
particularly when the color is natural.
But not all coloring in diamonds is natural.
Diamond colors can be changed, and most of the colors
found in nature can be reproduced by technicians
working with normal color-grade diamonds. Blues, pur-
 DIAMONDS—THE BASIC PRODUCT

pies, greens, and pinks are fairly rare among the treated
stone colors, but it is much easier to create fancy yel¬
lows, browns (called coffees), oranges, and yellow- or
blue-greens.
Irradiation, or irradiation and heat treatment, will
produce some color changes. These are so-called treated
stones. Properly irradiated diamonds, those that have
been done in modern times, are completely safe for the
wearer or bearer. However, some stones treated in the
early 1900s are themselves radioactive and unsuitable
for wearing.
Colors can also be changed or "improved" by skull¬
duggery with the object of increasing the price.
Mounting stones with colored foil backings or placing
dots of paint, fingernail polish, or ink at certain places on
the stone are some of the easier ways to do it—and easier
to detect. But real pros use ultrathin coatings of chemi¬
cals or plastics to defraud buyers—but those materials
can be so ingeniously applied that they can't be detected
outside a professional gemology laboratory. For that rea¬
son, colored diamonds are a good thing to stay away from
in the smuggling trade unless you carry a fully equipped
lab with you.
The amount of color that is visible in any diamond
depends on several factors. The larger the stone, the more
the color will be noticed. The method of cutting will have
some effect on color. The pointed ends of fancy shapes such
as pears, hearts, and marquise-shaped diamonds are gener¬
ally more colorful; diamond professionals have a saying
that the points of the stones "draw color."
Particularly in colored stones, stay away from those
already in mounts. A good jeweler can use the color of
the metal mounting to improve the look of a stone. In
certain mountings slightly yellow or brown diamonds
 INSIDER SECRETS TO DIAMOND DEALING

seem to be more colorless, while in other mountings

dark yellows and browns seem richer and darker. Blue-
tinged stones are enhanced by silver mountings.
Conversely, white metal usually does very little good for
yellow or brown stones. Gold-colored mountings are bad
for bluish stones; they deaden the color.
Hold it. All this talk about color—does that mean
that someone who is color blind cannot work in the dia¬
mond business effectively? No. The need to see colors as
we normally understand it is one of the many myths in
the diamond-dealing profession. Except when dealing
with fancy-colored stones, color-blind people do well—
sometimes exceptionally well—as color graders. They
are not judging the hue of a color, but rather the depth of
the color, and it makes no difference to them whether
the hue is yellow, green, or brown.
There are a lot of other myths that the jewelry trade
has built up about color, and it's worthwhile to explore
them here because they affect the business of buying and
selling diamonds.
The biggest myth is that you have to have a color¬
less stone or you've just got junk. People outside the
trade, even when you try to show them the distinction
between the color of the top five color grades on mount¬
ed stones, just can't tell any difference. To the viewer
there is no discernible difference. These top color grades
simply measure relative rarity—and thus are a way of
measuring price. Such finely tuned color grades turn out
to be distinctions made by professionals, but there is no
difference in the eye of the ultimate diamond purchaser.
Of course, when you're going to be dealing with those
diamond middlemen in buying or selling, you've got to
honor the myth. They do. And you need to be reading
from the same page in the book.
 DIAMONDS—THE BASIC PRODUCT

A similar myth is that, within the normal color

ranges, people want the more colorless stone. In fact,
when you put unmounted stones out, many people will
choose stones from the darker end of a normal range.
Ask them why and they will tell you they seem "richer"
or "warmer" than the colorless ones.
But it's unlikely that you'll be dealing with cus¬
tomers in a jewelry store. You're going to be dealing with
a merchant or some other middleman. So, the myths
aside, when you're dealing with stones to sell to others,
the less color the better.
Color has been called "the subtle C," because the
gradations are so slight that they are virtually indistin¬
guishable except to a trained professional who has mas¬
ter stones to grade against, using a 10X loupe.
The importance of owning a set of master stones for
color grading cannot be overstated. People who think
that they can "hold color" in their memories—and there
are many so-called professionals who profess to be able
to do this—are looking for trouble and financial losses.
Few people can consistently match paint, carpeting, or
sewing material without taking along a color swatch for
comparison. When dealing in the thousands and tens of
thousands of dollars rather than $19.95-a-square-yard
carpet, the diamond dealer needs his own color swatch¬
es, or master stones.
Full sets of master stones run to dozens of dia¬
monds. But most dealers need only a few to mark key
points in their own business—as few as five, or some¬
times even three, often will suffice for field grading.
Master stones are diamonds that have been careful¬
ly graded for color only. They mark dividing lines
between different color grades. When comparing a mas¬
ter stone with the stone being graded, it is comparatively
 INSIDER SECRETS TO DIAMOND DEALING

easy to say "that stone has more color" or "that stone

has less color" than the master stone. The grader then
uses a second master stone, one that marks another
dividing line, to see if the stone has more or less color. By
getting the stone between two successive dividing lines
on whatever color scale is being used, the diamond deal¬
er can grade the stone as to color—an essential step in
determining value.
While the use of master stones is important, it is
also important to keep close track of them. These dia¬
monds are easy to mix up with the stone or stones being
graded—and difficult to locate once again. And no, you
do not put a drop of red fingernail polish on them to aid
identification. That destroys their value as master stones
for color grading.
The causes of color in diamonds vary and are real¬
ly unimportant to most diamond merchants. It is prob¬
ably enough to understand that brown and red (really
pink) colors in diamonds are due to a distortion of the
crystal structure. Green seems to be associated with
changes in the structure of the diamond crystal result¬
ing from radiation (natural or man-induced). Blue dia¬
monds result from nearly infinitesimal amounts of
boron impurities being mixed into the crystal struc¬
ture. Blue-violet colors in diamonds are apparently
linked to traces of nitrogen. Other colors seem to be
linked to a combination of structural distortions and
chemical impurities.
When grading, a diamond dealer has to understand
that when stones are of the same color grade, sometimes
the actual color, whether brown or yellow, makes a dif¬
ference. It is generally easier for people to pick out the
tinges of yellow than it is for them to see browns. For
that reason, when grading browns you must use extra
 DIAMONDS—THE BASIC PRODUCT

care in determining exactly what you have—and how

much you should pay for it.
As mentioned before—and don't forget it—among
the fancy colors the browns and yellows are the most
common. Going up the rarity scale are gray diamonds,
pink ones, and blue ones. In the very rare category
you'll find oranges, greens, and purples/violets. Red
diamonds are almost nonexistent; they're usually a
dark pink at best.
It's important for anyone who plans on dealing in
diamonds to know the market when it comes to color
and color grades. Light yellows and light browns sell well
in many parts of the United States,- bringing those into
the country is a wise business proposition. But Far
Eastern buyers want colorless, pink, or blue stones,-
bringing a parcel of light browns into Japan shows a poor
understanding of the market. In the Mideast and Europe,
fancy-colored stones and darker stones in the normal
ranges do well.
Over the years, there have been many different
color classification schemes, or parts of color schemes.
In fact, this is an area where, until relatively recently,
there was little agreement on what colors really did
mean. Over the past few decades, particularly in the
United States but even overseas, the so-called GIA color
scale has become an industry standard. While this color
scale has yet to become the world standard, it has an
advantage of having some science behind it. It uses fixed
points for color. Most important, it is a framework for
explaining other color-naming systems, which devel¬
oped from tradition rather than science.
The scale starts with idiosyncrasies. The highest
diamond rating on this scale is a D (colorless), not an A.
It goes down 23 grades to Z, which is a light yellow or
 INSIDER SECRETS TO DIAMOND DEALING

brown. Each grade and letter in the scale represents a

range of color, not a specific color.
The ranges are close together, and only a practiced
eye and a set of carefully graded master stones for com¬
parison will allow you to distinguish a D from an E or an
F, particularly in smaller sizes where color does not show
up as profoundly. The E and F color grades are so near to
colorless that many experienced graders have difficulty
on stones under one carat. In stones of a quarter carat (25
points) or less, only the most experienced diamond
experts are able to discern the difference. And for the
most part, F stones under half a carat are rated colorless.
In fact, diamonds in the E and F categories are generally
called colorless by dealers.
Stones in grades G, H, and I usually exhibit color to
trained diamond professionals—but only so long as the
stones are unmounted. When mounted, many of these
stones appear colorless or face-up colorless, even to expe¬
rienced diamond dealers. This is one of the reasons that
knowledgeable dealers in diamonds won't touch a
mounted stone and insist that all stones be unmounted
before they will evaluate them. Stones in the G, H, I, and
J grade are generally classed as near colorless.
In grades below I, the color becomes progressively
easier to see until, at the bottom end of the scale, virtual¬
ly anyone can see the depth of color (depending upon the
stone size) whether the stone is mounted or not.
In the f, K, and L color grades, all large stones will
display traces of color. The flip side of this is that small
stones, when mounted, will face up colorless. Diamonds
with a color rating of M and below, no matter what the
size and whether mounted or not, will display at least a
hint of tint to the untrained eye. The GIA grades of K, L,
and M are sometimes described as faint yellow. Color
 DIAMONDS—THE BASIC PRODUCT

grades N through R are very light yellow, and S through

Z are light yellow. Stones with color deeper than a Z
grade, sometimes called Z+ diamonds, are fancy-colored
diamonds.
While this D-Z grading system is employed exten¬
sively in the United States, in the foreign fields it is used
far less often. Overseas, even though things are changing,
you're likely to be offered something like a Top Silver
Cape or a Wesselton. The name really isn't important;
the value and the salability of the stone are what count.
No matter what you are offered, you are going to
have to grade the color of every stone you are seriously
thinking of buying yourself—no matter what system of
color grading you use primarily. Nonetheless, it's helpful
to know what others are suggesting about the stone's
color when they throw out the terms. So if D to Z and
beyond seemed pretty straightforward (it will be until
you get yourself a set of master stones and actually see
how fine-tuned color grading is), let's throw in a couple
of other grading systems.
A fager stone in one of the older systems is the
name of the top grade. In this system, sometimes called
the Jager-to-light yellow or River-to-light yellow, a Jager
corresponds to a D-grade diamond. A River would be
somewhere in the E or F grades; a River is really about
two grades wide. The Top Wesselton would be a G, and a
Wesselton would grade out to an H. A Top Crystal is an I,
while a Crystal corresponds to about a J. The Top Cape
stone in this system would be comparable to a K or L—
this is another classification that is two grades wide. A
Cape is an M in this system, and a Low Cape is about an
N color grade. At O and below, diamonds are just very
light yellow or very light brown, with no differentiation.
There is at least one other system that is used wide-
 INSIDER SECRETS TO DIAMOND DEALING

ly—one you need to understand because sooner or later

someone will start talking to you in these terms. The top
grade in this system is finest white. For comparison,
stones in the top category really cover the D and E color
grades. Fine white is a term that some would call dia¬
monds in the F and G grades. White is equivalent to an
H. A commercial white stone equals an I-colored dia¬
mond. The Top Silver Cape covers everything in the K
color and the top half of the K color. The bottom half of
the K color and L are interchangeable with a Silver Cape.
A Light Cape would fall into the M and N categories. A
Cape would grade out anywhere in the O, P, or Q cate¬
gories and the upper half of the R category. A stone with
a color in the bottom half of the R grade or below would
be a Dark Cape.
At the outset there's not an awful lot of reason to
learn all these systems. Choose one, get master stones
for it, and use that one. You'll pick up the other systems
as you go along; you'll understand the relationships
between the different systems when you have to pick
them up. For my money, the letter system makes more
sense and has more utility as a base system. Flowever,
you can use any system as a base and translate it to other
color grading systems as need be.
To make things easier for yourself when grading,
turn the stones—both master stones and the diamond
being graded—onto the stone's table and view them
through the bottom, the pavilion. Because of the
mechanics of light transmission, the minute color differ¬
ences are usually more discernible when the stones are
viewed through the pavilion or the girdle, the widest part
of the stone.
There's a final factor that you have to take into con¬
sideration when doing color grading: the environment
 DIAMONDS—THE BASIC PRODUCT

you'll be working in. That's not to say that you're going

to get the ideal environment or anything close to it. The
fact is that what you're going to want in terms of light
and background is seldom available "in the field" for
many transient diamond merchants.
The industry standard for lighting is natural sun¬
light from a north-facing window. Ha. Far too often you
may end up grading by flashlight. There are special
lights for diamond grading, available through jewelry
supply merchants, that can be carried and used under
optimal conditions. Whether this is a wise idea is open
to interpretation since the possession of one of these
lights is a clear tip-off to Customs authorities and oth¬
ers who are interested that you have a professional or at
least serious concern about the minutiae of diamond
colors. That leads to embarrassing questions and dan¬
gerous conclusions.
In any event, it is important to be aware of the role
that light, and even the surrounding environment, have
on diamond color, and to try to at least take any probable
effect into consideration. It's important to know and
remember that brown walls and nearby accoutrements
will mask yellows, but blue walls and background sur¬
faces will emphasize the yellow color of diamonds.
Always keep the color of the grading environment in
mind when buying and grading diamonds; those who
don't end up losing.

