Israeli Diamond Dealers Sue GIA And Rappaport For $180 Million

The Yelazarov family of diamantiers claim that their companies have been falsely accused by the GIA for allegedly temporarily elevating the colour grades of some of their diamonds.

Lawsuit of $180 million has been submitted earlier this month by Israeli diamond dealers, the Yelazarov family, against the Gemological Institute of America (GIA) and Rappaport.

The suit was submitted to the Supreme Court of New York by the law firms of Miller- Leiby from New York and Adv. Amir Altshuler from Israel.

The lawsuit was filed in New York by two Israeli diamond companies: LYE Diamonds Ltd. and ESGD Diamonds Ltd., which are owned by individuals Gabby Yelazarov and Yossi Yelazarov, against the GIA labs, its vice president Mr. Thomas Moses and Rappaport, et al.

Yelazarov family of diamantiers claim that in May 2015 the GIA and Rappaport published a report that hundreds of diamonds, attributed to the family’s companies, were suspected as having been temporarily treated in a special way which supposedly raised their color grade at the stage of lab examination and then “disappeared” after a short period of time.

In such a manner the affected diamonds allegedly received gradings that did not reflect.

Legal counsel for the family, Amir Altshuler, said, “The lawsuit pertains to the GIA monopoly which controls the worldwide diamond grading market; there may be fundamental injustices in a number of areas, including the possibility of fraud or abuse of monopolistic power.”

ccording to the lawsuit, the Yelazarov family’s diamond businesses has spanned over 40 years and initially began by the father (who has since deceased).

In about 2012, after the father’s demise, the family business split into two leading companies, one owned by Yossi Yelazarov and the other by Gabby Yelazarov.

In an announcment by the family’s spoksman the Yelazarov family claim that “the false publications intensified both in Israel and outside of Israel and were accompanied by quotes from the GIA according to which experts on their behalf cannot identify what treatment was done since it was so special, however determined unequivocally that treatment was done.”

The Yelazarov also said, “Such publications hit family as lighting on a clear day and caused major damage to their businesses.

To clarify, from income of over 12 million Dollars in 2014, LYE Diamonds sunk to approximately 13,000 Dollars since the defendants actions in 2015. ESGD Diamonds’ income dropped from over 19 million Dollars in 2014 to less than 700,000 since May 2015.”

According to the family complaints were filed with the Israeli police as well as the FBI but files were closed and found not to have basis.

Yelazarov claim they did not receive any warning notice from the GIA and/or Rappaport prior to said publications and had no idea what was going on. As a result of GIA’s publications, Rappaport posted on internet sites and distributed emails that the diamonds were upgraded by up to three color grades (despite the GIA’s own representation that its standard deviation is up to three color grades). “Rappaport urged the trade not to purchase the diamonds and removed 500 diamonds which were attributed to Yelazarov, from its trading platforms.” the family sposman added.

“The GIA harmed their freedom of employment and ruined their business in the industry. Rappaport and GIA harmed the reputation and good name of the Yelazarov family and caused all the other diamond dealersto request the return of the diamonds in their possession which were originally owned by companies of individual Yelazarov members.”

A defense has yet to be submitted.

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