The Diamond Guru: GIA Bribery Scandal Court Update

Date: 7/17/2008 10:42:51 AM

Author: adamasgem

JKD [ Julius Klein Diamonds] doesn't want to let THE CAT OUT OF THE BAG

PLEADS for a SINGLE JUDGE to prevent GIA from following a single Judges' order.. AGAIN, HIGHLY PREJUDICIAL EVIDENCE EXPECTED TO COME OUT OF GIA..

http://www.clerk.co.montgomery.oh.us/pro/image_onbase.cfm?docket=13164637

GIA agrees it would let the cat out of the bag!!!! What a hypocrite GIA has turned out to be.

http://www.clerk.co.montgomery.oh.us/pro/image_onbase.cfm?docket=13183928

Marty Haske GG(GIA), Senior Member NAJA, ISA Appraisal Trained(past ISA), BS(MIT)/MS(MIT)Adamas Gemological Laboratory

***

In the state case the court ordered an in-camera (in chambers, secret) production of documents by GIA dealing with the ability of Julus Klein diamonds (JKD) to submit stones to GIA (Greedy Institute of Arrogance).

This followed GIA's and JKD's refusal to be deposed on this matter, i.e. bribery

Aledgedly, this priviledge was withdrawn by a letter banning business because of JKD's supposed involvement in the Certifigate bribery scheme. JKD appealed the courts ruling for production of documents by GIA, and JKD asked for an injunction preventing GIA from folllowing the court order until the appeal was head.

GIA, of course, filed a motion concurring with Julius Klien, in effect thumbing its nose at the state trial court.

The appeal was denied, and GIA has to provide the document to the court, or else probably face contempt of court sanctions.

Here is the state appeals court ruling.

http://www.clerk.co.montgomery.oh.us/pro/image_onbase.cfm?docket=13263338

Meanwhile, previously, on the other side of town, in the Federal case, where Stafford is suing JKD for the alledged theft of a 5+ carat pink diamond, , the federal court last week, said that Stafford did not have the right to re-open discovery (of GIA) , and Stafford's attorney said in the thread above (admissability of evidence filing to the federal pdf attachment) that the issue of whether JKD had submission priviledges was pertenent to the case because, in effect, once a crook, always a crook.

Since now in the state case, the documents would have to be producced, it sort of implied that they (documents in the state case ordered by the state court) would now be submitted to the Federal court.

In a close to 200 page transcript of a deposition of a JKD employee in the state case, the emplyeee basically said that JKD had submission priviledges and would get a certificate for the Pink diamond..

Both GIA and JKD have been trying like heck to cover this up for the Federal case, because along with the theft of the diamond, are issues of tampering with evidence, which triggers (under state law) punitive damages which far exceed the value of the diamond, something to the tune of 15 million dollars, which was mentioned in a typical (and legal) lawyers demand of settlement letter, which was termed extortion by JKD's lawyers in a filing and parroted (extortion as "fact") by the some of the trade press, as the courts so noted that in the federal case.

All the tip of the iceberg in the now becoming finally exposed Certifigate scandal.

The appeals have been an attempt by JKD to delay production of documents (GIA going along with it) , because the Federal case is supposed to start next month. JKD had argued in one of the cases that they didn't want to "let the cat out of the bag", by letting GIA testify that it no longer would do business with JKD.

Now, since the GIA was so successful in the past at NOT RELEASING NAMES of those involved in the Certifigate bribery scheme, things are starting to unravel, and maybe, just maybe, some of the participants willl start lining up to play let's make a deal with the Feds.

Because it certainly smells like, and has all the elements of, an open and shut RICO case to me, and may force the NYC Feds to do their job.

It has been posited that there might have been some behind the scenes cover-up already, involving the Feds in NYC, as the whole thing mysteriously died after the Pincione "settlement", a "in house invesitgation" managed by an MCI/Worldcom lawyer hired by GIA, and lip service to the trade about releasing names of dealers and possibly sightholders who were, on a long term basis, bribing GIA for better grades in a multi milllion dollar scheme, that probably went to the very top of GIA.