CLARITY

Clarity is the term that refers to internal or external

features called clarity characteristics. Most people sim¬
ply call them flaws.
Breaks, or visible foreign bodies within a stone, are
 INSIDER SECRETS TO DIAMOND DEALING

inclusions. Imperfections on the outside, such as

scratches, are blemishes.
Blemishes come in many different sizes and types.
The most common types are nicks, knots, scratches,
abrasions, minor cracks and cavities, and poor polish.
Rarely seen blemishes include a large natural (the unpol¬
ished skin of the diamond) and an extra facet, which is
visible on or through the crown of the diamond.
The more of these features in or on a stone, the
lower the clarity grade and the lower the price. The fact
is that while imperfections rapidly lower the clarity
grade and send the value plummeting, except in badly
flawed stones these clarity characteristics have precious
little effect on either the durability or beauty of a stone.
Value, remember, is based not on beauty but on rarity.
As with so much in the diamond world, price
depends on rarity. The diamond trade caters to the con¬
noisseur. The diamond merchants try to tell the world it
has to go along with their definition. It's as if I, for one,
like American champagne, which is virtually indistin¬
guishable from the imported product. But the market
keeps trying to tell me that I've got to buy the French
stuff or I'm not really with it.
The fact is that nothing in nature is ever flawless.
So-called flawless stones are flawless only because of a
definition: if a trained grader, working with a 10X power
magnification under controlled light conditions, can't
find a blemish or inclusion, the stone can be called flaw¬
less. But that doesn't mean there aren't imperfections in
a flawless stone that could be seen with a 20X loupe or
100X magnification. The fact is that there generally are.
However, the trade has defined perfect to mean that any
imperfection has to be visible to a trained grader using
10X magnification.
 DIAMONDS—THE BASIC PRODUCT

After perfect there are series of clarity grades. All

these grades, down to imperfect, contain clarity charac¬
teristics that can be seen with a 10X loupe. But with
some grades it's hard to find the flaws, and with others
it's easy.
At the imperfect grades the flaws and marks are vis¬
ible with the naked eye, or they affect the durability of
the stone. But for every grade between flawless and
imperfect, there is really little or no discernible effect on
beauty, appearance, or durability. There is just one whop¬
ping difference in price.
Below imperfect grades come the industrial grades.
These are grades so flawed that they are considered, in
the trade, only usable for industrial purposes. They are
supposed to be priced accordingly. But some unscrupu¬
lous jewelers have been buying better-quality industrial-
grade rough and having it cut into jewelry-type stones,
selling it at what is supposedly a cut rate to people who
know no better. Always assume, until you've tested the
theory and found it wrong, that any diamond merchant
who is selling outside the trade is trying to palm off
stones of this quality for an inflated price. And anyone
selling to a person he believes might be planning to
smuggle the stones is selling outside the trade. Caveat
emptor! Remember that just because a stone tests out
physically to be a diamond doesn't mean it is a gem-qual¬
ity stone or that it is valuable.
While the public believes that inclusions are a nega¬
tive, to those in the diamond trade inclusions are actual¬
ly a boon in one way. They help separate many of the dia¬
mond simulants (fake stones or other types of natural
stones used to simulate diamonds) from the real thing.
You'll seldom see a purposely produced simulant with
any kind of a flaw that appears to be an inclusion. That's
 INSIDER SECRETS TO DIAMOND DEALING

about the only positive thing that can be said about

inclusions and blemishes, but there is quite a bit more to
say about clarity.
A couple of truisms can help guide the beginning
grader through the thicket. The size of the fault is proba¬
bly the most important key to assigning a clarity grade.
The easier it is to see an inclusion, particularly when the
stone is face up, the greater impact it will have on the
clarity grade and the ultimate price.
Linked with the size of inclusions are the number of
them and their location. When located in certain parts of
the stone, some inclusions will reflect back numerous
times in the pavilion. An internal flaw that shows up
numerous times as reflections will seriously affect the
value of the stone—and its later salability.
Since the clarity grades are better defined than
color, it's possible to talk about them with more preci¬
sion than it is about color.
The apex in the diamond world is flawless. This means
the stone doesn't have any flaws. Wrong. As explained
above, a stone is flawless when no flaws are seen by a skilled
grader using a 10X loupe or microscope. However—except¬
ed from the no-flaws rule are the following:

• Internal graining that does not affect transparency

and is neither whitish, colored, nor reflective.

• Small naturals on the irdle that neither flatten the

stone nor affect the symmetry of the diamond.

• Additional facets on the pavilion that are not visible

when the stone is viewed face up.

Internally flawless (IF) stones are diamonds without

inclusions, but which nonetheless have some minor sur-
 DIAMONDS—THE BASIC PRODUCT

face blemishes. In most cases, repolishing the stone

would make it flawless.
Extra facets on the crown, large naturals, and surface
grain lines are among the features that mark the IF stone.
The next step down is the very very slightly
included stones (VVSj and WS2). These stones are so
slightly flawed that even skilled graders have difficul¬
ty detecting the flaws under 10X magnification. Such
stones are often sold as flawless by perfectly legiti¬
mate sources who just cannot see the minor flaws,
which might include slight bearding of the girdle or
some internal graining that is reflective. VVS j inclu¬
sions are considered very difficult to see; the inclu¬
sions in a WS2 are only difficult to see!
The flaws in very slightly included stones (VSj
and VS2) are considered to be relatively visible to a
trained grader under 10X magnification. While they
are slightly difficult to see in a VS j stone, they are
somewhat easy to see in a VS2 stone. Tiny included
crystals, small feathers, or pinpoints, are among the
various flaws that mark a diamond in this category.
For a stone to qualify for a very slightly included rat¬
ing, none of the flaws must detract from either its
beauty or durability.
Slightly included stones (SIj and SI2) have defects
that are fairly easy to see under 10X magnification—but
none of the faults may be visible when the stone is viewed
face up with the naked eye. Typically the defects in an SIj
are easy to see under 10X magnification, and they are very
easy to see in SI2 stones. In some cases in the latter catego¬
ry, the defects are visible to the naked eye when the stone
is lying table-down on a piece of white paper. Pits, chips,
cavities, feathers, and clouds are among the types of
defects often seen in slightly included stones.
 INSIDER SECRETS TO DIAMOND DEALING

Imperfect stones, (Ij, I^, and I3) have defects that

• are obvious when viewed under 10X magnification

or can be seen with the naked eye,

• affect either brilliance or transparency, or

• could seriously reduce durability, such as large
cleavages.

I3 stones are those in which the entire diamond is

heavily included and/or affected by such severe cleavage
that the durability is seriously affected.

CUT

Cut is what human beings do to a diamond; each of

the other Cs—color, clarity, and carat weight—is essential¬
ly a function of nature. Cut makes the diamond beautiful.
Cut is another one of those diamond terms that
have a couple of different meanings. When used as one of
the Four Cs, it means the proportions and finish of the
diamond rather than facet design or shape.
Proportions are the relationship between the weight
distribution, cutting angles, size, shape, and symmetry
of a stone. Facet shape, placement, and polish of the
stone constitute the finish.
Cutting has evolved over hundreds of years, but it
wasn't until the early 20th century that the laws of
physics were applied to cutting in order to create a cut¬
ting style that balances both brilliance and fire in a dia¬
mond. Unfortunately, relatively few stones are cut to
those laws of physics.
When a diamond is cut to the correct propor¬
tions, virtually all of the light that enters it will be
 DIAMONDS—THE BASIC PRODUCT

reflected back out. The light will bounce from facet

to facet inside, like a billiard ball caroming off the
felt rail. Correct cutting of the diamond to produce
these angles of the facets results in brilliance. The
fire is caused by refraction, or the bending of the light
rays as they pass between mediums of different opti¬
cal density (i.e., diamond and air). The degree of bend¬
ing of the light is dependent on the change of the
speed, or velocity, of the light as it passes from one
medium into another. When the light is bent, the dif¬
ferent colors that make up the light are separated into
different bands. This shimmering rainbow effect is
the fire of a diamond.
But before we go any further, there are a whole lot of
terms you need to know and understand.
The three major parts of a modern-cut diamond are
the following:

• Crown
• Girdle
• Pavilion

There is a fourth, culet, that is often, but not always,

found on diamonds.
All modern stones have the three major parts in
some form. Like the Four Cs, these names must be as
familiar as the words arm or leg. When someone men¬
tions the crown you have to know what he's talking
about—without thinking about it. You don't want to
ever talk about the "bottom" of a stone when you real¬
ly mean the pavilion. A single slip of this type betrays
you as a neophyte and hence someone to be taken
advantage of.
Facets are the plane surfaces of a stone. They are
 INSIDER SECRETS TO DIAMOND DEALING
►

what give a diamond brilliance and sparkle. Without

facets, a diamond is as ordinary looking as a glass mar¬
ble. (In fact, a marble is much better looking than most
uncut and unfaceted diamonds.) The facets of the stone
have names. On a Brilliant-Cut diamond the names are
table, bezel, star, upper girdle, pavilion main, lower gir¬
dle, and culet.
The proportions of a diamond are the ways that the
mass of the stone is spread above and below the Girdle.
In the most exact use of the term, the proportions
include the following:

• Total depth as a percentage of the cirdle diameter

• Table diameter
• Girdle thickness
• Facet angles
• Symmetry
• Finish

33 Crown
Tableside
Bezel

Girdle (enlarged)

24 or 25 Pavilion
DIAMONDS—THE BASIC PRODUCT

# of Facets Name

^ 1 Table

r
/-8

_-16
Bezel facet
Crown main
Main bezel
Kite

Star facet

Upper girdle facet

Break facet
Upper or top half

# of Facets Name

Lower girdle facet

Split
Lower or bottom break
Bottom half

Pavilion main facet

Pavilion facet
Lower or bottom main

Culet (enlarged)
Collet
(May not be present
on all stones)
 INSIDER SECRETS TO DIAMOND DEALING

Crown view Pavilion view Culet

(enlarged)

Crown

Girdle

Pavilion

Profile view

— Girdle diameter
I- Table size -

Crown Crown height

angle
Pavilion
angle

ion depth
 DIAMONDS—THE BASIC PRODUCT

Nearly all diamonds are cut in one of three ways: bril¬

liant, step cut, or mixed. The common thought in the jew¬
elry trade is that the brilliant cut maximizes the bright¬
ness of a stone,- the step cut shows off the best color; and
the mixed cut is a compromise that combines both.
Brilliants are stones in which the facet pattern radi¬
ates from the center toward the edge. They have triangu¬
lar and kite-shaped facets. Brilliants are what we general¬
ly think of as "diamonds."
Step cuts have concentric rows of facets that run
parallel to the stone's girdle.
Mixed cuts are anything else, a combination of step
faceting and brilliant cutting. Often the crown of the
stone (the top) and the pavilion (the bottom) are cut in
different styles.

Cutting and Hardness

Diamonds' durability is high. Durability, in the
trade definition, depends upon two factors—hardness
and toughness.
Hardness refers to a stone's ability to be scratched.
Toughness is the resistance to cleavage. A diamond is
the hardest of all natural stones but has what is known
as an octahedral cleavage that is started, or as the dia¬
mond cutters say, "developed," fairly easily. Despite that
cleavage, it is considered to be among the toughest of
gemstones, as well as the pinnacle of hardness.
Natural diamonds are not "grown" in laboratory
conditions, with precise measurements of ingredients
that produce uniform results. The conditions under
which natural diamonds form are dynamic. The temper¬
atures, pressures, and mix of chemicals that produce one
lot of diamonds beneath the earth's crust are never quite
the same as those that produce another. As a result, the
 INSIDER SECRETS TO DIAMOND DEALING

diamond crystals found in nature differ radically from

one another. Some crystals become distorted or trapped
in the process of crystal growth; impurities among the
ingredients can affect both the shape and the color of the
diamond.
The diamond cutter gets a piece of rock that can be
broken easily at cleavage angles but is hard to saw or cut
and often difficult to polish. The cutter's job is to show
off the most valuable and sought-after combinations of
the diamond rough. The cutter removes, where possible,
the less attractive features or tries to conceal them.
The cutter has a hard job working with a hard
product—common knowledge is that diamond is the
hardest of all materials in nature. Diamonds are inde¬
structible, some believe. Diamonds, so the saying goes,
are forever. Diamonds are not forever. They can be seri¬
ously damaged or even destroyed. Just dropping a dia¬
mond on a desk—if it hits at the wrong angle—can chip
it and virtually destroy its value. The public relations
genius who coined the phrase about a diamond being
"forever" was clearly thinking about what gemologists
call scratch hardness. This is a measure of the resis¬
tance one stone has to being scratched by another. The
Mohs scale is one of the most widely used scratch hard¬
ness scales. And in Friedrich Mohs's scale diamonds
came out on top. There are different versions of this
scale; however, the following is the one most common¬
ly used in the diamond business.

Diamond 10
Corundum 9
Topaz 8
Quartz 7
Feldspar 6
 DIAMONDS—THE BASIC PRODUCT

Apatite 5
Fluorite 4
Calcite 3
Gypsum 2
Talc 1

What this all means is that of natural gemstones,

only a diamond can scratch another diamond, but it can
leave a scratch on all of the other stones with lesser
numbers.
The reality is that on a scratch hardness scale, these
numbers have no relation to one another. A diamond is
nearly 140,000 times harder than talc, while corundum
is about 1,000 times more scratch-resistant than talc.
But topaz is only about half as scratch-resistant as corun¬
dum. The figures in the Mohs scale are not based on any
arithmetical or logarithmic progression. It's not a true
scale, just an observation as to what stone will scratch
what other stone.
Nonetheless, for a long time jewelers and diamond
merchants have acted as if the Mohs scale was a good
test of the authenticity of a stone they were inspecting.
They insisted on using a scratch hardness test to deter¬
mine whether a particular stone was a diamond. Often
they used a stylus-like instrument called a hardness
point. Unfortunately, a hardness point stylus, when
improperly used, can damage the stone. And many dia¬
monds have been damaged or destroyed because the user
didn't understand what he was doing. Other jewel deal¬
ers used—and a few still use—the file test. A jeweler's
file, which rates about 6.5 on the hardness scale, is sup¬
posed to scratch glass but not a diamond. Some jewelers
still use this test to detect glass imitations. But the test
doesn't prove a stone is a diamond—what it proves is
 INSIDER SECRETS TO DIAMOND DEALING

that it is not glass. And since there are a number of hard¬

er stones, both natural and artificial, that can be mistak¬
en for diamond, the scratch test fails to deliver a reliable
verdict on whether the stone is really a diamond. In addi¬
tion, even a real diamond can be badly abraded and
chipped by the file test if the pressure is applied in a
cleavage direction.
The use of a hardness point or a file by any so-called
diamond merchant is a clear indication that he's a "never
was" who will "never be." Avoid this, unless you want
to mark yourself as a rank amateur. That's part of the
reason for this long explanation of hardness
There is another reason as well: when you are deal¬
ing with diamonds, whether they belong to you or you
are carrying them for someone else, remember that dia¬
monds scratch diamonds. When loose stones are kept
together they will abrade one another. Seldom is the
damage severe, even over a long period, but when you're
trying to "deliver the goods," you want to deliver them
in the best shape possible.
Under ideal conditions every stone would be in its
own diamond paper, a specially folded packet. In real life
this isn't possible. Particularly when you're moving
stones from place to place, a diamond paper is as good as
a neon sign to draw attention. (Properly folded diamond
papers all too often look like packets of street drugs.)
When moving diamonds clandestinely, you will have to
discard the papers—trash them in a place where they
won't be found and tied to you—and carry the stones in
some other way.
It is also impractical to store very small diamonds—
the smaller sizes of melee—individually in diamond
papers.
There is another quality of stone that gem dealers
 DIAMONDS—THE BASIC PRODUCT

call toughness, which is the level of resistance of a stone

to chipping, breaking, or cracking. No stone has perfect
toughness. And any diamond will fracture, break, and
even splinter when hit hard enough and at the right
(wrong?) angle. A blow, or even a fall from diamond for¬
ceps onto a hard surface, can cause disastrous damage.
Gem dealers rate stones' toughness as poor, fair,
good, excellent, and exceptional. Depending upon the
angle of the blow, a diamond is generally either rated as
good or exceptional in the textbooks. The reality is that
when struck in a cleavage direction, a diamond is excep¬
tionally vulnerable: it can and does come apart as easily
as sheets of mica.
There is a third term used to describe a diamond's
durability, and that is stability. Stability is a catch-all
category, and it deals with the way the stone stands up to
temperature changes, high heat, and chemicals. Overall,
diamonds are considered stable. Acid has no effect on
them. Cut diamond gems are sometimes affected by
heat. Sharp changes in temperature can cause fractures
in the stone to extend, though this is relatively rare.
Even though diamonds don't burn up like a log in a fire¬
place (technically, they can be burned under some hard-
to-replicate laboratory conditions, but that is not what
we're talking about here), high temperatures will mar
the surface. "Burned" diamonds can be caused by fires in
a home, but they are usually the result of a flub by a jew¬
eler using a torch in his work. This is not a condition
that most people involved in moving stones from place
to place need to be concerned about. However, if you're
buying and selling diamonds you'll eventually run into
one of these burned stones, and you need to know what
it looks like. When badly burned, they will appear
almost opaque. Lesser burns appear to make the stone
 INSIDER SECRETS TO DIAMOND DEALING

cloudy. Inexperienced gem handlers will often believe

the stone is simply dirty and will try to clean it. When a
"dirty" stone looks just as dirty as before after you've
cleaned it, think burn. Repolishing is the only way to
clean up a burned stone.
Diamonds have an affinity for oil and grease. If there
is grease or oil anywhere around, stones will attract it
like magnets. In fact, grease tables are one of the meth¬
ods used to separate diamonds from the surrounding
materials in diamond mining. Diamonds will seemingly
suck the oil right out of your hands. Soon after they get
oily from handling, dirt and dust start adhering to the
surface. That really detracts from their beauty, which
would be important if you were selling stones to the gen¬
eral public. But oily stones are also more difficult to
grade; determining the true value of an oily stone is hard¬
er because inclusions tend to appear more prominent.
The stone also appears darker, particularly when the dia¬
mond is in the lower clarity and color ranges.
For your pocketbook's sake, clean diamonds with
lint-free cloths and cleaning solutions before examining
them. Ammonia-based cleaning solutions work very
well. Some people use alcohol to clean diamonds; it
works but it evaporates so quickly that it is hard to use.
If you insist on using alcohol, use the right kind. And
that means ethyl alcohol. Rubbing alcohol contains
enough oil that it dulls the stone and leaves spots.
 CHAPTER

