Hello Jeff,
I have intentionally not been forwarding local and industry developments that have been unfolding since our meeting in 2013 because I did not think they had enough significance that would add to the information that Russell and I had already presented. This attached special report by the Rapaport Group (Martin Rapaport is the most powerful and influential voice in the diamond industry) that came out in Nov addresses how bad and widespread the issue of overgrading of diamonds really is.
There have been several major international developments in the diamond industry over the past few months. Fraud cases were filed against Genesis Diamonds during the Summer months after the Channel 4 I-team ran a 2 part series in May focusing on the sale of EGL International certified diamonds at their stores. In Sept, the 2 largest international wholesale diamond exchanges, Rapnet and Polygon, announced that they were delisting all EGL International certified diamonds. In Nov, Martin Rapaport created this attached video stating that the argument of diamond grading being subjective is totally unacceptable. Rapaport clearly states that when using GIA terminology to grade a diamond that the grade can only be +/- one grade off and that any difference greater than this is wrong and the responsibility of the seller(the example he uses is from a Genesis sale).
In Dec, the most significant development of all occurred with the announcement that the EGL International Lab in Israel would be shutting its doors. The diamond industry has stepped up and clearly stated that the EGL International Lab in Israel and the argument that diamond grading is subjective will no longer be tolerated.
Genesis has sold diamonds from the EGL International Lab for years. They made the following claims of “Best Prices in the Country”, “Wholesale Pricing to the Consumer” and “Below Rapaport Wholesale Pricing to the Consumer” and sold industry known inferior EGL Int certs to the unsuspecting consumer by leading the consumer to believe these diamonds were great value. There is no way consumers could have known they were not comparing “Apples to Apples”. This is reinforced by Boaz’s response to Demetria in the May segment stating that the complaints are only coming from competitors. How can consumers complain about something they have no way of knowing exists? When Demetria challenges Boaz about the grades of EGL Int certs being so inflated his defense on air is that diamond grading is subjective and can be as much as 7 grades off. In a later segment done by Channel 4 addressing the fraud cases against Genesis, their defense attorney on air uses the same defense that diamond grading is subjective.
As is the case when there is a known problem with quality or performance in other industries, I feel consumers that purchased the EGL Int certified diamonds from Genesis have the right to be informed that they were deceived especially now that the EGL Int Lab in Israel is shutting its doors. These consumers have no way of knowing how badly they were misled. Not only are they paying inflated insurance premiums on an inflated diamond value but most insurance companies have the option of replacing a loss with a comparable diamond as opposed to paying the insured amount which in the case of EGL Int certs will be much lower than the insured amount. If they do not have an insurance loss they will not discover how badly they were deceived until they try to sell the diamond when there is a financial hardship, divorce or estate liquidation.
I strongly feel that everyone of the Genesis customers that purchased a diamond with an EGL Int cert has the right to know the truth about these certs, especially now that the lab in Israel was so bad that it is shutting down. My store and many others will never be able to replace the tremendous # of sales lost because of the false advertising and inflated EGL Intl certs sold by Genesis but there is still an opportunity for consumers to be notified about their unfortunate situations.
