On March 30, a group of big-name New York wholesalers and retailers, including Graff and Tiffany, filed suit against Melvyn Douglas Weintraub, claiming the former owner of diamond company Wm. V. Schmidt owes them $4.3 million for gems and diamonds he allegedly consigned.
Weintraub filed for Chapter 11 on Nov. 29, 2011. His filing notes that the Schmidt company ceased operations as result of the adverse economy.
Tiffany claims in November 2011 its Laurelton division delivered 8.25 ct. and 6.62 ct. diamonds to Schmidt worth a total of $1.5 million but was never paid for them. Graff claims that Schmidt owes it $300,000 after paying only $675,000 for a $975,000 8.86 ct. diamond ring.
The suit alleges that Weintraub should be “held personally liable” for gems accrued by the Schmidt company, and claims the sales were “fraudulently induced” and that Weintraub used “false promises of payment, delaying tactics, and efforts to hinder, delay, and defraud the plaintiffs.”
Weintraub’s lawyer Wayne Greenwald disputes the claims.
“They are making allegations,” he tells JCK. “Anyone can say anything about anybody in court. We don’t think believe the complaint asserts valid claims.”
At press time, no response to the complaint had been filed.
Other plaintiffs in the suit are Lili Diamonds, Ronnie Roubin, Oscar Heyman, Fischer Diamonds, and V.F. Diamonds.