GETTING THE
“REAL THING"

It is not unknown for an illicit diamond buyer

WHO THINKS HE'S GETTING THE REAL THING tO end Up pay¬
ing diamond prices for something like the bottom of a
Coke bottle.
Diamond simulants are the bane of every dealer,
merchant, and mover of diamonds. Untrained people can
discern no difference between diamonds and many of the
most common simulants. x
The first rule in diamond dealing is to never make
assumptions about the identity of a stone—not even if
that rock comes with a trunkful of Tiffany pedigree
papers. The papers may be accurate, but they may not
match the stone.
In the business it is usually, and traditionally, the
buyer who makes the first price offer. Be wary if a seller
does, particularly if he sets a price at a level that is unbe¬
lievably low. Such offers are usually part of a scam—a
con game designed to appeal to the diamond buyer's
greed. Where the game goes beyond that opening gambit
 INSIDER SECRETS TO DIAMOND DEALING

depends. Often the scam is to sell a good-looking dia¬

mond simulant, usually mounted in a way that makes it
look legitimate, to the buyer at diamond prices. For that
reason, a prospective diamond buyer should be con¬
cerned about the authenticity of the stone. In a few
cases, the would-be seller may be offering a real dia¬
mond—but may plan a robbery when cash is produced
for the stone.
Experience is a hard teacher. And an expensive one.
A few simple lessons will significantly cut the cost of
tuition for the school of life.
Remember: diamonds have brilliance, fire, and lus¬
ter; they are hard. Diamond simulants can imitate some
of these qualities, and a few simulants come close to
matching many of them. But no simulant can match a
diamond in all categories.
When you are checking stones that are represented
as diamonds there are any number of tests that can be
used, but many test for just one characteristic. A simu¬
lant that happens to fall close to the quality you are
testing for can convince you, incorrectly, that you've
got a gem. For that reason, it's wise to keep a list of the
various "diamond indicators" handy and to test for
many of them.

• Diamond has a refractive index (RI) of 2.417.

• Its dispersion is .044.
• The luster is called adamantine.

• Transparency is exceptional.

• The specific gravity (SG) of diamond is 3.52.

• Hardness, on the Mohs scale, is 10.
 GETTING THE "REAL THING

• It is tough in cleavage directions and exceptional in

all others.

• The fracture pattern is step-line.

• Included crystals are unique.

• Polish can be superior, the best possible.

• Facet edges are usually sharp but on a well-worn
stone can be abraded.

• The stone's girdle varies from waxy to granular,-

bearding is common.

• Naturals on the girdle are growth markings, includ¬

ing triangles and quadrilaterals.
• Spectroscopic exams show absorption at 594, 504,
498, 478, 456, and 415.5 nm.
• Wetability is difficult.
• Thermal inertia is distinctive.
• The response to X-rays is transparent. They almost
always fluoresce blue.

These are all diamond indicators. Many of them are

useful, but let's face it—you're not going to be hauling
spectroscopes around with you. As for luster, someone
who is not familiar with adamantine from handling
thousands of stones isn't going to find that trait very
valuable either. To a very real extent, many of the dia¬
mond "markers" are of little use.
But there is help. The diamond tester, or diamond
probe as it is sometimes called, is probably the most
important piece of equipment a diamond dealer can
have. Diamond testers are probably more important
than a loupe. These devices test thermal inertia, a qual-
 INSIDER SECRETS TO DIAMOND DEALING

ity of diamonds that is distinctive from any of the sim¬

ulants. The use of a diamond tester is as simple as
putting the tip of the probe onto a facet or the table of
the diamond. The probe uses a minute amount of elec¬
tricity and tests the surface temperature for an amount
of time when a known amount of heat is added to the
stone's surface. There are only a few things that can go
wrong—such as the probe tip touching a metal prong of
a ring. There are some factors that sometimes need to
be taken into account, particularly with some of the
more inexpensive models, but none of them require a
rocket scientist.
Diamond testers, or probes, range from less than
$200 at the lower levels to about $1,000 for the most
sophisticated versions. Diamond testers are the first and
the most important level of protection that any diamond
buyer can use.
It really makes no sense, but all too often the
"experts" like to use other tests first and then go to dia¬
mond testers for their final decision.
As good as diamond testers are, however, they
should never be the sole test used before laying out cash
for a stone. Using a loupe, the examiner should be check¬
ing for bearding, frosted girdles, and included crystals.
When properly identified within a diamond, these are
pretty good indicators that the stone is indeed a dia¬
mond. Conversely, the appearance of gas bubbles—
which can be mistaken for an included crystal—is a pret¬
ty good indicator that the stone is a simulant. A knowl¬
edgeable grader who understands what a sharp facet and
superior polish really are—and far too many people only
think they know—can often detect simulants because
these qualities arise from the hardness of the stone.
Diamond simulants, which aren't "as hard as dia-
 GETTING THE “REAL THING

monels," just don't "show up" sharp facet edges and pol¬
ish in the same way.
After that, a check of specific gravity is often used.
Since most of the common diamond simulants have
higher specific gravity than diamonds, this is a good test.
However it will not work on some glass simulants and
on some doublets.
Checking for high dispersion is a good test of a dia¬
mond; however, cubic zirconia, synthetic rutile, and
strontium titanate have significantly more dispersive
qualities and can, on that basis, be mistaken for dia¬
monds.
Refraction is a useful, but often confusing, test for
diamonds. Diamond is singly refractive. Some simu¬
lants, such as synthetic sapphire, synthetic rutile, and
zircon, are doubly refractive. On the other hand, simu¬
lants with refractive indexes below that of strontium
titanate show a read-through (nonrefractive) effect.
Simulants have been around virtually since some¬
one discovered that diamonds were valuable. Some of
the desire for simulants was quite benign. People who
couldn't afford the "real thing" wanted to pretend that
they could, and they bought things that could be passed
off as diamonds. Some of the use of simulants came
about as a result of greed. If you sell a stone that costs
you very little and get a high price, you've made lots of
money. Crooks learned early on that there was money to
made by bamboozling the buyer.
What is probably the oldest diamond simulant is
zircon, a natural gemstone that comes in a variety of col¬
ors—and some of it is colorless.
The earliest mass-manufactured simulants were
glass with a heavy dose of lead oxide. Often these were
foil-backed—a thin strip of metallic foil was added to
 INSIDER SECRETS TO DIAMOND DEALING

the backs of these diamonds to reflect more light out

the front of the stone. Paste, the word used to describe
many of these early diamond simulants, is still used in
the diamond trade today when referring to glass simu¬
lants. Rhinestones are simulants made from quartz
rocks,- the name came from the fact that the quartz for
these was first mined in the Rhine Valley. Modern
rhinestones are foil-backed as well, but not by using
the old methods. Instead of foil some type of mirroring
film—it is often seen as a sort of golden or dark-colored
paint on the back of rhinestones—is applied. This is
used by some of the more successful diamond smug¬
glers in their movement of stones, something we will
go into at length later in the book.
Glass doublets were probably the next major
improvement in the fakery department. At first a garnet
top was fused to a glass bottom. The thin top took the
color (or the lack of color) of the glass base and made a
creditable stone. Doublet-making has become far more
sophisticated these days. Doublets are increasingly hard
to detect as advances in fakery are barely matched by
improvements in detection equipment.
There is a new use for glass that the diamond
buyer—particularly one who isn't going to be able to
bring back the gems himself—has to be aware of. Liquid
glass is sometimes used on diamonds to cover up notice¬
able cracks, a relatively new process known as fracture
filling. Done professionally, it may take a close look to
detect, but keep in mind that the difference between
such a doctored stone and a diamond without a crack is a
major one. So that close look can be important.
Unfortunately, there are more than a few people who
would like to pocket the difference in value between
what is essentially a nice-colored, well-cut industrial-
 GETTING THE “REAL THING"

grade diamond and a high-quality stone. You may well

meet people who like to get that difference in value out
of your pocket. Caveat emptor!
Besides the obvious, there are a variety of other
common substitutes. All of them have a legitimate
place in the glittering world of jewelry. But each can
also be used to bamboozle a buyer—even sophisticated
buyers.

ZIRCON

Natural zircon that has no color is fairly rare. While

the substitution of zircon for diamonds is an old trick, as
old as the hills, it had never been widespread until the
20th century. Colorless zircon was just too rare for that
to happen. However, early in the 1900s someone found
that heat treatments were effective in removing the
color from zircon. At that point zircon became the simu¬
lant of choice, and the best at the time.
Zircon has a major advantage over glass. It has
much more brilliance. It also has enough fire that it can
often be slipped in as a diamond simulant. A key point
for the wary buyer to remember is that one result of the
heat treatment of zircon—to make it colorless—is that it
also becomes very brittle. Because of the heat treatment
a set stone abrades easily. Zircon simulants can often be
detected by a close examination of the facet junctions,
which tend to get scratched and rounded off.

SYNTHETIC RUTILE

Rutile is a natural stone, but in nature it is extreme¬

ly rare to find transparent, nearly colorless, gem-quality
stones. However, a synthetic form of this stone, pro-
 INSIDER SECRETS TO DIAMOND DEALING

duced commercially, took over as the diamond simulant

in the 1940s and 1950s.
Although it lacks the brilliance of diamonds, this
crystalline form of titanium oxide is brilliant enough that
people who don't deal with diamonds on a daily basis may
mistake it for a diamond. A giveaway for synthetic rutile is
that it is highly dispersive—its rainbow-like quality is so
strong that even people who are not diamond experts
sometimes question it because it seems far too dispersive.
It is low on the hardness scale, and that means that any¬
thing but a new stone will show signs of wear that would
not be found on a diamond. Synthetic rutile tends to have
a yellowish cast, which may or may not be a clue. Many
diamonds are slightly yellowish as well.
If you want to get a piece of synthetic rutile to test
for yourself (it's always a good idea to have experience
with simulants), the stone is known by a number of trade
names, including Diamothyst, Kenyagem (Kima gem),
Kimberlite gem, Rainbow gem or diamond, Star-Tania,
Titan gem, Titanium, and a variety of names having
derivatives of Titanium in the name.

STRONTIUM TITANATE

The natural counterpart for this stone was not iden¬

tified until nearly 30 years after the chemical compound
first hit the market. It, like diamond, is singly refractive.
It is nearly colorless, which makes it much more useful
as a diamond simulant, and it has dispersive qualities
that, although they exceed that of diamonds, are more in
the order of diamonds than synthetic rutile. For those
reasons it quickly became a substitute of choice.
Strontium titanate lacks durability, hence older stones
will show wear relatively quickly. Even though other
 GETTING THE “REAL THING"

simulants have now outclassed it, strontium titanate

still shows up in the gem market, often as a doublet with
a synthetic sapphire table.
To get a piece look for trade names such as Diagem,
Dynagem, Fabultine, Lustigem, Marvelite, Wellington,
and Zenithite.

YAG

YAG, or yttrium aluminum garnet, revolutionized

two industries: lasers and diamond simulants.
This artificial crystal—it has no counterpart in
nature—is made to resemble the crystalline structure of
garnet. It has a relatively good, but not adamantine, bril¬
liance factor and a hardness that, while not that of dia¬
mond, is impressive (8.25 on Mohs scale).
A major drawback is that it lacks the same fire, the
dispersive qualities, of diamond.
It is often sold simply as YAG, but it is also known
by a number of trade names, including Amatite, Alexite,
Diamogem, Diamonair, Diamonique, Di-yag, Linde, and
Triamond.

GGG

Sometimes used as a diamond simulant is a man¬

made garnet called gadolinium gallium garnet, merciful¬
ly shortened by everyone in the business to GGG. Its
major fault is that it is relatively soft and scratches easi¬
ly. But it is more brilliant and more dispersive than YAG.

SYNTHETIC CUBIC ZIRCONIA

Of all the simulants to date, this is the best. It has

 INSIDER SECRETS TO DIAMOND DEALING

the brilliance or luster of diamond but a little more fire,

though few people, including professionals, would note
that. With a hardness of up to 8.5, it has relatively good
durability. In short, it looks like a diamond and acts like
a diamond in many respects.
Synthetic Cubic Zirconia is known widely as CZ;
other trade names include Diamonique II and Phyanlite.

SYNTHETIC DIAMONDS

Synthetic diamonds are diamonds. They are made

in a laboratory. Gem grade synthetics have not proven
economically competitive with natural diamonds but
may well become so in the near future. However,
remember that diamond simulants are not synthetic dia¬
monds, nor are synthetic diamonds simulants.

TRICKS OF THE TRADE

Buying simulants isn't the only way to be cheated.

