Jewelry Fraud Prosecutions In Usa
1. United States vs. Steve Markowitz (2011)
Case Summary:
Steve Markowitz operated a jewelry business in New York, claiming to sell high-quality diamonds and gold items to investors and collectors.
Fraud Mechanism:
Sold synthetic diamonds and gold-plated jewelry as genuine high-carat stones.
Provided fake certification documents from non-existent gemological laboratories.
Used online and mail-based advertisements to solicit investors.
Prosecution & Outcome:
Charged with mail fraud, wire fraud, and securities fraud.
Convicted and sentenced to 6 years in federal prison.
Ordered to reimburse victims over $3 million.
2. United States vs. Tiffany & Co. Counterfeit Sellers (2013)
Case Summary:
A network of sellers distributed counterfeit Tiffany & Co. jewelry in multiple states, including New York and California.
Fraud Mechanism:
Fake Tiffany rings, necklaces, and watches were sold as genuine.
Sellers created fraudulent invoices and certificates of authenticity.
Prosecution & Outcome:
Federal authorities charged them with trademark infringement, mail fraud, and wire fraud.
Defendants were sentenced to 3–5 years in prison, and counterfeit inventory was seized.
The case emphasized strict enforcement of trademark and consumer protection laws in jewelry markets.
3. United States vs. Daniel L. Green (2015)
Case Summary:
Daniel Green ran an online jewelry store claiming to sell certified diamonds and rare gemstones.
Fraud Mechanism:
Stones were either synthetic or misrepresented in carat, clarity, and cut.
Provided fraudulent certificates from fake gemological labs.
Solicited customers nationwide through email and online ads.
Prosecution & Outcome:
Charged with mail and wire fraud.
Convicted and sentenced to 5 years in federal prison.
Restitution of $1.8 million was ordered to compensate victims.
4. United States vs. H. Stern Diamond Fraud Case (2012)
Case Summary:
An individual associated with H. Stern stores in Miami sold diamonds with inflated appraisals to investors and collectors.
Fraud Mechanism:
Misrepresented value and provenance of diamonds.
Used falsified gemological certificates.
Victims were encouraged to buy diamonds as high-return investments.
Prosecution & Outcome:
Prosecuted for wire fraud, mail fraud, and conspiracy.
Sentenced to 4 years in federal prison, and victims were awarded restitution.
Highlighted that even established brands can be targeted by fraudulent intermediaries.
5. United States vs. GemStone Enterprises (2016)
Case Summary:
GemStone Enterprises sold “rare collectible jewelry” to customers across the U.S., claiming high-value stones and metals.
Fraud Mechanism:
Sold low-quality stones as rare gemstones.
Provided fake certification documents and appraisals.
Operated online stores and mail campaigns to reach victims.
Prosecution & Outcome:
Charged with mail fraud, wire fraud, and interstate commerce violations.
Key executives sentenced to 5–7 years in prison.
Over $2 million in restitution was ordered.
6. United States vs. Leviev Diamond Syndicate (2018)
Case Summary:
A diamond syndicate, led by Leviev, was accused of selling diamonds with falsified grading reports and inflated valuations to investors and jewelry retailers.
Fraud Mechanism:
Used counterfeit certificates from non-accredited gemological labs.
Overstated diamond size, clarity, and origin.
Sold diamonds for millions of dollars under false pretenses.
Prosecution & Outcome:
Charged with securities fraud, wire fraud, and mail fraud.
Leaders were sentenced to 6–10 years in prison, and assets were seized.
This case highlighted how large-scale diamond trading can intersect with securities laws.
7. United States vs. Online Jewelry Scam Operators (2020)
Case Summary:
A group running an online jewelry business scammed customers nationwide by selling fake gemstones and gold-plated items as premium jewelry.
Fraud Mechanism:
Misrepresented jewelry as certified diamonds and gold.
Used fake invoices, certificates, and return policies to create legitimacy.
Victims lost payments made via wire transfers and credit cards.
Prosecution & Outcome:
Charged with mail fraud, wire fraud, and identity theft.
Sentenced to 4–6 years in federal prison.
Restitution payments totaled over $1.5 million to victims.
Key Takeaways
Common Fraud Techniques:
Selling synthetic or low-quality stones as genuine diamonds.
Providing forged certificates of authenticity or appraisal.
Misrepresenting origin, carat, clarity, or rarity.
Using online and mail campaigns to reach victims across state lines.
Legal Consequences:
Criminal charges: mail fraud, wire fraud, conspiracy, trademark infringement.
Prison sentences: 3–10 years depending on scale and sophistication.
Restitution and asset seizure to compensate victims.
Industry Lessons:
Buyers should verify certificates from accredited gemological labs.
Online jewelry purchases require due diligence, especially for high-value items.
Federal authorities actively pursue fraud in both physical and online jewelry markets.
RELATED Blog
0 comments