I am sitting at the airport in Paris waiting for my flight to the DRC (Congo).As I am awaiting to board my fourth flight on this very long day, I thought about all the offers I receive daily. Several times a week, I receive offers for very large quantities of 5 carat to 25 carat D-H VVS-VS rough
diamonds. In addition, almost as often, I receive requests from buyers to purchase very large quantities of the same. You would think with all these offers to buy and with customers who have gigantic appetites, I would be one of the richest gemologists in the world. After all, if you have the seller, and you have the buyer, you would expect to make large commissions as well as
gemological consulting fees.
How is it that although I make a very good living, I am not filthy rich? Why is it that despite these incredible offers of great riches, I am still running around to third world, diamond producing countries doing simple evaluations of rough? Why should I bother to do 30 plus hours of travel
when easy money is just begging me to pick it up?
Yes, you could be correct. Maybe I am just not smart enough to make one of these deals work despite 39 years in the diamond business. Maybe I m just unlucky. Perhaps I was born under a bad star; it could be bad karma, or I don’t close megadeals because I am mean to dogs. You may even think I am being punished for beating my wife and children. (No dogs, wives or children were beaten in the writing of this article.) Or maybe, just maybe, most of the people who tell you they have large quantities of diamonds available are liars, fools or thieves.
I have never completed a deal for hundreds of thousands of carats and I have never closed a deal for hundreds of millions of dollars. However, I have been paid many times to go to Zurich, Geneva, New York, Dubai and South Africa to evaluate hundreds of millions in diamonds that were to be shown at Malca-Amit and or Brink’s and when we got there, the stones did not exist. It is painful to watch your client when they realize they were fooled and threw away many thousands of dollars in expenses.
I always ask my clients if they have verified the seller before I accept the assignment. They almost always say yes they have. At this point, it is none of my business how they have verified the seller. I have asked the question and do not question the abilities of my clients. I will of course, offer to verify sellers as part of my consulting services if the client requests, but few do. It is well known that gemologists get paid before we go on assignment. If your supplier does not show up with goods, or the goods have no relationship in quality and quantity to what was promised, gemologists still get paid. In addition, when you go to these countries to view goods, you incur all the transportation costs as well as expenses for hotels, meals, and everything else. This often adds up with gemo fees to be around $20-$30,000 a trip.
You would think that with a $20-$30 grand risk, you would be very careful when you engage a seller. My experience has been that people are blinded by need and greed. They want to believe. And, because they want to believe, they miss the RED FLAGS flapping all around them. For you brokers and buyers here is one easy step to verify the seller. If you follow my advice you will save
yourself hours of phone conversations, useless paper work shuffling, and much time, money and disappointment. Here it is…
For brokers, before you begin any introductions to your valuable and easy to lose clients, ask the seller where the goods are currently. If he tells you they are at Brinks or Malca then tell him that your clients will only engage if you have verified that you are dealing with the actual seller and that you must verify that the goods are where the seller says they are. Tell him to call Brinks or Malca and to instruct the safe-house manager to disclose to Mr. Buyer that Mr. Seller indeed has a large parcel at the safe-house. Tell the seller, you do not need to know the amount it is insured for, or even the quantity available. All you want to do is to have the manager at the safe-house verify that they have the sellers diamonds in their possession and they are under the company of Mr. Seller. Make sure the seller understands that only the buyer will call the safe-house.
If he agrees to do so, then get the name of the manager and the phone number to the safe-house from the seller. Now go to the web and look up the number for yourself to verify you have the right number. Call the number and verify the name of the manager. If everything checks out, give this to your buyer to call and verify. If Brinks or Malca are instructed by the seller to give out this information to a particular person they will comply. If the seller does not want to do this, then walk away from the so-called seller and quickly as you can. Do so without regret.
For you buyers: Once you have verified the product is at the safe-house you can show POF. Do so only bank officer to bank officer. If they ask for a financial instrument or to block your funds walk away. What you only need show at this point is an ability to pay. If this has been agreed to, hire your gemologist to talk to the seller’s gemo or sorter so he can ask questions that will help determine if the goods are as represented. If they will not do this it is because they cannot do this, which means they are not the seller. In order to come to a price, the seller had to have someone sort and evaluate the goods. This person knows what is in the parcel. Your gemologist knows the questions to determine if you should hop on a plane and put out thousands of dollars in expenses. It is better to pay a gemo a day’s pay to do a preliminary evaluation then to spend $30,000 to find out the goods are crap. If you follow these two basic steps you will eliminate 99% of the phony
deals offered. If you want to know the rest of the story, call me, or your favorite gemologist.
Oh, by the way, I actually don’t have a million carats to sell. I only have 900,000 at Brinks, no
POF needed. Every stone is D-E color VVS1 from 5-25 carats for $1800 per carat. Most of the stones have magic properties and each stone comes with a free coupon to Disney World. You can reach me at +1 (800) RED FLAG.
Louis Pearl G.G.
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