Any time you have your own stones out, whether they
are master stones or you are selling, you're vulnerable.
Making certain that you don't get ripped off by
unscrupulous people who want to examine your stones
is important—and easier to do than you think.
When dealing with anyone and showing dia¬
monds, put the stone in a locking tweezers—one that is
distinctively marked—or a stone holder rather than in
diamond papers.
The basic rule is to stay alert and not let people dis¬
tract you from the stone. Whether you're selling or buy¬
ing, the stone itself has to be your focus. Those trying to
sell you a simulant will try to distract you so that you
accept only the surface indications that it is a diamond.
 GETTING THE “REAL THING

Those trying to rip you off when you are selling may be
trying to replace your genuine diamond with a simulant.
You can never assume any stone to be a diamond—
even one you've had in your stock and shown over and
over again. Any time a stone is removed from a case and
passed to a potential buyer, it has to be assumed that it is
a fake until you can verify that it is the same stone.
 «

, . M ■ • .
 CHAPTER

THE TRIP

For someone who is just starting into the business

OF BUYING, MOVING, AND SELLING DIAMONDS, there are tWO
big questions:

• Who do I buy from?

• Who do I sell to?

No one can answer those questions with any speci¬

ficity. Diamond merchants change their habits as time
goes on, as they acquire new contacts, face new chal¬
lenges, and meet new people. Diamond merchants do
not stay with the same people throughout their careers.
The rule is to patronize a source as long as it can give you
the best deal; the corollary rule is to make sure you
always get as good a deal as you can because you've got
to give your clients the best deal possible if you're going
to keep them.
If you're a buyer, you may be doing business in some
fly-infested swamp, talking pidgin French to a native dig-
 INSIDER SECRETS TO DIAMOND DEALING

ger who is offering what he says is a diamond. Or you

may be working the diamond bourses and clubs of a cut¬
ting center such as Antwerp or Tel Aviv.
Where you have a choice, if you have the choice,
take the bourses. The people you'll deal with there are
every bit as cutthroat on the boulevards as they are in
bush, but you probably won't have to compete with
DeBeers when you're working the cutting centers.
In the world of diamonds, a field that has more of
the trappings of a religion than of a business, the bourse
is the college of cardinals. It is here that the hierarchy of
the diamond world congregates, carrying parcels of dia¬
monds worth literally millions of dollars.
There is almost a score of major bourses. Some
cities have more than one. Antwerp, for instance, has
four. Major bourses are located in London, New York,
Antwerp, Tel Aviv, Milan, Paris, Singapore, and Vienna,
as well as other major cities.
Some of the bourses specialize in polished stones,
others deal in rough. The bourse, or diamond club as
some call it, is more than an exchange, though many
people would liken one to a stock or mercantile
exchange.
In fact, the bourse is a country all of its own, with
rules and regulations that are practically inviolate. It has
its own code of conduct, and it deals with the people with¬
in its walls as a medieval parish would have done. Its peo¬
ple may be stern and harsh toward local transgressors, but
the members will stonewall outsiders when it comes to
matters that relate to other members. When disagree¬
ments occur between members, the leaders of the bourse
handle the situation in their own ways. There is no need
to turf the matter to some law court—the members of the
bourse arbitrate the matter for the parties.
 THE TRIP

If the matter reaches beyond a simple disagreement,

if it is more in line with something that a criminal court
should handle, that too is taken care of by the bourse. It
can suspend or even expel errant members. Since all of
the bourses worth going to belong to a world federation
of bourses, and since all the bourses will honor suspen¬
sions and expulsions without exception, the home
bourse has tremendous powers. Suspension or expulsion
by a bourse may not be able to put a diamond trader com¬
pletely out of the business, but one can reduce a cham¬
pagne life-style to a beer budget.
The bourse's laws, most of them unstated, do not fol¬
low the civil law. Rather there is a single rule—always
behave with integrity toward other members of the bourse.
Once a deal is done, the behavior of the buyer or seller out¬
side the walls of the diamond club is irrelevant. However,
inside the walls, a man's word is stronger than any piece of
paper; a hand clasp means more than a signature.
One key thing to remember about trading on the
bourse is that you are dealing with an individual, with a
single person. Companies aren't represented on the
bourse. The men who congregate at a bourse are individ¬
uals. Frankly, most Americans will find that they have a
different social and sexual ethic. Not better. Not worse.
Just different. For the diamond bourse is a man's club.
Women just are not accepted in this trade.
The bourse is a closed club with admission require¬
ments every bit as stringent, though not as bloodthirsty,
as La Cosa Nostra. In general, bourse applicants must
have at least two years of trading experience behind
them. They have to be sponsored by one or more people
who are already members of the bourse. After an appli¬
cant's interrogation by a board that functions as a mem¬
bership committee, his application is thrown out for all
 INSIDER SECRETS TO DIAMOND DEALING

members of the bourse to challenge. Even if unchal¬

lenged, the membership is far from permanent. Even
when admitted, new members remain on a sort of proba¬
tion for their first two years of membership.
If there is a lingua franca of the bourse, it is Yiddish.
Even members of the diamond fraternity who follow
faiths other than Judaism know basic Yiddish. When dia¬
mond deals are made, they are traditionally sealed with a
handshake and the Yiddish phrase for "luck and bless¬
ings," mazel u’bracha.
Diamond sellers—diamantaires as they are called in
the trade—do most of their business at the long tables
that nuzzle up to the windows in a bourse's main room.
By tradition, the high windows face north so that they
afford the best, most consistent natural light for examin¬
ing the stones.
Though they are steeped in tradition and are throw¬
backs socially, bourses have not ignored the modern
world. Most have modern communications equipment
of all kinds, a communications suite that would make a
small military force envious. And while their main
rooms are the key to trades, they have smaller offices
where they can lock up the deal. Those offices afford the
dealers some degree of privacy for negotiations. Bourses
also have state-of-the-art security that is seldom
breached from outside.
A typical bourse may have 1,000 or 2,000 mem¬
bers—though not all of the people will be in the main
room on any given day. It is the bourse members who
function as the first truly free market in the diamond
chain. Before them is DeBeers, and after them is a web
of sellers and resellers that finally ensnares a love-
struck couple who believe, or at least hope, that a dia¬
mond is forever.
 THE TRIP

The chances are against your becoming a member of

a bourse. That said, you'll need to contact wholesalers.
Wholesalers may be a company or a single individual.
Some will buy from many cutters and sell to anyone who
comes along. Others may buy from a single cutter and
limit their sales to other dealers.
Having friends who can tell you who the dealers are
and their specialties is important. Even better than infor¬
mation are introductions. For people who are moving
diamonds from one location to another, their source may
be a wholesaler in Belgium, Brazil, Israel, or India, and
their client may be (will probably be) a wholesaler in
their home country.
For most dealers who specialize in moving stones
internationally, it's a matter of knowing who as much as
what—and the who has to be learned by some process
other than a book. The diamond trade is based on trust,
and no text can be a substitute for the personal trust.
Letters, or letters and phone calls, of introduction are the
key that opens doors, and diamond papers, to you.
As for payment, until they know you very well,
virtually all wholesalers want to see your money
before they hand you a parcel of diamonds. Don't
expect to get the stones on credit, or, in the diamond
argot, "on memo." That means you need to work out,
in advance, how you are going to transfer the money to
pay for the diamonds.
Cash talks. Enough said.
Getting a good deal depends on many different fac¬
tors. Having cash at the ready is one. But there are others.
Since grading is a time-consuming business and
time is money, many buyers who are good at grading
improve their buying power by patronizing dealers who
keep their costs lower by selling stones they haven't
 INSIDER SECRETS TO DIAMOND DEALING

carefully sorted themselves. For graders who know what

they're doing, this is a worthwhile tactic. For neophytes
at the business, buying into ungraded parcels can be a
ticket to disaster.
A buyer who can take a large parcel off a whole¬
saler's hands and give him money in return will general¬
ly fare better financially than one who buys a small
selection of stones. With a bulk buyer the wholesaler
doesn't have to take the time to sell the rest of his goods
to other customers. It saves him time and energy.
In this business, time equates to money and the
wholesaler can give part of that back to you—if you bar¬
gain with him for it.
Whereas your activities overseas and the places you
go are important, the fact is that it's the small things you
do before you ever leave home that can make or break
your business.
The military refers to it as preparation for overseas
movement, or POM. When going on a business trip, the
diamond mover and merchant has to plan as meticulous¬
ly and prepare as thoroughly as any military force. A fail¬
ure to do so has the same consequences it would to a mil¬
itary force—capture or worse.
The first consideration is how many of you there
will be on the trip. Single-person efforts are more com¬
mon, more profitable, and less involved. They are also
much more risky.
Having a two-person team is the best way. That
doesn't mean that the two people should travel together
or stay together. In fact, the two should go separately,
starting from different cities and on different flights
when possible. They stay at different hotels or lodgings,
generally fairly near to one another, in the same city.
The one-man show can cause serious problems for
 THE TRIP

the diamond merchant who is not playing strictly by

the book. This is because the gear you need to carry
with you—loupes, scales, diamond testers, among oth¬
ers—are a clear signal to any customs agents or baggage
inspectors that you're interested in expensive stones.
Even the dullest public servant at home or abroad can
put two and two together—and if it's noted that you're
carrying loads of jewelry equipment on entering a
country, that information may get passed along to the
powers that be. Just a note in a file, or adding your
name to a typed list of people who deserve extra atten¬
tion upon leaving or entering, can be dangerous. In
such a case, ditching the equipment when leaving—an
expensive proposition—won't even be of much help.
Customs agents may well have already noted to give
you special attention on leaving. The lack of equip¬
ment and supplies in that case under those circum¬
stances will only highlight the clandestine nature of
your activities and make authorities more curious.
But that's getting ahead of the game. The diamond
mover should have a vouched-for contact before leaving
home. Trying to go overseas and "find" someone to deal
with is the surest road to disaster imaginable.
The diamond mover needs to find out as much
about the city where the transaction will take place as he
can. If he's never traveled to that particular location, a
thorough and serious study of maps and travel books
(available at large bookstores or through map makers'
catalogues), as well as careful coordination with travel
agents, are required. Discussions with people who have
been there before can be most helpful.
Although written words never replace actual experi¬
ence, the diamond merchant can get a fair idea of the
overall danger level in the area he is going to by consult-
 INSIDER SECRETS TO DIAMOND DEALING

ing the State Department's Consular Affairs hotline and

fax service for information.
These reports generally contain information on
entry requirements, locations of embassies and con¬
sulates in the United States, crime information, security
data, and usually the phone number and address of the
U.S. consulates in the area where you'll be working.
That information, particularly the consulate informa¬
tion, is invaluable if a problem arises.
That information is available by calling the State
Department Bureau of Consular Affairs automated fax
system at (202) 647-3000 from a Touch Tone phone.
You'll get further instructions on the line. If they're con¬
fusing, get the list of publications. You order that sent to
your fax by pressing the star (*) key, then the number (#)
key, and when you are told, the start or connect button.
Once you've received the list—it's about six to ten pages
in length—review it for the information you need. Then
order the information you need.
There is another State Department fax number that
can provide useful "background notes" on selected coun¬
tries: (202) 736-7720.
Use this service, but use it wisely and be discreet
about it.
It is important to prepare for the worst—getting
busted overseas. The Consular Affairs hotline is appar¬
ently no stranger to people who have legal problems, and
they have a set of reports on the court system for many
countries overseas. It is always wise to check whether
your country is covered.
When you use a team of two persons, the one who
will make all the contacts carries the equipment in and
out. That person does the bargaining and buying, evalu¬
ates the stones, and passes the money. When the bargain-
 THE TRIP

er gets possession of the diamonds, he then passes the

goods over to the second person—the courier—who will
actually move the diamonds out of the country and into
another nation.
The courier serves in a number of other capacities.
The courier is not a mule who lugs the load but has to be
a calm professional. Most important, the courier is a
backup to the buyer if the buyer gets in trouble, for
instance, or disappears. In the event of trouble, the couri¬
er notifies friends or relatives back in the United States
and has them formally start a search, contact diplomatic
officials, get a lawyer, and so on.
The courier in a team, at all times, maintains a
strict separation from the purchaser. Messages are passed
between the buyer and courier through blind drops and
innocuous codes whenever necessary. The two can see
one another, and probably should see one another, at
least once a day. But except for the necessary communi¬
cation of information through drops and codes, and the
one-time passing of the stones, the two should never
even acknowledge the presence of one another.
The once-a-day security and safety check should be
planned in advance so that both of the parties will be
lunching in the same cafe, walking down the same
street, at the same time, on the correct day. This is a
visual check on health and welfare only, and the two
people never make verbal or other contact at this time.
The purchaser makes the contacts, examines the
stones, and makes the financial arrangements for the
transfer of the stones to him. After the stones are in the
hands of the buyer, he drops contact with the seller and
transfers the diamond or diamonds, usually at some brief
meeting. For instance, the two might arrange to sit on a
bus next to one another. The package of stones can be
 INSIDER SECRETS TO DIAMOND DEALING

transferred through a rolled-up newspaper that the buyer

gives the courier, who asks if he can read the newspaper.
There are numerous similar methods of handing off the
stones,* this is only given as an example.
The hand-off is the only time the two should ever
talk to one another, except in an emergency.
The buyer, having disposed of his goods to the couri¬
er, can then go about doing other things. Perhaps the buyer
will travel elsewhere or catch a plane to depart for home.
When using a two-person team approach, the buyer
should always leave the country first and return to the
country where the stones are being brought in first.
Why? The buyer is clean,- the buyer is carrying no
stones. But at least one person, the seller, knows who the
buyer is, and the authorities may know as well. The fact
is that far too many sellers play a two-faced game. They
will sell stones to a buyer whom they suspect will not be
declaring the stones properly and then quietly inform
the authorities about the transaction. The authorities
search the buyer's belongings, and person if need be, and,
"fortuitously," just happen to turn up the stones. The
seller has his money. The authorities have their man.
And everybody's happy except the unlucky buyer who
no longer has the stones or the money—but is facing a
hefty legal bill.
When the buyer goes home first, if the courier and
the buyer have been circumspect in their contacts, the
authorities will probably have no inkling of where the
stone or parcel actually is. They will most likely
assume that the buyer has possession of it and will
search him thoroughly. Extra special attention to the
buyer by Customs authorities when he returns to his
home country is a tip-off that someone, probably the
diamond seller, has been talking. It is also a signal that
 THE TRIP

the courier should be taking extra special precautions

since someone knows that there are some diamonds on
the loose.
To confuse Customs authorities, some buyers seek
out the places where international air crews stay and
recreate, then make a special point of making friends as
"one American to another," or something along those
lines. Since much of the International Diamond
Smuggling (IDS) done these days involves members of
flight crews, the contact between the diamond buyer and
any member of a flight crew sets tailing Customs offi¬
cials off on a wild goose chase, thinking that they see
through the ploy.
What should the buyer and the courier be doing
overseas, and what reason do they have for being where
they are? Good cover stories are essential. The unvar¬
nished truth will never do! Even if everything is done in
accordance with the laws and customs of every country
conceivably involved in the transaction, it is foolish to
advertise that you are on a diamond-buying (or selling)
trip. Crooks can smell money, and if they smell the kind
of money that it takes to buy diamonds, even on a black
or gray market, you're in danger from another direction.
That's a direction where scruples don't count.
The mention of the word scruples brings us down to
another issue—snitches.
There is often a very real reason for someone to turn
a diamond smuggler in—the money they can get. The
power of this incentive is clear from a 1994 incident in
Sierra Leone where the government offered 40 percent of
a subsequent sale price as a "fee." In due course, along
came some illegal Lebanese dealers who acquired a 172-
carat stone. Not long afterward, acting on a tip, police
seized the diamond and the dealers. A month later the
 INSIDER SECRETS TO DIAMOND DEALING

