Ringers: First Cars, Now DiamondsSeptember 22, 21
Every car in the world has a unique 17-character vehicle identification number (VIN). You'll find it on the lower-left-hand corner of the dashboard, on the driver's side door and engraved in the engine block. The numbers and letters indicate country, make, model, year of manufacture, type of engine, serial number and more. It's your guarantee that the car you think you're buying is the car you're actually buying. Not unlike the laser-inscribed number on a the girdle of a polished diamond, matching it to a grading report - your guarantee that the diamond you think you're buying is the diamond you're actually buying. If only.
This week we saw yet another report of inscription-related diamond fraud. A 1.50-ct stone was submitted to HRD Antwerp for certification. The carat weight, color, cut, and final clarity grade (VS1) precisely matched the accompanying GIA report. But all was not as it seemed. The stone, supposedly a Type IIa, underwent extensive investigation, revealing details that would be missed with a standard loupe examination. There were inconsistencies in the clarity characteristics, which gave the game away. It had undergone HPHT color treatment and was a different diamond, with a fake inscription.
In the world of cars and in the world of diamonds there will always be rogues seeking holes to exploit in any regulatory system. Car rogues have been tampering with the VINs of wrecked or stolen vehicles since the system was introduced in the USA in 1954. They literally rip out the old VINs and fit the car with "cloned VINs" which match those of a "clean" vehicle, with genuine paperwork. They've had a while to perfect the scam. They make sure the new VINs match the make, model, engine etc. So a quick check (there are free, online VIN decoders) may well reveal that all is well. But if the price is too good to be true, the chances are it's a "ringer" - short for "dead ringer". Close to being the real thing, but not actually the real thing.
It's not hard to see parallels with the diamond world. Both are high-value, occasional purchases, for most of us. Both require expert valuation. And both offer rich pickings for the fraudster. Diamonds match a microscopic inscription to a grading certificate. Cars match a serial number to ownership documents. The weak link in both systems is that the number of a lower-value item can be changed to that of a higher-value one.
With diamonds it may be a challenge to fraudulently replace the inscription, but lab growns are offering a new world of opportunity. LGs are widely available, and the price gap with mined gems is getting wider and wider. Unscrupulous dealers are matching lab growns with mined stones that have the same 4Cs and other details, then inscribing them with the certificate number of the mined gem. They are the ringers of the diamond world.
In May of this year a 3.075-carat lab-grown was submitted to GIA Antwerp for update, bearing the girdle inscription of a 3.078-carat natural stone. It was, said the lab, "near-identical at first glance". The following month the IGI lab in Bangkok was asked to grade a 6.18-ct round brilliant D-color, IF, triple excellent cut natural diamond. It transpired it was a lab grown, cut and polished with "meticulous precision" to look like the real thing. It was E-color rather D, and VS1 clarity rather FL. A ringer, but not a dead ringer. And the biggest gem known to have been caught by a lab. There are many, many more examples. And who knows how many have slipped through undetected?
Criminals will always find a way to cheat the system. The system will always invent a more sophisticated way to protect itself. And the criminals will come up with a way to beat it. And so it will always be, until one day the bad guys decide that breaking the law is too much like hard work, take a solemn vow of honesty and dedicate themselves to charity work instead. If only.
Have a fabulous weekend.