Last week, two clients who are also friends, asked me to go to Los Angeles to defend a parcel of rough diamonds for their client. The client is new to the business, and had purchased a parcel and wished to sell it. They did not know why the gemologist who prepared the parcel was not defending it. That being said, my friends arranged for some buyers and they were to meet in the main diamond building in an office owned by another one of my friends. The office owner was my neighbor in the diamond building for many years. I spent 35 years in the diamond district of L.A. and know many people there.
My friends sent over the manifest for me to get a sense of what the parcel consisted of. As soon as I looked at the manifest, I told my friends that the manifest was worthless and that the prices asked for were several hundred per cent below cost. In addition, there were many other problems with the manifest that showed that the manifest was a complete fabrication. Further, they were offering some extremely large VIVID, Internally Flawless colored stones that do not exist in this world.
I told my friends of my concerns and they told me they did not believe in the details of the manifest, but were absolutely sure diamonds would be there in the morning, and regardless of what was on the manifest, there would be diamonds to sell. They agreed that I would go through the diamonds first and grade and evaluate them and only after that, would they show them to the buyers.
Normally, I only go to a gig, if I have been paid up-front. I have tried trusting people to pay me after the work, but have found that system leaves me chasing after my money. In this case, they needed me in L.A. the next morning, and there was no way for them to pay my fees up-front. Because of my friendship, I put my procedures and good judgment aside, and hopped on a plane in the early morning.
When I arrived in L.A., I went straight to my friend’s office and there, met the owner of the office, and my friend who arranged the sale. Also, one of the buyer’s representatives was sitting patiently waiting for the Brink’s delivery. The delivery was scheduled for the morning and everyone was in a good and jovial mood. The lawyer for the seller was due any minute and as we waited for him, we sat around talking about jet aircraft as the buyer’s rep is a world renowned aircraft designer.
Finally, an hour later, and the subject of jet aircraft exhausted, the lawyer walked in. He was a short, thin man in his early 50’s. He seemed good-natured and friendly. He had been the lawyer for the seller for more than 30 years and had great confidence in his client’s abilities. After pleasantries were completed, I took him aside and voiced my concerns. He was quite confident that the goods were as represented and assured me every precaution had been taken to ensure the success of the sale.
It was now afternoon and despite repeated assurances, the parcel had not arrived, nor had the seller’s representative. My friend called down to the Brink’s office which is on the 8th floor of the same building and they did not have a delivery on hand. I suggested to the lawyer that he and I go down to Brink’s in person and find out about the delay.
We went in to Brink’s office, talked with the manager, and of course the manager asked for the shipping number. The lawyer did not have one. The manager then asked where it was being shipped from. The lawyer said Beverly Hills. No shipment on record was the manager’s answer. The lawyer looked and was confused. He got on the phone and called his client. The client got on the phone with his supplier, the supplier got on the phone with my friend; my friend looked at me and said that the seller’s source did not send it with Brink’s after all and it was coming with an independent shipper and t would be here in one hour.
We rushed up to the office so we could hurry up and wait. We knew we only had 59 minutes to go up 7 flights and the elevators always take so long in this building. Patiently we waited. We waited and we waited and we waited. Finally, at 6:00 P.M. the seller called and said they were sorry for the delay but that the stones would be in the office at 9:00 A.M. the following day.
I smiled at my friend and told him, if they wanted me to stay, they would have to pay me before I began any work. If it were not for my friendship, I would have jumped on the next plane out. The next morning we met in the office and once again. 9:00 came and went. The lawyer had assured my friend they would take care of me this day. The lawyer and the buyer both showed up after 12:00 P.M., still no goods, just more promises from the seller.
I told the lawyer and my friend I would not even open the parcel until I was paid. The lawyer and my friend went outside to discuss the situation and when they came back in the office, he offered me an additional $25,000 if I would let them pay me after the work. I refused. They then called the seller. The seller said his partner would be there shortly and would take care of everything. His partner arrived at 3:00. Still no goods and the partner did not have my money. Again they begged me to stay and do the deal. I said to myself, “This is a $30,000,000 sale and between the partners and the lawyer they cannot come up with a small 2 day fee? The goods are not here, and all I hear are stories.”
Again, I smiled sweetly and went over to the buyer, shook his hand, said my good-byes, kissed the cheeks of the office owner, went over to my friend and told him I was leaving and explained to him how to protect himself in this deal. Then I went over to the partner and the lawyer and shook their hands and wished them all success.
Neither the seller, the buyer nor my friends believed I was going to just walk out and kill the deal. There was a lot of money involved and they had spent weeks preparing for this sale. There were the countless conversations, the negotiations, the contracts, the promises of future deals. I was screwing up their deal and they were not happy with me. One of my friends lightly chastised me and told me I had spent too much time in Africa. The other just kept working on the deal, sure that it would happen. One week has passed. The goods have still not shown up.
None of these problems would have arisen, and much time and money would not have been wasted, had the parties followed a few simple steps. If you do not know what these few simple steps are, then call a rough diamond gemologist who does.
Louis Pearl G.G.
Click 'All' to view every article