stone sold for $2.83 million. You can live right nicely on
40 percent of $2.83 million I'm told.
Snitchery is a way of life in DeBeers country. And
DeBeers country is anywhere it says it's interested in.
Some people feel perfectly confident in going into
DeBeers territory and trying to beard the diamond devil
in his den. You won't be getting that kind of advice here.
DeBeers controls most of the diamond business,
from mining to what are, in effect, wholesale sales at the
cartel's sights. It doesn't control all of that business and
may not want to have a lock on it all, though the latter
comment is just kindly speculation. The fact is that
most people in the field feel that DeBeers gets a little
testy about people coming in and buying from illegal
miners,- the company seems to become a bit upset about
stones that go outside its channels anywhere along the
line during the first part of the diamond chain.
It is not surprising that most people in the business
feel that DeBeers's agents hear about anything and any¬
body dealing in diamonds. And if DeBeers's people hear
about free-lancers in the field, and if they got up on the
wrong side of the bed that morning, and if their superiors
are telling them that a few too many stones are getting
away, then ...
In fairness, DeBeers agents probably aren't as dan¬
gerous as the trade talk tends to paint them. But why
take chances with the rest of your life? DeBeers has been
accused of just about everything imaginable, including
promoting a civil war in Angola so that wildcat diggers
and stone poachers could exploit the alluvial deposits
while DeBeers buyers soaked up the liberated stones like
a sponge absorbs water.
Supporters of the DeBeers monopoly—and there are
many, especially high up in the government of almost
 THE TRIP

every country where DeBeers does business—seem to

have a different view of the company that is more a
country than a cartel. Their view is benign. Such sup¬
porters of DeBeers would maintain that the monopoly
just had to gather in those stones from wildcat diggers in
Angola. Why, they'll tell you, the monopoly's firm
action stabilized prices for investors and engagement
ring buyers alike while it kept up the quality of dia¬
monds being sent for cutting. Noblesse oblige! What a
great bunch of guys.
Whatever others say, just remember: DeBeers's peo¬
ple act on behalf of no government. They are not respon¬
sible to any voters. They have to follow no constitution.
They have no constraints except success, success at
keeping all the stones inside their own economic
pipeline. They may tell you they have to follow the law
of whatever country they're in. Even if that's true, there's
no reason, if you get in their way, that they should not
cheerfully turn you in to Customs or whatever agency
they have reason to believe may have jurisdiction over
you and your future.
The bottom line—the one that's good for your bot¬
tom as well as your bottom line—is don't mess with
DeBeers until you've got as many employees, as much
money, and as many governments under contract as it
has. It is smartest to confine your transactions to the
area DeBeers seems less concerned about. Forget about
dealing in diamond rough; deal with finished stones and
you'll find that your path isn't strewn with the most
explosive of land mines.
 CHAPTER

MOVING THE
GOODS

The list of ways to move stones without detection

is inexhaustible. The methodologies of smuggling are so
vast that the largest diamond firms don't even try to sec¬
ond-guess the would-be smugglers.
At diamond mine sites, particularly in areas where
diamonds can be most easily found by workers without
anyone else being aware, it's as though the mine opera¬
tors simply defy some law of gravity. What goes up must
come down, but what goes into one of those sites does
not come out. The diamond mine area is like a black
hole, pulling in items that will never be seen again.
Vehicles, consumer goods, even some children's
toys, may be imported into the mine zone. However,
they do not leave again. Workers, when they leave, may
be able to take their clothes and a few valued items—
but only after lengthy inspections (of days, not hours).
Vehicles have too many nooks and crannies in which
to hide diamonds. Any vehicles that have ever been
inside the mine area remain there. Period. Vehicles
 INSIDER SECRETS TO DIAMOND DEALING

from outside are not allowed to enter the area,* visiting

drivers leave their own vehicles outside and get a vehi¬
cle owned by the diamond mine at the gate. They can
drive that inside the mine compound but must leave it
inside the gate and pick up their own cars when they go
out again.
Large consumer goods are just as hard to search
effectively as a car, and for that reason they too remain
inside the fence once they are brought in.
Children's toys seem to be a favorite with smugglers
who hope to rely on the warm and fuzzy feelings adults
have toward kids in order to conceal contraband. For that
reason, Customs agents and others involved in anti¬
smuggling operations worldwide will zero in on toys,
particularly stuffed toys, whenever they see them. Some
in the business—perhaps the brassiest in the business—
will carry a stuffed teddy bear in their luggage. If a
Customs agent has any inkling that the person may be
carrying undeclared merchandise, that teddy bear is like
a lightning rod. They'll go right to it and will sometimes
become terribly frustrated when they don't find any¬
thing. After tearing the stuffed bear apart, squeezing out
your toothpaste, and so on, they'll be muttering under
their breath when they let you go.
This is one of the reasons why a two-person team
makes the most sense when moving stones from one
country or location to another. If the authorities have
been tipped off, they'll search the person who was identi¬
fied as the buyer from attic to cellar. They know the guy
bought something, but they can't risk disclosing the
source of their information. They have to make it appear
that, just by dumb luck and good intuition, they stum¬
bled across the smuggled goods. (When, as the authori¬
ties occasionally do with a big haul, they put out a state-
 MOVING THE GOODS

ment or press release crediting luck, you can usually bet

money they're trying to cover a snitch.)
When the buyer of a team undergoes an excep¬
tionally thorough search by Customs on arrival back
in his country, that's a pretty solid clue that they were
just waiting—waiting because someone told them
something. That's the time when a decision has to be
made whether to keep the stones offshore for a little
while, waiting for things to cool down in the ice busi¬
ness, or whether to rely on the courier's wits, imagi¬
nation, talent, and intelligence to bring the shipment
in anyway.
Who makes the best courier? It has to be someone
who blends in, who can give a good reason to be outside
the country. Members of ship or air crews are among the
most sought-after couriers in the business. Their work-a-
day jobs are a natural camouflage for their operations.
The sex of the courier isn't as important as other
factors; both men and women can be flighty, nervous
types, which is the last thing you want in a diamond
courier. Customs officials don't seem to favor either men
or women in their searching. Of course, if you're plan¬
ning on a body cavity carry, then obviously women are
twice as qualified as men, particularly at certain times of
the month when Customs agents may not be as careful
as they should be about inspecting everything.
From my experience women, as a whole, often per¬
form better under stress than men. They have a better
intuitive sense of problems and possible solutions.
Women, for a number of reasons having to do with their
perceived role in life and society's norms, have had a
great deal more experience in saying the right thing, in
choosing the right tone, than men. They know better
than men when to be aggressive and can play a passive
 INSIDER SECRETS TO DIAMOND DEALING

role far more effectively than any man. For my money,

women couriers are far better than men.
If your courier doesn't have a great alibi job—air or
ship crew member, for instance—then it is important to
develop, learn, and live a good cover. Women are really
very good at going abroad innocuously, claiming they're
looking up genealogical records, and actually making
that story stick. (That, by the way, is one of the better
ones to explain what you're doing on your travels—pro¬
vided you've thoughtfully included correct genealogical
research materials in your luggage.)
But no matter what the cover, no matter who the
courier, there comes that moment of truth when some¬
one has to go through Customs.
Unless you're doing an invoicing scam and declar¬
ing the diamonds (but declaring them as less valuable
grades and colors), you can't admit that you have the
stones when you enter the country. They either have to
be (1) invisible (sealed in a toothpaste tube or carried in a
tampon, for instance) or (2) camouflaged so that they will
be mistaken for something else. Most smugglers of
stones opt to make them invisible. My belief has always
been that it is best to put things out in plain view.
For the people who prefer to make them invisible,
Appendix B is a list, obtained in a roundabout manner,
from a U.S. government agency of likely places where
contraband may be hidden. Frankly, it would seem to
be folly to use anything on that list—these are the
places the inspectors are trained to look. Nonetheless, I
know people who do all right with the hidey-holes
found in the appendix.
If you believe, as I do, that the smartest move is to
put the stones out for all to see, you'll develop some
much different techniques.
 MOVING THE GOODS

In some cases, just before going overseas it's easy to

make a declaration to Customs that you intend to take
your foreign-made camera, your Rolex watch, and sever¬
al valuable pieces of personal jewelry (rings, pins, or
other jewelry if appropriate people are going with you).
The items are as described—the stones in the rings are
diamonds of good color, cut, and quality, and about the
size you intend to bring back. After registering the items
it's not hard to quickly unmount the actual stones, pass
them to a friend seeing you off, and slap in pieces of good
paste in their place.
Once you have acquired several parcels of the good-
quality stones overseas you can unmount all the fakes,
replace them with the real stones, and travel back—
declaring part of the diamond purchases, the part that is
still in diamond papers. It's important to make certain
that all the paperwork matches the stones you are
declaring, and that the camera, watch, and jewelry
declared on the way out match the items brought back
in. You pay for the declared stones and show the outgo¬
ing declaration, and everyone seems happy. But you'll be
happiest of all.
This method requires a little skill in stone setting,
as well as some basic jewelry-setting tools and find¬
ings. When a courier's help is available, you can use a
variation on the theme that actually requires little jew¬
elry knowledge.
Carry over some medium-range costume jewel¬
ry—good enough that it clearly isn't five-and-dime
quality, but not so good that even the densest of
Customs agents can't tell that it is fake. Again, after
you have purchased the new stones overseas, the fake
stones are removed from the pieces of costume jewelry
and the real diamonds are set—quite often literally
 INSIDER SECRETS TO DIAMOND DEALING

glued—in their place. Often, the smartest smugglers

will carefully paint the pavilion of the diamonds with
gold paint. This changes their optical properties, mak¬
ing them seem less than adamantine, and conforms to
the way that some paste stones are backed. A note of
caution needs to be sounded here, however: if you paint
or treat the backs of any of the stones in a piece of cos¬
tume jewelry, do it to them all. Make certain that the
backs of all the stones match.
The piece (sometimes pieces) of costume jewelry is
then passed to the courier at the one "meet" allowed per
trip. The courier brings the diamond-bearing costume
jewelry back with a jumble of other costume pieces. (A
woman can bring it back as her own,- a male courier
needs to say that it is gift for a wife or girlfriend and
should have a sales slip for a piece of costume jewelry
that generally matches what would be the expected
value of the jewelry.) This method works well when
dealing in batches of stones of smaller-size (.5 or .75
carat) or multicarat stones. Larger diamonds can be foil-
backed with red, green, or blue foil to give them the illu¬
sion of being fake rubies, emeralds, or sapphires, or their
color can be changed with paint on the backs.
In any event, the stones are hidden in plain sight.
They are in the last place most Customs agents expect
them to be—in front of their noses.
Other variations of this tactic are to sew or glue the
diamonds—made to look like fake stones by coating the
backs—to other forms of clothing. Souvenir hats or caps
"feminized" for women by the addition of rows of
"rhinestone" diamonds are one way of bringing stones
back. Real diamonds can be substituted for rhinestone
decorations on virtually any piece of clothing, or any
other item for that matter. Men can get away with bring-
 MOVING THE GOODS

ing back gaudy jewelry boxes, ornaments, and so on, as

"gifts." But again, it's always important to declare the
items and have some kind of invoice or receipt to verify
that you did, indeed, buy the item abroad.
The key to all these methods is simple—no one
expects you to be smuggling anything as part of some¬
thing you took out of the country, or as part of some¬
thing that you have declared.
 THE LAST WORD

Whatever you do in the future, remember to leave

this book at home when you go overseas. There are few
things that are more likely to get your bags ripped apart,
stitch by stitch, at Customs than the discovery of this
book in your luggage.
You might also have to submit to numerous physi¬
cal indignities, such as body searches, when they don't
find anything. In any event, you're likely to be late for
your connecting flight!
And remember—under no circumstances admit to
anyone that you have ever smuggled so much as a match-
stick. Honesty is never the best policy when it comes to
Customs officers.
And—mazel tov\
1

'
 GLOSSARY

Adamantine—A term describing the luster of a diamond,

and only a diamond.

Alluvial stones—Rough stones of any kind, including

diamonds, that have been carried by water and deposited
on shores, in the sea, in lakes, or along stream beds.
Alluvial stones may be found in dry areas that were once
under water or were formerly the course of rivers and
streams. The largest alluvial diamond recorded was
found in Sierra Leone in 1972, the Star of Sierra Leone,
weighing some 970 carats.

American cut—See ideal cut.

Baguette cut—A type of step cutting. Small rectangular

or trapeze-shaped gems, including diamonds, are cut in
the baguette style.

Base—The same as a pavilion of a stone, the portion of

the diamond below the girdle.
 INSIDER SECRETS TO DIAMOND DEALING

Bearded girdle—A girdle that lacks the waxy luster and

smoothness of a well-fashioned stone, often because it
was rounded up without care. This type of girdle, which
will sometimes be termed rough, has a granular appear¬
ance. Often the fashioning process has created many tiny
hairline fractures extending into the stone from the gir¬
dle, hence being bearded. This is sometimes called a
fuzzy girdle.

Bezel—The sloping top surface of the diamond down to,

but not including, the girdle. Often, it is used correctly
to describe the entire portion of a brilliant-cut gemstone
above the girdle. When the word is used in this manner it
is synonymous with crown.

Bezel facets—On a brilliant-cut gem, the eight crown

facets that touch the table with the top points and the
girdle with the bottom points.

Black center—In some diamonds, ones with an extra

thick pavilion, the angles allow light that should be
reflected back out the top to leak through the bottom.
This causes the stone to have a dark center. This black
center, referred to by some dealers as a well, is caused by
a cutter attempting to retain extra weight by refusing to
cut to ideal proportions.

Blemish—An imperfection on the surface of a diamond.

Bourse—Diamond sales club, usually restricted to

males, in major diamond markets.

Break facets—In a round, brilliant-cut stone, these are

the 32 facets that touch the girdle, half of them above
 GLOSSARY

and the other half below the girdle. Also called girdle
facets.

Brilliant cut—The cutting of a diamond most popularly

associated with the gem. The brilliant cut has 32 facets
and a table on the crown, the area above the girdle. It has
24 facets and a culet below the girdle, on the pavilion.

Bruise—A term diamond dealers use for a mark on a

stone that results from a sharp impact. It is often seen as
a small whitish mark on the stone, sometimes with a
four- or six-sided shape. Percussion mark is another term
for this.

Carbon—Any inclusion in a diamond that appears

black, particularly if it can be seen without magnifica¬
tion. They key word here is appears black. The term
does not mean that the inclusion is either carbon or is
actually black.

