47th Street Retailers Hit by Lawsuits, Bad Publicity

In the last few months, Diamond District jewelers have been accused of not disclosing treatments and selling fake grading reports

Three different retailers in New York City’s Diamond District have been accused of bad dealings in the last few months, with disgruntled customers charging them with everything from not disclosing treatments to selling fake grading reports.

New York City’s tabloids have had a field covering the reported rip-offs, with articles appearing in the New York Daily News and New York Post.

In the most recent case, tourist Eva Ho accused 47th Street booth operator Design By Gems of misrepresenting—and selling false reports for—three ruby rings.

According to a complaint filed July 28 in New York supreme court, Ho purchased a 12.77 ct. ruby and diamond ring for $350,000 from the company earlier this year. The ring was said to be accompanied by an American Gem Laboratory (AGL) report that stated the ring was from Burma and non-enhanced, the suit says. Ho then followed that up with a $350,000 purchase of a 73.83 ct. ruby ring, also with a purported AGL report, and a $188,000 ruby bracelet said to be from Van Cleef & Arpels. All told she spent $888,000.

However, the legal papers charge that the AGL reports were “fraudulent” (an assertion backed up by an affidavit from AGL president Christopher P. Smith); the rubies in the two of the rings were heat treated, and the treatment was not disclosed; and the origin of all the items was misrepresented. The items’ true value: Less than $50,000, the suit says.

The retailer responds to JCK: “The entire story is a fabrication, apparently orchestrated to make an insurance claim. The stone was valued at no more than $350,000.00. The woman sent emails stating that she wanted it insured for $1.5 million. As it was quite suspicious, I refused to comply. Now the customer falsely claims the stone was fake. I was not then, and am not now, willing to be drawn into a fraud. The truth will come out in court.”

This is one of a spate of recent reports charging malfeasance in the Diamond District.

In the second instance, a Long Island couple said a 47th Street retailer sold them a 5.38 ct. diamond for $87,000. The diamond turned out to be treated, and the treatment was not disclosed, reports say. The couple claim that while the retailer promised them a refund, so far none has come. At press time, this case does not appear to have spurred a lawsuit, but the couple told the Post one was in the offing.

In the third instance, Nevada businesswoman Donna Curry reportedly spent on $270,000 a 10.09-carat emerald-cut diamond ring surrounded by two 1.1 ct. pink diamonds at a 47th Street retailer. When she returned home, she allegedly found out that all three gems had been altered or treated.

Reports say that the retailer assured Curry he would refund her money, but when she saw him later, he just said, “I forgot to give these to you,” and handed her a stack of documents detailing the treatments.

Curry reportedly filed a suit against the retailer in May, but JCK could not locate it among New York State court documents.

JCK News Director