The Conversation (0)
The Golden Eye is yellow, flawless and 43 carats. It’s also about to be sold through an online auction.
By Michelle Smith–Exclusive to Diamond Investing News
In 2006, Paul Monea arranged to sell an estate formerly owned by Mike Tyson and the Golden Eye for $19 million and a boat. This deal was actually an undercover FBI operation that earned Monea a 12 ½ year sentence for money laundering. The diamond, which at the time was owned by the Monea Family Trust, became of the property of the federal government and the USMS has been ordered to sell it.
The Golden Eye is actually 43.51 carats and has a cushion modified brilliant cut that is considered fair. It is internally flawless and has been deemed to be fancy intense yellow. The stone does not have any green or orange modifying color, according to a report from the Geological Institute of America.
This latter point is a significant one because even subtle overtones can make a big difference in the value of a yellow diamond, according to Nina Woolford, Master Gemologist Appraiser and Principle of C.M Woolford and Associates.
The minimum bid for the Golden Eye is $900,000 and placing that bid requires a refundable deposit of $180,000. Interested parties can view the stone but doing so requires paying the deposit. Bid 4 Assets would not disclose the number of appointments already scheduled, but at the time that this article is being published, slots are still available.
Due to federal rules, certain individuals are considered unqualified to bid, such as government employees, government contractors and sub-contractors or family members of these individuals. The USMS, therefore reserves the right to refuse transferring the diamond to a winner.
Lisa Black, USMS District Asset Forfeiture Coordinator, explains that the agency is mainly looking to prevent anyone related to the case from obtaining the diamond, whether that be family of the criminal or officers who worked on the case. The agency is adamant about avoiding conflict of interest or even the appearance of it.
To ensure that the best efforts are made in this regard, Black says before the winning bidder can claim the diamond, his name will be given to the US Attorney’s Office, which will then determine whether or not the transaction can be completed.
Investors should also be aware that there may be another reason for a rejected bid. The USMS is allowed to deny any bid for any reason, including money.
The agency, which expects national and international interest, has taken the position that it is the bidders’ responsibility to do their own research and then to decide how much they are willing to pay for the Golden Eye. Bid 4 Assets supports this idea, though they have made the grading report publicly available. What is not and will not be disclosed is the value of the stone.
However, Diamond Investing News has been informed that the USMS will reject the winning bid if the figure is too far below their determined value.
Diamond professionals strongly advise potential investors to bid with more than cash. Having the stone appraised and researching the market is imperative, they say.
There are no known stones like the Golden Eye. It is not even clear exactly where this diamond came from, but there are currently no indications that the stone is missing, stolen, subject to UN sanctions or Kimberley Process claims.
Unique and problem-free can be a very positive characteristics when considering diamond investments, but those factors alone should not be the basis for decisions.
An appraiser who stresses that she does not offer investment advice also stressed that if she were considering this stone for resale, she wouldn’t put any money into it until she knew who her potential buyers are and how much they are willing to pay.
Another thing…the bids in the auction will increase in $110,000 increments.
Diane Flora of the American Gem Society warns against relying on escalating bids to determine the stone’s value or resale potential. Since it is unknown who the bidders are or why they are trying to get the diamond, for all anyone knows a person with deep pockets who isn’t even interested in value or selling the diamond could drive its price way up, she says.