Carbonado—A type of diamond that gem dealers do not

have to deal with. However, for diamond merchants who
deal in industrial-grade materials, this is the apex.
Carbonado is a mass of minute diamond crystals—often
black, brown, or grayish in color—and is considered to be
the toughest form of diamond. It is highly sought after
for many industrial purposes.

Comparison stones—These are fashioned stones of

known color grades used to compare with stones being
graded to determine body color. Sometimes called mas¬
ter stones or, less frequently, key stones, these are essen¬
tial in color grading. Despite the claims of some that
they can remember colors, the vast majority of the evi-
 INSIDER SECRETS TO DIAMOND DEALING

dence shows that relying on memory to grade the subtle

colorations of diamonds will eventually turn out to be a
costly mistake.

Crown—The top surface of a diamond, from the table of

a diamond down to but not including the girdle. It refers
to the portion of a brilliant-cut gemstone that is above
the girdle.

Cubic crystal system—Also called the isometric crystal

system. This is the system of crystals to which dia¬
monds belong.

Diamond doublet—This is also known as an assembled

stone and is basically junk. Often a doublet has a crown
of diamond joined to a pavilion of some colorless stone.
Sometimes a doublet consists of two pieces of diamond
glued together.

Diamond lamp—Any lamp designed specifically for use

when grading, or inside diamond display and sales cases,
to show off the stones properly.

Diamond paper—A paper sheet folded in such a way

that it will hold one or more diamonds without coming
open. Often, information about the diamond or dia¬
monds—such things as weight, prices, color, or clari¬
ty—are written on the front or a flap. The paper is usu¬
ally durable. Often an inner liner of one or two sheets
of thinner paper is used.

Diamond pipes—The core area where diamonds are

found. From miles under the earth, where diamonds
are created, a glob of diamond-carrying magma follows
 GLOSSARY

weaknesses in the crust of the earth until it gets near

the surface. Pressure building from below forces the
magma through the surface, creating a cone. Pipes are
a diamond-bearing stream of rock, shaped somewhat
like a carrot.

Diamond powder—An abrasive made of diamond dust.

This material is sometimes referred to as diamond grit,
and it consists of dust-like bits and the powder of dia¬
monds. It is used for a variety of purposes. When affixed
to the surface of some tools, it is used for machining,
grinding, drilling, and so on. In the jewelry trade, it is
used in faceting and polishing diamonds and is often
used to fashion other hard gemstones.

Dispersion—The ability of transparent materials, includ¬

ing gems, to break white light into the spectral colors.
The interval between the colors varies with the material,
but dispersion is measured by the refractive indices of
the rays of blue and red. Diamond's dispersion is .044.
This is the highest dispersal reading of any colorless nat¬
ural gem. Dispersion is one of the factors measured in
determining whether a stone is actually a diamond. In
the trade this quality is usually known as fire.

Dodecahedron—A rare but possible form of diamond

crystals in the cubic crystal system. Technically speak¬
ing, stones of this configuration have a dozen rhomb¬
shaped faces. Each face intersects two of the crystal's
axes and is parallel to the third.

Dop—A device used to hold a diamond (or any other

gemstone) while it is being cut or polished. Dops are
essentially handles that are attached to the stone to
 INSIDER SECRETS TO DIAMOND DEALING

make it easier (or possible) to handle during the cutting,

shaping, and polishing process.

Drawing color—The quality of a stone that gives it a visi¬

ble body color due to the mechanics of light and reflec¬
tion. The points on some cuts of stone are said to draw
color, while the remainder of the stone may have no
color visible to the naked eye. When more than one dia¬
mond is placed in a diamond paper and light passes
through one stone into another, there is a tendency for
color to be intensified. The selection of stones, seen
under those light conditions, draws color.

Edge up—The position to hold a stone to best observe

faint color tints. In this position the observer is looking
at the diamond parallel to the plane of the stone's girdle.

Emerald cut—This is a step cut that enhances or

brings out color in diamonds. It is characterized by
rows, or steps, of long facets on the crown and pavil¬
ion, parallel to the girdle. There are usually steps on
four sides of the stones, as well as at the corners
where the sides join together. Usually, cutters place
three steps on the crown and three on the pavilion,
though the number may vary. Most cutters do not use
an emerald or step cut for stones that have mid-range
color since this type of cutting tends to bring out the
traces of color. But the emerald cut is considered an
excellent cutting style for fancy colored stones (which
it will enhance the color of) or those in the colorless
and near-colorless range (where it will have no effect).
This cut dramatically reduces the fire or dispersion of
a diamond. When cut in a square, it is known as a
square emerald eut.
 GLOSSARY

Enhanced diamond—A natural gem which has been

altered in some way to improve its look. Color can be
enhanced through heat, radiation, oils, and chemicals.
This is often called a treated stone.

European cut—An older form of cutting that was never

popularly adopted. It is based on mathematical formulae
of light transmission and represents one of the first and
more successful attempts to bring science into the cutting
picture. But it is based on the light hitting the crown at a
right angle, something that very seldom happens. For the
curious, the table is 56 percent of the girdle diameter, the
crown depth is 19 percent, and the pavilion depth is 40
percent. The pavilion facet angle relative to the girdle is
38° 40'; relative to the bezel angle it is 41° 6'.

Extra facets—Facets that are additional to those needed

for the particular style of cut. These generally make the
faceting asymmetrical, though the average nonprofes¬
sional would seldom notice. Extra facets are often added
as a way of eliminating a minor blemish at or near the
surface of a stone—such things as a nick or a natural.

Eye clean—A phrase that should make any buyer wary.

A term used by many diamond dealers that is supposed
to describe stock which a professional diamond grader,
without using magnification, would find to be free of
internal faults or flaws. Eye perfect is a variation of this
term, meaning that the stone is free of both visible sur¬
face blemishes as well as internal flaws. In the real
world, when someone uses these terms while trying to
sell you a stone, it means that the stones have blemishes
that are visible to a trained diamond grader but can be
seen only with difficulty.
 INSIDER SECRETS TO DIAMOND DEALING

Facet—A polished surface, almost always on one of the

many cleavage planes of a diamond.

Faceting—Placing facets on a diamond or other stone.

Face up—A position of the stone vis-a-vis the viewer in

which the table is facing the viewer. This is the usual
way in which mounted stones are seen. In diamonds the
face-up position usually shows the least amount of color,
and as a result when grading for color most diamond
dealers use an edge-up or pavilion-up position.

Facing up well—A term that should serve as a warning

whenever you're the purchaser. In the mid-range of color
grades, a considerable number of diamonds that show
signs of color in the edge-up position have no noticeable
color when viewed face up. What usually happens is that
the bright internal reflections of the light source mask
the color tints.

False-colored diamond—A trade phrase used to describe

diamonds that are slightly tinted with yellows but which
fluoresce blue when viewed under natural light. A false-
colored diamond looks better in natural light, where dia¬
monds are usually graded, than they will when illumi¬
nated by incandescent light.

Fancy—A diamond with a body color tint that is so

strong that it becomes an advantage rather than a liabili¬
ty. The most common fancy colors are yellow, green-yel¬
low, brown, and black. Other colors are rarer but include
orange, violet, green, blue, pink, and red.

Fancy cut, fancy shaped, moderne cut—Almost any cut-

 GLOSSARY

ting style other than the round brilliant or single cut.

There are many different shapes. Become familiar with
them as you learn: emerald cut, marquise cut, heart,
pear, keystone, epaulet, half moon, triangle, etc.

Feather—A cleavage or fracture on a single plane within

a stone. This type of flaw often has the appearance of a
feather when it is viewed at a 90-degree angle to the
cleavage plane.

File test—An old and discredited method of testing a

stone to tell whether it is a diamond.

Finish—The quality of cutting, in addition to its propor¬

tions and the angles of the facets. Such things as the
stone's polish, symmetry, smoothness of the girdle, size
(or presence) of the culet, facet edge sharpness, and exis¬
tence of extra facets are all items that are scrutinized
when determining finish.

Fire—The word used widely in the diamond trade to

describe the flashes of rainbow color that a diamond's
facets give off, the result from dispersion. It is also
referred to as scintillation. Fire can be seen when either
the light source, the diamond, or the viewer moves.

Fisheye—A stone that is cut with a shallow pavilion.

This alters the path of the light and the angles of reflec¬
tion inside the diamond so significantly that the stone
lacks brilliance and has a glassy look to it. This is the
term given to the most glaring examples of what is also
called a shallow stone.

Fissure—A long cavity in the surface of a diamond. This

 INSIDER SECRETS TO DIAMOND DEALING

cavity is often associated with a cleavage reaching the

surface.

Flaw—An imperfection in a stone that lowers the value.

Sometimes called a fault.

Flawless—A blemish-free diamond. Abbreviated to FL,

the term means that no internal or external flaw can be
seen by a trained and competent grader using a 10X loupe
and correct lighting.

Fluorescence—The effect that physical properties of

some stones have under certain wavelengths of light.
The stone will cause some wavelengths that are visible
and others that are invisible to the eye to change and be
discernable in the visible range. Fluorescence can alter
the color of a stone under certain conditions. For
instance, an overblue exhibits a blue cast in the day¬
light but not under artificial light. A small but signifi¬
cant percentage of diamonds will fluoresce.
Fluorescent diamonds should never be used as master
stones for color grading.

Foil-backing—A method of simulating a diamond with

faceted glass by using a thin sheet of metallic foil or
reflective paint on the Pavilion of the stone. This
increases the brilliancy of the piece to more closely
resemble that of a diamond. Diamonds themselves are
sometimes foil-backed, either to give a relatively clear
stone a color or to improve the depth of color on a lightly
tinted stone.

Four Cs—The diamond essentials: color, cut, clarity, and

carat weight. This shorthand expression summarizes the
 GLOSSARY

major elements that go into valuation of a stone. For that

reason, the Four Cs are critical for every diamond dealer
to know and understand.

Fracture—A chip or break in a diamond in some direc¬

tion other than a cleavage plane.

Girdle—The dividing line between the crown and pavil¬

ion of a diamond brilliant. This is the widest part of a
stone in any direction and is what is grasped by the
mounting or prongs. Well-cut Girdles have a waxy
appearance. A bearded girdle is characteristic of a poorly
cut stone and often consists of many small cracks at the
outer edge of the diamond.

Girdle facets—Another name for break facets.

Girdle reflection—A visible warning of a badly cut dia¬

mond. In diamonds that have an extremely shallow
pavilion, the girdle can be seen reflected in the table.
Most buyers of quality stones see this as if it were a sign
saying, "Don't bother with me."

Girdle thickness—The width of the girdle, measured per¬

pendicular to the girdle's plane.

Goods—A common term among diamond professionals,

with the possible exception of jewelers, for diamonds.
Jewelers try to sell the mystique of diamonds to their
purchasers. The others in the business know they are
buying and selling a commodity, and the term is indica¬
tive of that.

Grain—The planes or directions in which it is easiest to

 INSIDER SECRETS TO DIAMOND DEALING

cleave, saw, or polish a diamond. The most common

usage of the term is for a diamond's cleavage direction.

Growth markings—These are markings characteristic of

the diamond crystal's form. The vestiges of growth
markings can sometimes be seen on a finished diamond's
girdle,- such markings are often used as one indication
that the stone is, in fact, a diamond. Cubic diamonds
show a square or rectangular marking. Triangular depres¬
sions are characteristic of octahedral diamond crystals.
Finished stones made from dodecahedron-shaped crys¬
tals are grooved.

Halves—The usual term for a stone of about a half¬

carat—50 points, more or less.

Ideal cut—A diamond that has been cut in the brilliant

fashion, with the size and shape of the facets designed to
provide for a balance of maximum brilliance and disper¬
sion. Also referred to as a Tolkowsky cut or American
cut. This is the way a diamond is cut for the most beauty.
However, many cutters, in order to increase carat weight
and try to charge more for their finished stones, deviate
from the ideal cut. Relatively few stones are actually cut
to these standards.

Imperfect—Diamonds graded at the lower end of the

gem scale. Imperfect as a rating refers to a diamond with
a serious flaw that affects the durability of the stone or to
a stone with flaws that are visible to the unaided eye
when viewed face up.

Inclusion—Virtually any internal flaw except a frac¬

ture or cleavage, and some experts will include even
 GLOSSARY

these as inclusions. In its narrowest sense, it refers to

any foreign object or visible crystal growth or graining
inside a diamond.

Industrial diamonds—Diamonds that are not gem-quali¬

ty stones, used for industrial purposes (e.g., in saws to
cut stone and concrete) in bits for oil drilling, and in
machine tools. Some better-grade industrials are cut and
polished and sold as gem diamonds. Likewise, on occa¬
sion, a gem-quality stone may be used for specialized
industrial purposes.

Internal strain—The strain and stress inside a diamond.

These strains are often caused by an inclusion but can
result from any number of distortions and irregularities
of the structure. Internal strain can seriously affect the
durability of a stone.

Jager--A top-quality diamond in one color classification

system. The word is also used to describe a colorless
stone that fluoresces blue (i.e., a stone that has a bluish
cast in daylight but appears to be colorless under artifi¬
cial light.)

Kimberlite—A type of peridotite that carries diamonds

to the surface. This is often called blueground.
Yellowground is blueground that has been badly
weathered. In Australia a similar igneous type of rock
is lamproite.

Kimberlite dike—A spike of plastic kimberlite that has

been pushed up through the bedding planes of earlier
rock and solidified. Diamonds are sometimes contained
in such dikes.
 INSIDER SECRETS TO DIAMOND DEALING

Knife-edge girdle—The girdle of a stone that is excessive¬

ly thin. Knife-edged girdles can be chipped easily.

Knot—A term applied to several different crystal condi¬

tions in a diamond. It generally indicates some type of
included crystal in a stone, or a different orientation of
the grain in one part of a diamond, that makes cutting
and polishing difficult.

Limpid—An adjective describing a very transparent dia¬

mond that has no body color.

Loose goods—Diamonds that have been cut and polished

but are not yet mounted in jewelry.

Lot—A term used a lot by diamond dealers. There are

two similar but slightly different meanings. One is a
group of rough stones offered to cutters by DeBeers at its
diamond sights. The second use describes the arrange¬
ment of stones by color, cut, clarity, or some other
attribute after they have been fashioned into gems.

Loupe—A small magnifying glass that will enlarge from

2X to 20X. The standard loupe used for grading diamonds
is a 10X color-corrected loupe. Usually, loupes are
designed to be worn in the eye or attached to glasses (eye
loupe) or to be held in the hand (hand loupe). Both are
used by professional jewelers, but most find that the eye
loupe is preferable since it leaves both hands free to
manipulate the diamond.

Louped—When the noun is turned into a verb it simply

means that a stone has been examined under a loupe.
This generally implies that it has been graded, but there
 GLOSSARY

are people who will suggest that when it is not true. The
key here is to always find out what the speaker means.