What confuses the issue is that the state case, which opened up this whole thing, as I interpret it, was entirely unrelated to Certifigate, in that it involved a business naming squabble between brothers, both of whom are in competing jewelry businesses, one of whom (Jim) called a JKD employee (partner? who he had prior personal and business relationships with) as a character witness (and then withdrew his name) and the other brother John, who was hoodwinked into sending a potentially very valuable Pink diamond to JKD for possible purchase after "certification" by GIA, something they apparently were not able to do, at least under the normal straight forward business channels, because of the Certifigate scandal.

It is somewhat convoluted, but it looks like GIA will be forced to release name(s) to the court, although if they reach the light of day is another thing.

Marty Haske GG(GIA), Senior Member NAJA, ISA Appraisal Trained(past ISA), BS(MIT)/MS(MIT)Adamas Gemological Laboratory

***

In the state case, after JKD (and GIA) exhausting the appeals process (so far), and getting their collective behinds whipped, the GIA apparently turned documentation over to the court ( in response to the courts order of 6/26/08) and the lawyers involved.

This is just a published receipt for same by one of the participating lawyers

http://www.clerk.co.montgomery.oh.us/pro/image_onbase.cfm?docket=13292982

Now will come the inevitable argument again that this information to wit: whether or not JKD had received a "banishment" letter from GIA because of grading bribery, will see public light.

This is important, because it could call into question the "true" grade of any diamond supplied to retailers and subsequent consumers, by JKD as well as a whole bunch of other wholesale diamond firms (which is my understanding).

Something GIA goes to great length to cover up..i.e.

1) GIA refusing to name the bribers

2) The federal government apparently doing nothing about the Certifigate scandal

3) Billy-Boy [Bill Boyajian] getting a > $750K golden handshake

4) The consumer and the retailers getting the shaft by a tax-exempt organization (GIA)

Tick-Tock, Tick-Tock...

Marty Haske GG(GIA), Senior Member NAJA, ISA Appraisal Trained(past ISA), BS(MIT)/MS(MIT)Adamas Gemological Laboratory

***

Don't venture a guess other than "observations" that both JKD and GIA apparently royally pi**ed off the state court judge by not answering questions at the depositions, which resulted in the state court order.

I think that there is a better than 70% chance that it will be made public and get into the federal case.

Of course, if all of a sudden, the "Cat is let out of the bag", then I predict that JKD will be screaming all of a sudden for a "sealed" settlement in the Federal case.From what I have heard, both from Certifigate and this extension case, some people belong in jail, but the Manhatten Federal Prosecutor has apparently not done their job in the original Certifigate case and cover-up.

But of course, there may have already been a sealed slap on the wrist federally. That was GIA's spin doctors speciality (O'Niel), that is managing cover-ups.

Marty Haske GG(GIA), Senior Member NAJA, ISA Appraisal Trained(past ISA), BS(MIT)/MS(MIT)Adamas Gemological Laboratory

Additional Reading:

Historical Feature: GIA's Bribery Scandal Certifigate 1

RISKY CORRUPT GIA DIAMOND GRADING REPORTS Certifigate 2

GIA emerging from tough 18 months, but it's still setting the standard Certifigate 3

Upgrading the Jennifer Lopez Pink Certifigate 4

GIA " The Internet Certificate " Certifigate 5

GIA Bribery Accusations: Correspondence awaiting reply Certifigate 6

Certifigate: Rallying Support for Closure Certifigate 7

Kimberley Process,Corruption & Integrity: Is it failing ? Certifigate 8

U.S. Court Subpoenas GIA ‘Certifigate’ Records : Certifigate 9

TRUTH AND JUSTICE - NO BLACKMAIL OR EXTORTION : Certifigate 10