DOJ Sues Ivanka Trump Jewelry Business Partner

Moshe Lax (pictured), the CEO of onetime sightholder Dynamic Diamond Corp. who is probably best known as Ivanka Trump’s former partner in her now-shuttered jewelry line, is being sued by the U.S. Department of Justice (DOJ) for $61 million in unpaid taxes allegedly owed by his father’s estate.

The civil suit, filed July 16 in Southern District of New York federal court, claims that Lax’s late diamantaire father, Chaim, hid assets from the Internal Revenue Service (IRS) and other creditors, to make it appear that his estate was insolvent. Following Chaim’s death in 2008, his family perpetuated the alleged scheme, the complaint charges.

The suit alleges that a number of family assets were improperly shifted to various entities. Those assets included the estate’s 50 percent interest in Madison Avenue Diamonds, the entity that produced the Trump line.

The complaint seeks to cancel certain transfers, liquidate the 50 percent interest in Madison Avenue Diamonds, and to freeze the assets of Moshe Lax and two family members.

News of the suit first appeared in Politico.

A spokesperson for the Ivanka Trump brand told the magazine: “The issues in this case have nothing to do with Ivanka or the Ivanka Trump brand. These licensing arrangements were terminated by the Ivanka Trump brand in 2016, prior to Ivanka entering government service.”

The Trump Organization had previously told Politico that Lax owed it a “significant” amount of money.

In 2017, after Ivanka Trump took a job in the White House, the first daughter’s brand shut down its fine jewelry line. Last month, the brand closed completely.

Dynamic was appointed as a sightholder in 2003, though it’s not currently on the De Beers list. Dynamic once owned a store called Lockes Diamantaires before joining with the eldest Trump daughter to launch Ivanka Trump Fine Jewelry in 2007.

In a video posted in August 2017 responding to critical media coverage, Lax admitted that, when his father died amid the height of the financial crisis, his estate owed $160 million, including a sizable debt to the IRS.

“As a trustee to [his] estate, I inherited a boatload of problems,” he said. “I did my best to make [things] right. What is being reported is primarily the result of estate problems that I inherited, and unfortunately, some of the problems continue.”

That same month, Lax talked with JCK about his plan to open Facet of Love, an experiential diamond retailer located at 800 Fifth Ave. in Manhattan. It’s not clear if that ever opened, and the New York Post later reported that landlord Eliot Spitzer was seeking to evict Lax from that space.

In 2016, KGK Jewelry, a onetime supplier to the Trump brand, won a $3.1 million judgment for money owed by Madison Avenue Diamonds. KGK was named in the current complaint as it “may claim an interest in the property upon which the United States seeks to enforce its liens.”

Lax could not be reach for comment at press time. An attorney for his sister Zlaty Schwartz, who is also named in the suit, declined comment.

(Image courtesy of Facets of Love)

JCK News Director