Lumpy girdle—When a cutter produces a brilliant-cut

diamond with an extremely thick girdle, the weight in
points of a carat goes up. At the same time the quality
goes down because the size of the girdle affects light
reflections within the stone. This bit of tricksterism—
designed to get someone to pay more because the stone
weighs more—is related to a thick stone.

Luster—The stone's surface as it appears in reflected

light. The quantity and quality of the light reflected from
a well-cut diamond produce a readily identifiable luster.

Made—This is a four-letter word in diamond cutting cir¬

cles. It is a flattish, often triangular piece of diamond
rough that for reasons relating to the way the crystal
grew is difficult to fashion into a cut diamond. Most
often, macles are used for fancy cuts since trying to get
round brilliants out of them results in excessive
wastage—when they can be properly cut at all. If you
avoid doing business in diamond rough, you don't need
to worry about this term, except insofar as someone will
mention it in relationship to some fashioned stone. If
you're buying rough, a made should be purchased for
considerably less than an equivalent-weight diamond
that is not a made.

Main facets—On a brilliant-cut stone these are virtually

all the facets. This is a catch-all term for the crown and
pavilion facets on a brilliant. On step-cut stones this
term has a much narrower meaning; it refers to the cen¬
ter row facets on the pavilion.
 INSIDER SECRETS TO DIAMOND DEALING

Make—The finish and proportions, only, of a diamond.

The positive comment is that the stone is "well made."
Note that a stone of good make (i.e., well finished) could
conceivably be riddled with included crystals and feath¬
ers, have poor color, etc. In other words, a seller can hon¬
estly say that a piece of junk he wants to sell you is well
made just because the finish and proportions are nice.

Marquise—A fancy diamond shape that is close to the

Brilliant in terms of the placement of facets. Often
called boat shaped, it can best be thought of as a bril¬
liant that has been stretched in one direction like a
piece of silly putty.

Melange—One of the more important words in the dia¬

mond dealer's dictionary. Buyers of fashioned diamonds
will generally be offered melange, a word that comes
from the French and can be translated roughly as mix¬
ture. This is usually an assortment of stones, larger than
.25 carat, in which the color, weight, or other factors are
jumbled. Melange lots are not homogeneous, and they
can be difficult to grade with any speed because there are
few or no common characteristics of the stones.

Melee—These are small stones, up to about .25 carat in

size. Single small stones are sometimes (incorrectly)
referred to as melee when mounted as secondary stones
to a main diamond. The diamond buyer will generally be
dealing with melee in multiple-stone quantities.

Moe gauge—A device used to measure the width and

depth of a brilliant-cut diamond, either mounted or
unmounted. When used with a set of mathematical
tables, it produces an approximation of the weight.
 GLOSSARY

Mounted goods—Any diamonds that have been set in

jewelry. This is particularly applied to, but not limited
to, rings.

Mounting—A piece of metal or other material, often an

amalgam of gold, silver, or platinum, designed to hold a
diamond or other type of gem.

Natural—This is often the exception to the rule that an

imperfection in a diamond lowers its value. A natural
is a part of the diamond's original surface (and often tri¬
angular or square depressions within the natural are
indicative that the stone is in fact a diamond). On some
occasions, in order to get the most weight from rough,
a jeweler will not polish the diamond's original surface
off a fashioned stone. When the natural does not flatten
the outline of the girdle, and when its lateral dimen¬
sions do not extend beyond the footprint for a medium-
girdle, a natural is not regarded as a blemish. The exis¬
tence of a natural on a girdle can be an important clue
for the diamond trader in deciding whether a particular
stone is a diamond.

Nick—Another name for a small-sized chip on a cut dia¬

mond. The most obvious place to look for nicks is along
the girdle, although facet junctions and on a facet itself
are other places where they are frequently found. Nicks
can be caused by a slight blow to a diamond, from care¬
less handling, and even from carrying several diamonds
in a single diamond paper.

Off center—Both culets and tables, the smallest and

the largest facets on a diamond, are sometimes off cen¬
ter. This is a sure indication of a badly cut diamond.
 INSIDER SECRETS TO DIAMOND DEALING

Off-center culets usually occur when a cutter attempts

to fashion an odd-shaped piece of diamond rough and is
unwilling to cut it to the right proportions and angles
because of the extra weight he would have to lop off.
When a culet is off center, the angles of opposing pavil¬
ion facets will be different, and incorrect, causing a loss
of brilliance in the stone. Off-center tables are often the
result of problems in cutting odd-shaped rough. To
retain weight, some cutters will incline the table
toward the girdle at some point, when it should be par¬
allel at all points. Inevitably, crown facets on different
sides of the stone will be cut at different angles, and the
stone loses beauty.

Old European cut—A form of diamond cut no longer

used and very seldom seen in most modern diamond
transactions. It is the earliest type of full-cut, circular-
girdled diamond brilliant. It is characterized by a high
crown and small table. Many, many diamond profes¬
sionals refer, mistakenly, to this cut as an old mine cut.
The old mine cut has a squarish outline rather than a
circular girdle.

Open culet—A culet that can be seen with the naked eye
is flawed. If it can be seen without magnification it is too
large for the purposes it is cut for—to protect the stone
from damage at the bottom of the pavilion.

Out of round—A stone that is supposed to be a circular

diamond brilliant but is not. An out-of-round stone is
not a fancy shape,- it is simply a stone that was supposed
to be round but was cut lopsided.

Paperworn—When more than one diamond is carried in

 GLOSSARY

a diamond paper the stones can rub or clink together.

This sometimes causes scratches, or more often abraded
facet edges, on the crown and pavilion.

Parcel—A group of diamonds offered for sale. It is used

to mean any collection of diamonds, but in its most
precise and accurate meaning it refers to diamonds that
have been sorted and graded according to some com¬
mon standard.

Paste—Any type of diamond imitation made out of glass.

Pavilion—That portion of the diamond below the girdle.

Pavilion main facets—The largest facets on the girdle,

they run from the culet to the girdle on brilliant-cut
stones. They are also called bottom main facets by some
diamond dealers.

Pear cut—This is a 58-facet variation of the round bril¬

liant. It qualifies as a fancy cut and is not an out-of-round
diamond.

Perfect—A word usually overused in diamond dealings.

Perfect stones are defined as having no imperfections or
blemishes and no inferior cut or color that can be seen by
a trained grader under a 10X loupe.

Pinks—One of the fancy-colored diamonds. In the trade,

pink seems to refer to any stone with a hue that is red,
purple, or violet.

Pique—A catch-all term that was supposed to mean dia¬

monds with hard-to-see inclusions. It has been so mis-
 INSIDER SECRETS TO DIAMOND DEALING

used over the years that many of the "grades" of pique

actually are synonyms for poorer quality diamonds,
those in the SI and I range. The term is often abbreviated
in written documents to PK.

Point—One 100th of a carat.

Polish—The level to which the surface of the diamond is

smoothed out in an effort to produce optical perfection.
Under 10X magnification a quality polish should show no
burn or wheel marks from the fashioning process. Any pol¬
ish marks are usually grooves or scratches left on a facet.

Polished girdle—A diamond's girdle that has been

faceted rather than smoothed. Sometimes called a
faceted girdle.

Polishing—The process of turning diamond rough into a

gem. Stages that are important for technical experts to
know about include blocking and brillianteering.

Quarters—The usual term used by diamond dealers

when referring to stones of about a quarter-carat, 25
points, more or less.

Red diamond—Diamonds with a color even approaching

a ruby are virtually unheard of. When used by diamond
merchants regarding a fancy-colored stone, red diamond
generally refers to one that is rose colored or red-brown.

RI—The abbreviation of refractive index, the measure of

how much light is bent when it enters or leaves a stone
at an oblique angle. Generally, stones with high RIs are
more brilliant.
 GLOSSARY

Rough—Diamond crystals before they are cut, polished,

and made into gemstones.

Rounding up—Part of the process of fashioning a rough

stone into a gem; usually considered the part of the pro¬
cess by which the girdle outline is formed.

Rose cut—One of the oldest cuts of a diamond, it is

still sometimes used on small diamonds. Beginning
dealers always avoid this cut until they establish some
definite need for it in their stocks. Probably first used
by Indian cutters, the base is flat and unfaceted while
the top is dome shaped and covered with a number of
triangle-type facets.

Rough girdle—Much the same as a bearded girdle,

although some diamond dealers use the term to describe
a stone that does not have the hairline fractures at the
girdle plane.

Scratches—One of the types of surface imperfections in a

diamond. They are long, thin, and shallow (and usually
rough edged).

Shallow stone—A diamond that has been cut in such a

fashion that the pavilion-main facets are at an angle of
less than 40 degrees to the plane of the girdle. A fisheye
is the more extreme example of a shallow stone. Shallow
stones generally have a glassy appearance.

Simulated diamonds—a type of manmade stone that is

not a diamond or other gemstone at all. Although its
color may be similar to that of a natural gem, it's very
different physically and chemically.
 INSIDER SECRETS TO DIAMOND DEALING

Glass has been used in the past for diamonds,

although today cubic zirconia is a well-known dia¬
mond simulation. These types of stones are often
referred to as simulants.

Single cut—This form of cutting is often used with

melee, or extremely small diamonds, where it would be
difficult to cut and polish 52 facets. Sometimes erro¬
neously referred to as a chip, the single cut is a circular-
girdled stone that has a table, eight faces on the bezel,
eight on the pavilion, and sometimes a culet.

Skin—The natural surface of an uncut diamond.

When it is left unpolished on a stone's girdle, it is
known as a natural.

Smalls—A term used by some diamond dealers to refer

to stones of less than one carat but larger than melee.

Specific gravity—A figure that relates the weight and

density of the diamond to that of water. It is usually
abbreviated as SG. The SG of a diamond is 3.52.

Swindled stone—Cutting a wider than necessary table

saves weight for the diamond cutter. Since it alters the
angles of the stone's internal reflections, it cheats the
customer of beauty. Actually, any deviation from the
ideal of a 53-percent table will alter the reflection pat¬
terns, but diamond dealers seem unwilling to accept
the ideal as a standard. They will maintain that a round
brilliant diamond has not been swindled or spread until
the table is equal to 60 to 65 percent (or sometimes
more) of the girdle diameter. The felicitous-sounding
phrase for an overly large table used among diamond
 GLOSSARY

professionals is open table. Some can even say "open

table" in a way that makes a buyer think that is a posi¬
tive attribute,- it is not.

Star facets—On a brilliant-cut gem these are eight trian¬

gle-shaped facets along the edge of the table. They adjoin
the main bezel facets.

Step cut—The other type of cutting besides the brilliant

cut. In a step cut, all facets are in parallel rows above and
below the girdle. All facets are quadrilaterals, and all
except those that may be at corners are long. There are
usually three rows of facets above the girdle and a similar
number below the girdle on a step cut, although that is
not a hard and fast rule.

Stone—A diamond or other gem. Diamond dealers usual¬

ly refer to their goods as stones.

Symmetry—The care with which facets are placed oppo¬

site one another on a stone. In a symmetrical diamond,
opposing facets are mirror images of one another.

Synthetic stones—Laboratory-grown stones that

closely duplicate a natural gem's physical and chemi¬
cal properties. These are the genuine item, though
some diamond dealers don't like to admit that these
are really diamonds. Synthetic industrial-grade dia¬
monds were first synthesized in 1955; it wasn't until
the 1980s that jewelry-grade diamonds were synthe¬
sized. These are not simulated diamonds or simulants.
Synthetic diamonds are prized for their hardness, mak¬
ing them valuable for a variety of industrial uses, such
as oil drilling.
 INSIDER SECRETS TO DIAMOND DEALING

Table—The large facet atop a faceted stone. On a bril¬

liant-cut diamond, it has eight sides and is edged by the
eight star facets.

Table down—The diamond as it appears when the

Table is placed on a surface so that it can be viewed per¬
pendicular to the pavilion facets. This is the most com¬
mon position to use when grading for color. However,
the edge-up position makes it easier to detect faint
traces of color.

Table reflection—The size and shape of the table's reflec¬

tion, when viewed on the pavilion facets through the top
of the table, is a rough guide to whether the pavilion
facets are cut at the proper angles.

Table size—Perhaps no single measurement can tell

more about a stone than this one. The size is measured
from one corner of the table to the opposing corner, not
from edge to edge. It is expressed as a percentage in
relationship to the girdle diameter. The best-propor¬
tioned stones have a table size of about 53 percent, but
percentages much larger, sometimes 65 percent and
more, are common. Although it is not always true, the
fact that a stone has a table size near the ideal propor¬
tion often means that it has been cut with care by a
professional who understands diamond proportions
and respects them.

Thick crown—A characteristic that is seldom seen in

modern cut stones is a stone with a thick crown—one
that is deeper than 16.2 percent of the girdle diameter.

Thick stone—When a fashioned stone is cut deep, rather

 GLOSSARY

than to correct proportions, the angles of the various

facets are changed, the path of the reflections within the
gem are changed, and the stone loses brilliance. Some
unscrupulous diamond cutters will intentionally pro¬
duce this type of stone. These people effectively are try¬
ing to get more from the rough than is legitimately there.
Also sometimes called a lumpy stone.

Thirds—Stones of approximately one-third carat. For

some reason, diamond dealers will use the term most
often when they are on the lower side of .33 carats.

Tolkowsky cut—The scientifically based cut of a round

brilliant-cut diamond using the laws of physics that pro¬
duce maximum brilliancy of a stone consistent with
high degrees of fire. Using the average size of the girdle as
1, a stone cut to Tolkowsky specifications has.

• total depth 59.3 percent,

• crown depth 16.2 percent,
• pavilion depth 43.1 percent,
• girdle depth 1 (larger stones) to 3 percent,
• table size 53 percent,
• bezel angle 34° 30', and
• pavilion angle 40° 45'.

