In May, the International Gemological Institute (IGI) received hundreds of synthetic diamonds. That these stones were sold and submitted to laboratories is nothing newsworthy, as there is a legitimate trade in synthetic diamonds. What prompted IGI to issue an alert was that this unusually large volume of man-made diamonds was submitted with the clear aim of having them certified as natural diamonds.
Synthetic diamonds are created with equipment that simulates the conditions in which natural diamonds are formed. It is a complex and expensive process, Marc Brauner, CEO of IGI Hong Kong and co-CEO of IGI Worldwide, explained. But when successful, a diamond can be “grown” in a day or two.
One of the processes used to create synthetic diamonds is chemical vapor deposition (CVD). Though it was not always the case, CVD diamonds can now be created and polished to jewelry quality.
Brauner says that is impossible to determine that these CVD diamonds are not natural diamonds unless they are analyzed in a laboratory.
From the beginning, synthetic producers have been subject to strict rules designed to protect consumers. These requirements included disclosure at any point of sale, using terms such as “man-made,” “synthetic,” “laboratory grown” or “brand name created.”
Every synthetic diamond should bear a laser inscription.
Brauner says synthetic producers have worked openly with the diamond industry and have honored their commitments.
Or so it seemed, until one of IGI’s clients submitted a parcel of about 700 diamonds for certification to the laboratory in Antwerp only for it be discovered that about 600 were CVD diamonds.
Brauner says their client was unaware that any of the parcel consisted of synthetic diamonds. He submitted them for certification because they had been selected and were destined for one of his clients, a retailer.
“What isn’t known is if the seller [to the IGI client] knew about the synthetic diamonds,” Brauner said. “It is not impossible that the person who sold to our client also didn’t know.”
Since diamonds can often be sold numerous times before certification is done, these CVD diamonds could have been involved in many transactions before reaching the IGI client.
“What we know is that at some point, these diamonds must have come from a dealer who is connected to a synthetic producer,” Brauner said.
This naturally raises questions as to how many undisclosed CVD diamonds are floating around being mistaken as natural diamonds.
Circulating synthetic diamonds
A week before the Antwerp incident, another IGI client submitted diamonds to the laboratory in Mumbai. Some of his stones — less than 10 says Brauner — were also discovered to be CVD diamonds.
This individual was also apparently unaware that his parcel contained synthetic diamonds.
After liaising and consulting with the Belgian Federation of Diamond Bourses (BFDB), the Diamond Trading Company (DTC) the AWDC and sharing information with gemological laboratories around the world, the IGI alert says, “…we now suspect that the volume of colorless synthetic diamonds being released on the global markets have increased noticeably and may perhaps already be prevalent throughout the diamond centers.”
DTC contributed to assumptions that there must be more undisclosed CVD diamonds in circulation when it too issued an alert. In addition to the incidents reported by IGI, DTC reported synthetic diamonds were also submitted to an NGTC laboratory in China.
Brauner said the incidents in Mumbai and China are not really abnormal because they involve small quantities, which occasionally happens.
Still, all three incidents occurred within a two to three week span. All of the laboratory clients were supposedly unaware that they were in possession of synthetic diamonds. In the IGI incidents, the individuals paid natural diamond prices. And, the CVD diamonds that they submitted were lacking inscriptions which could mean that the laser inscriptions were never done or that they had been removed. In either case, that is not the normal course of action.
“In each case the synthetics had very similar characteristics and may therefore have had a common source,” the DTC alert said.
Underground players in synthetic diamond market
It continued on saying “… we note that the combination of characteristics listed above is strikingly similar to that reported by the GIA [Wang & Moses 2011] for 16 CVD synthetics received from Gemesis Corporation.”
Brauner confirms that there is only one company known to be producing jewelry-quality CVD diamonds and that is Gemesis.
In a letter to Chaim Evan-Zohar, principal shareholder of Tacy Ltd, a diamond consulting firm, reportedly from Stephen Lux CEO of Gemesis, Lux states with 100 % certainty that the undisclosed CVD diamonds did not come from his company.
Lux refers to underground players and writes “we both know that there are several other companies that are practicing the CVD technology, with some scale as to capability for the few hundred diamonds that most unfortunately have been sold inappropriately.”
He also says, “you as well as DTC and IGI know that CVD diamonds whether made by Gemesis or others, will be indistinguishable from each other.”
The sale of undisclosed CVD diamonds as natural diamonds can have serious implications for the diamond industry damaging trade and, even worse, consumer confidence.
Unlike other luxury items, consumers have no easy ways to determine the value of diamonds, Brauner explains, so mistrust is a natural consequence. People in the industry realize this and know that diamonds are not a real commodity. Industry players have a deep understanding of the importance of consumer trust and confidence. Add to this the transparency, control and standards in the supply chain and Brauner says getting ripped off is as good as absent these days.
He also says that a story like this one can only happen within the industry. It is highly unlikely that consumers have purchased undisclosed synthetic diamonds because retailers certify 9 out of 10 diamonds.
“The good news is that if there are people out there with bad intentions looking to do more of this, they won’t be able to. People will be extremely vigilant now and will not take any chances,” Brauner says.
He also warns that it is too soon to jump to conclusions as the full details have yet to come out.
DTC says parcels with stones containing unusually high portions of type IIs should be treated with particular caution.