Russia Investigating Massive Diamond Smuggling To Israel
February 17, 05 The Russian police and the FSB internal security service have reopened an investigation into claims that Russian companies have smuggled tens of millions of dollars worth of rough diamonds to
According to reports in the Russian press and a statement by Vladimir Ustinov, The Chief Russian Federal Prosecutor, authorities suspect that in 2000, rough diamonds belonging to diamond miner Alrosa that were given to five Russian companies for polishing - were smuggled instead to Ukraine in armored vehicles and from there flown to Israel for polishing.
After polishing, the goods were smuggled back into
The companies, who had a polishing sub-contract with Alrosa, had the capacity to polish only a quarter of the diamonds they received from the miner. The excess was smuggled out of Russia to Israel.
The inquiry by the security services opened in 2001, after an armored truck with rough diamonds worth $15 million was caught in Ukraine. Authorities suspected Vladislav Davidson, an Israeli-Russian businessman, as being the organizer of the operation and arrested him.
Along with him authorities arrested a
The investigation came to an unexpected halt that year, and Davidson was released. The Federal Prosecutor recently decided to re-open the inquiry and is currently focusing on Davidson’s role in the affair.
One of the findings of the investigation is that instead of returning the polished goods to Russia, the polishers sent lower quality diamonds with a lower value in their place, while keeping the original, better quality diamonds, for themselves.
One of the many questions that will inevitably be asked is how Alrosa did not notice that it was getting back diamonds of lesser value, and if somebody at the mining company was cooperating with the swindlers.
Israeli Diamond Controller Shmuel Mordechai told IDEX Online that he did not know of any problems with rough diamond imports from
Alrosa was not available for comment.