Treated diamond—A stone that has been treated,

often with heat or a coating, to improve the appear¬
ance or color.
 APPENDIX

MEASURING FOR
WEIGHT

Weight is one of the most important factors affect¬

ing a diamond's value. Measurements of a diamond's
size, taken with a screw micrometer, can be converted
into fairly accurate estimations of its weight.
Estimating weights is a dangerous thing to do—but
sometimes you may have no other alternative. For that
reason I'll include a couple of formulae that may be use¬
ful. But keep in mind that these figures are approxima¬
tions and will not yield the exact weight.
Some of the more widely accepted formulae for esti¬
mating weight from physical measures are listed below.
The key measurements when measuring a diamond are
the depth and the diameter. When you're dealing with
unmounted stones, it's fairly easy to get those figures
and plug them into a formula. When dealers are handling
mounted stones, there's a lot of guesstimating that goes
on in the diamond trade, but in the smuggling business,
no one ever deals with mounted goods. They know that's
among the fastest ways to get ripped off.
 INSIDER SECRETS TO DIAMOND DEALING

Despite the fact that relying on the estimated

weight of stones is not a good idea, particularly if you
have a scale available, it is worthwhile to make esti¬
mates in all cases. The estimates may be usable later.
And estimating the weight of the stone from the mea¬
surements is sometimes useful. A correctly estimated
weight that appears to be out of line with the actual
weight, as determined from a diamond balance, is a pret¬
ty good indicator that the whole transaction should be
reviewed carefully to see if some sort of diamond substi¬
tute is being palmed off as the genuine article.
When measuring the diameter of brilliants (round
stones), keep in mind that few diamonds are perfectly
circular. For that reason, look carefully at the stone to
see where the maximum and minimum girdle diameters
are, measure each, and average the two.
In fancy cuts the term diameter is a little trickier.
The general rule here is that diameter means length—
the stone's longest dimension—and width—generally
the longest dimension at right angles to the length.
There are some exceptions to these rules, however,
and they're worth knowing about, though you'll seldom
need them. The length of heart-shaped diamonds is the
distance between an imaginary line drawn across the tops
of the lobes to the tip of the point. Call the width the
widest part of the lobes. When measuring a triangle cut
(another one that's wise to stay away from when purchas¬
ing), measure the width first. If all sides of the triangle are
equal, any side can be measured at the width. If the sides
are not equal, call the width the distance along either the
shortest or longest side, from corner to corner. The length
of the triangle cut is then measured along a line that is per¬
pendicular to the side you chose as the width, from that
side to the point opposite it.
 MEASURING FOR WEIGHT

When using a screw micrometer, use one that mea¬

sures in millimeters,- if you use one that measures in the
English system, the following formulae are wrong,
wrong, WRONG.
Most important, remember that any time you are
using a micrometer to determine dimensions, avoid
tightening the screw once the stone is resting between
the jaws. Diamonds can be damaged easily, and clamping
down hard is an excellent way to hurt a stone.

WEIGHT ESTIMATION FORMULAE

Round brilliant:
Estimated weight = Average diameter squared x depth x
.0061

Oval brilliant:
Estimated weight = Average diameter squared x depth x
.0062

Heart-shaped brilliant:
Estimated weight = Length x width x depth x .0059

Triangular brilliant:
Estimated weight = Length x width x depth x .0057
 -

*• it | Ilk S | >■ s® ■ '¥ *3 -• r tdmm i

■
 APPENDIX

CONCEALMENT

There are innumerable places to conceal dia¬

monds, GEMS, AND OTHER CONTRABAND IN BUILDINGS, VEHI¬
CLES, or on yourself. The possible places are limited
only by imagination. However, government agents are
taught a list of the "most likely" locations where contra¬
band will be concealed, and that list serves as a floor for
searches of homes, cars, and people. More inventive
agents consider the list a floor and try to imagine other
locations where items can be stashed. Some agents con¬
sider the list a ceiling and don't search beyond it—if they
even search all these places.

Take this list—distributed by a U.S. government

agency to its operatives—for what it is. Be aware that
customs and other agents the world over probably have
similar lists, ones that may be either a "floor" or a "ceil¬
ing" during searches. The listing is as distributed by fed¬
eral agents.
 INSIDER SECRETS TO DIAMOND DEALING

HOMES, BUILDINGS, AND LUGGAGE ITEMS

Telephone base and handle

Sealed cigarette package
Inside and under wigs
Under washbowl, sink, or tub
Base of lamp
Closet clothing—waistbands, pens in pockets, sleeves,
hatbands, shoes, gloves
Flower pots and window boxes
Wall and ceiling light fixtures
Prescription bottles
Mattresses
Behind picture frames, posters, or mirrors
Flashlights
Removable air conditioning registers
Pet box
Light switches
Behind baseboards
Inside hollow doors (removable top)
Under carpets
Inside hollow curtain rods and closet rods, shower cur¬
tain rods
Inside stairway posts
Inside door chimes and doorbell
Inside deep-well fryers
Range hoods and filters
Rolled-up window shades
Mailbox
Inside knife handles
Behind wall phones
Inside transistor radio
Hanging out window
Sink traps
 CONCEALMENT

Dog collars
Refrigerator: underneath fruits, vegetables, meat; taped
under door, motor compartment.
Furniture upholstery
Inside toilet tanks
Magazines and books
Bedposts
Musical instruments and cases
False bottom on radiator covers
All kitchen canisters and containers
Doorknobs
Behind walls
Hung behind curtains
Inside TV and radio sets
Inside false ceilings and chimneys
Plumbing inspection doors
Inside crucifix
Golf bags
Test tubes
Inside cameras
Taped to top of toilet bowl
Window ledge next door
In floor drain
False aerosol cans
Fluorescent light tubes
Toys and stuffed animals and games
In Band-aids and Band-aid boxes
Top of window, door sills, moldings
Fire and water hoses
Cellar beams
Venetian blinds—top and bottom
Inside clocks
Child's bank
Agitator of washer
 INSIDER SECRETS TO DIAMOND DEALING

Chandelier
Inside trophies
Inside rolled-up newspaper
Electrical socket
Stick deodorant containers
Cold cream and petroleum jelly jars
Taped in dressers and behind drawers
Inside ceramic and clay figurines
Inside candlestick holders
Inside handle of carpenter's toolbox
Taped to movable clotheslines
Inside pipe rack stand
Behind exterior brick near window
Rifle barrel buttplate
Inside rifle cartridge and shotgun shell
Inside tinfoil tubing roll
Zippered cushions and pillows
Under panel of parquet floor
Inside toilet bowl float
Fuse box
Fish tanks and bowls
Hollow soap cakes
Top edge of doors
Hollowed-out furniture legs
Salt and pepper shakers
Hollowed fruits and vegetables
Record albums
Spice jars
Wax paper dispensers
Magnet boxes
Fire alarm bell
False-bottom baby carriage and cribs
Douche bags
Doghouses
 CONCEALMENT

Footlockers
35mm film cans
Within sanitary napkins and in box
Rain gutters and drain spouts
Hot-air ducts
Hem of drapes and curtains
Hidden in box of mattress frame
Hollowed-out tree
Shoe polish container and equipment
Razor blade dispenser
Stovepipes
Garbage bags
Pillowcases
Furnace
Seams of field cots and hollow cap of cot legs
Attic insulation
Inside hassock
Hidden drawers in tables
Inside TV tube
Inside color TV antenna
Inside abandoned plumbing
In tool box
Inside letters
Inside and behind vacuum cleaner bags
Inside handle of vacuum cleaners
Inside room dividers
Inside patch-trap of antique rifle
Inside Christmas tree decorations
Behind kick plates of sink cabinets
Conduit from fuse box
Jewelry box
Clothes hamper
In stove insulations and stove exhausts and drip pans
Under lip ring of plastic trash cans
 INSIDER SECRETS TO DIAMOND DEALING

In toothpaste tubes
In surfboards
In electric toothbrush holders
Talcum and cold cream containers
Tea bags
Acoustical tile ceiling
Holy Bible (hollow cover)
Baked bread, cookies, and brownies
Cookies and candy bars
Art kits
Dolls
Fuel-oil heaters
Psychedelic light housing
Hollowed-out flashlight batteries
Hollowed-out pad of paper
Seltzer antacid
Base of rabbit ears antenna
In eggs
Mixed with tobacco
Taped to hatboxes
Leg of bathtub
Toaster tray
Plastic rolling pin
Razor blade disposal slot
Shower head nozzle
Chimney clean out
Hair dryer
Clock
Hollow cane
Pay telephone coin return
Under corner of mailbox
Shaving brush handle
Miniature chessboards
Behind and inside medicine cabinets
 CONCEALMENT

In clothesline pipe
Ironing board legs
Bottom half of double boiler
Typewriters, computers, and covers

AUTOMOBILE

Dome, headlights, and taillights

Hubcaps
Inside horn
Air filter
Oil filter
Spare tire—treads and well
Windshield washer fluid container
Shift knobs
Instrument panel and ornamental objects on dashboard
Cars with double sunroofs
Ashtrays, in and under
Picnic jug in trunk
False battery
Under brake and gas pedals
Frame
License plate
False heater hoses; heater
Sun visors
Under rugs
Upholstery
Behind bumpers
False dual muffler
Hollow voltage regulator
Heater
Vents (air and heater)
Radio speaker grill
On top of gas tank (suspended or concealed in compartment)
 INSIDER SECRETS TO DIAMOND DEALING

Glove compartments—top of compartment or trap

Convertible tops
False bottom of trunk beds
Fuse box
Backseat
Floorboard
Trunk
Inside oil cap
Ffide-a-Key
Under seats
Cigarette lighter
Carburetor
Pill vials
Under tire air-valve caps
Inside motorcycle handlebar tubing
Compartment under floor of older Volkswagen cars
Inside tubing on roof rack
Inside auto surfboard racks
Motorcycle taillights
Rocker panels
Tailpipe
Insulation under hood
Taxicab roof light
Under chrome
Key case
Taped to window
Service station travel kits
False radios, stereos, CD players
Under side of fender
Armrest
Inside flashlight
Tied to axle
 CONCEALMENT

ON PERSON

Lipstick tube
Cigarette lighter and packs
Taped under breast or brassieres
Processed hair, hair buns, and wigs
Rectum
Vagina
Nose
Ears
Mouth
Cheeks of buttocks
Lapel of jackets and coats
Inside and back of watch and other jewelry
Taped behind ears
Cuffs and waistbands
Pockets
Shoes and socks
Pill vials
Inside sanitary napkins or tampons
Hat band
35 mm film cans
Baby's diapers
Corsets
Under false teeth
Slit belts or zippered belts
Belt buckles
Behind collars and collar stays
Foreskin of penis
Under bandages
False limbs
Glass eyes
Hearing aid Glasses
Jock straps
 INSIDER SECRETS TO DIAMOND DEALING

Swallowed, with string to teeth

Between toes and taped to feet
Tie knot of necktie,- handkerchiefs
Wallet
Eyeglass case
Contact lens case
Inside pens and pencils
Tobacco tins or pouches
Money belts
Lining of clothing
Hollow end of cane or umbrella handle
In gum sticks
Cigarette filters
Compact
Casts
In addressed envelopes
False buttons
In male girdle
In swim trunks
In stem of pipe
In gum stuck behind ear
Pinned to shorts
Inside identification bracelets
Inside feces bag
Inside hollowed-out crutches
Inside neck and wrist lockets, bracelets, and charms
Rings
Earrings
Tie pins, clasps, and cuff links
Fountain pens
Inside fly flap of trousers
Battery box of hearing aid
Thermos jug
Liners of luggage
 CONCEALMENT

Canteens
Inhalers
Lining of change purse
Under insulation in motorcycle helmet
Military cap insignia, lapel, and shoulder patches
'
 APPENDIX

DEALING WITH
DIAMOND PAPERS

There is little that will give you away as a neo¬

phyte FASTER THAN MISHANDLING PACKETS OF DIAMONDS.
Folding a diamond packet is an art akin to closing up a
road map. And opening one is an art form in its own way.
It's such a small thing, but the way that you handle
a diamond packet—the way you open it and close it—
will tell the person you're with that you're a pro or will
warn him that you don't have a clue.
You'll want to buy diamond papers and inner liners
from a jewelry supply store, but for a first effort you can
use a piece of typing paper. The procedure is as follows:

1. Cut it into a piece about 7.25 inches long by 5.5

inches wide. This approximates one of the common
sizes of paper.

2. Lay it on the table, with the longer dimension parallel

to you. The first time you do this, mark an X on the
paper, about .25 inch from the top of the paper and
 INSIDER SECRETS TO DIAMOND DEALING

halfway across the width. That will help orient you in

the rest of the folding process, but it is not normally part
of folding a diamond paper.

3. Measuring from the top of the paper, crease the paper

4.50 inches down the "page." Fold the bottom flap up so
that what was previously the bottom edge is parallel to
the top edge. The X should still be visible above the fold¬
ed-up edge.

4. Fold the right side of the paper toward the left, creas¬
ing it when it extends about 1.25 inches over central por¬
tion. The X should still be visible.

5. Fold the left side of the paper toward the right, creas¬
ing it when it extends about 1.25 inches over the central
portion. You have formed a pocket with the paper. The X
should still be visible.

6. Fold the top of the pocket downward. Crease the paper

about 1.50 inches from the bottom. The X will no longer
be visible. You will now see a square of paper, but the
flaps and the pocket you formed previously will not be
visible.

7. Turn the piece of paper over so that the side flaps and
pocket are visible. The X will be visible again.

8. Fold the top edge down so that it overlaps the bottom.

This will be the top flap. The X will no longer be visible.
You now have a properly-folded diamond packet that is
approximately 3 by 1.5 inches.
 DEALING WITH DIAMOND PAPERS

To open up the folded packet, do the following:

1. Hold the paper with both hands. The front, or top, of the
folded diamond paper should be facing you, with the only
uncreased or open edge of the packet closest to your body.

2. Lift the top flap up with a thumb.

3. Fold the bottom flap downward.

4. Determine where the stone is located in the packet by

feeling the paper and finding the lump.

5. Open one of the side flaps.

*

6. Tilt the paper in such a way as to get the diamond

inside to move toward a bottom corner or crease. You
may want to tap the edge of the paper lightly to help
move the stone.

7. Carefully open the other side flap.

8. Put your finger inside one of the open flap side and
carefully fold down the bottom flap. Carefully. At this
point there is nothing to hold the stone inside the paper
and it could easily pop out onto the floor or table or into
a fold in your clothes.

9. When you are finished examining the stone, but it

back in the middle section of the paper and fold as before,
bringing up the bottom edge so that it is parallel to the
top edge, etc.
• : i■ ! ‘ i •• ;
ABOUT THE AUTHOR

Maximillian S. Callahan is a pro¬

fessional who declines to state
his business or background or
have a picture of himself pub¬
lished. You will understand why
once you read this book.
 1
BOSTON PUBL BRARY !

NC'. ■V’ *
3 9999 03033 049 0
w
-

Ga!c of th
 t's been said that diamonds are "the most valu-
able, not only of precious stones, but of all
things in this world." It's also been said
that "diamonds are forever."
The ageless, timeless allure and value of
diamonds cannot be denied. Something so
small it can be mailed using a single postage stamp
and yet so valuable it could buy and furnish a fine
home in the United States is hound to inspire those
adventurous souls willing to resort to more "uncon¬
ventional" methods in seeking that ever-elusive pot
of gold at the end of the rainbow. It takes a certain
type of person to survive, and even thrive, in a cut¬
throat world where the businessmen in silk suits are
arguably even tougher than the ruffian smugglers who
move the contraband.
Author Maximillian Callahan has seen it all, and
in this book he shares the wisdom of his experience
with you, from the basics of the business, including
equipment requirements, essential industry jargon,
and the factors that determine a diamond's value, to a
careful, straightforward, and revealing look at the
cold, hard world of diamond smuggling.

A PALADIN PRESS BOOK

ISBN (h87364-876'5

ISBN 0-A73b4-A7b-5
90000

9 780873 648769