"Certifigate" - one mans opinion on GIA corruption

[Garry H (Cut Nut)]

http://www.idexonline.com/


"Certifigate": Now The Cover-Up
In virtually every “gate” in recent history, the very discovery of the crimes always paled in its next phase: The cover-up. If history repeats itself, the greatest disgrace, humiliation and damage are done while the crimes are being covered up. This is the last thing that I expected to happen – and I have written in these columns that the GIA Board of Governors seems to be determined to get to the bottom of this. I probably was wrong – dead wrong. The GIA has now – at last – issued a press

Can someone place a link to the rest of this article please.
I have not read it yet - Chaim can be a bit out there at times - he seems to be right out on a thin branch this time however.

 

[strmrdr]

related press release:
http://www.gia.edu/newsroom/608/24283/news_release_details.cfm

 

[MissAva]

Full Article

This is shocking and at the same time it isn''t.

 

[MissAva]

Do you think the GIA should do a recall of certificates?

Definitely, in order to secure their reputation 50 %

No, it will damage both the GIA and the industry reputation 10 %

I don`t know 40 %
Previous Polls

This also strikes me asfunny, I thought they should to protect the consumer so I hit the first option. I can see why 40% would feel conflicted though. Coplicated issue.

 

[Garry H (Cut Nut)]

Let me quell some anxiousness that will be created once the popular press get their hands on this topic.

When a diamontaire books a diamond in to be graded in any lab it is sent thru ''blind'' with no owners name.
If someone wants to bribe the graders, the graders need to be able to identify the stone. And as theree are hundreds of graders, the briber needs to know which grader will be grading their diamond so as to know who to bribe.
So only easily identified big rare diamonds that will be graded by senior or specialist graders can be cheated on.

For the run of the mill 1/2ct to 2 or 3ct stones, of which there are hundreds or thoucands in the process at any one time, there is no way the owners of these stones can be identified, nor can the owner idendify who will actually be grading the stone.

So very few people will have anything to worry about.
I checked and rechecked the 9ct stone I just sold, and it was very fairly graded (except faint fluoro???? but then myself and my client actually prefer diamonds with some fluoro).

 

[strmrdr]

Im not convinced yet thats the case Garry there are a lot of ways of identifying who the diamonds came from if someone wants too.
They have to be tracked so they get back to the right owners.
For example if the person assigning graders to grade the diamonds was on the take someone could call and say hey im checking up on the lot of 203 diamonds that just arrived, or in this day and age of laser inscription they could be separated out that way for special treatment.

Id want way more info before coming to any conclusions and it is vital that they come clean on what actually happened.

For example:
Where stones that were borderline D/E get bumped up to D or did F grade diamonds get graded as D because of bribes?
How deep did the corruption go and who was in on it.
Is the firings the extent of it or are they just a symbolic gesture and the root problem continues.

imho the FBI should be investigating this not a auditor that is working for GIA.

 

[Garry H (Cut Nut)]

Storm i would expect you to be from the ''consprational theory group''.

Think about it from the functional operational level.

It becomes exponentially more difficult to create more levels and more wide spread corruption.

Far easier to simply bribe a few people who grade very expensive identifyable diamonds.

 

[Capitol Bill]

Obviously GIA will be facing some challenging days ahead. It may well be that we''ve yet to see the major parts of this drama play out. At a time like this perhaps it''s good to be mindful of GIA''s rich history and the gemological giants that built its reputation as the world''s foremost gemological authority. It is my sincere wish that GIA return to its roots -- where political and fundraising interests take a back seat to the leadership of the laboratory. I believe this would be the direction that GIA''s legendary founders would take.
Respectfully,
Bill Scherlag

 

[aljdewey]

another article: http://www.nationaljeweler.com/nationaljeweler/headlines/article_display.jsp?vnu_content_id=1001307753

 

[MissAva]

“The investigation revealed that, although GIA had undertaken to fortify various facets of the grading process during the past decade, additional measures are warranted,” says O''Neil in the release. “Accordingly, we have presented for the board''s consideration a number of possible enhancements of, and supplements to, existing policies governing the grading process and compliance in general. The board already has decided to implement a number of our recommendations, including the appointment of a compliance officer in the laboratory who will report to the general counsel and will oversee the enforcement of the institute''s compliance policies.”
Taken from AlJD''s article
What had they done in the past? What will a compliance officer do really, other then perhaps get bribed as well? What are the other recommendations? This is very unsettling.

 

[adamasgem]

Date: 10/20/2005 4:03:29 PM
Author:Garry H (Cut Nut)
http://www.idexonline.com/
< THURSDAY, OCTOBER 20TH, 2005, CHAIM EVEN-ZOHAR >

''Certifigate'': Now The Cover-Up
In virtually every “gate” in recent history, the very discovery of the crimes always paled in its next phase: The cover-up. If history repeats itself, the greatest disgrace, humiliation and damage are done while the crimes are being covered up. This is the last thing that I expected to happen – and I have written in these columns that the GIA Board of Governors seems to be determined to get to the bottom of this. I probably was wrong – dead wrong. The GIA has now – at last – issued a press

Can someone place a link to the rest of this article please.
I have not read it yet - Chaim can be a bit out there at times - he seems to be right out on a thin branch this time however.

Garry I don''t think the branch is that thin..Appears like a ratther thick trunk to me..

 

[diagem]

Once it will be proven that the GIA excepted bribes, (i am not sure, but by firing the CEO plus four high ranking GIA officials, i take it as they found bribe receivers!!!), it doesnt matter if it is on a one pointer or a 103 carat D-IF!?!?

Its easier for the big important stones as the bribes are Huge sums of $$$,
but who knows? there could be loads of GIA certed diamonds out there which are fake!!!!

Once you submit a diamond to the GIA,. last i recall you submit it with an ID code, (company name or individual name especially if you are a GIA member.)

And let us not forget the numerous times you are personaly in touch with the graders themselves during the recheck and observation options that each submitor can request.

Garry, I dont think it matters how big the diamond is that was certed under illegal circumstanses!!!
On the contrary, this sittuation is very delicate, and can make a big change in the industry,

WHO KNOWS, MAYBE EVEN IN A POSITIVE WAY!!!!! I personaly think that GIA or even AGS should not be looked upon as the most reliable labratories for gems!!!

It will be very interesting to follow this story.

 

[Gella]

hi my name is Angela, im from australia. Can you please advise me. I have had an engagement ring made, and im a little concerned about the effect of my setting. I have a split shank yellow gold with 5 1 point round diamonds, i am wondering if an invisible setting will work, i have a pave setting and i dont like the effect of seeing gold in between the diamonds., i was told i would not get this effect, but it seems i have. I am seeing my jeweller 2moro to see if it can be changed. I think because i have gone yellow gold i get the effect of the gold in between will it look silly with white/silver in between the diamonds, i jujst wanted a flush setting on the band.

Your advice will be greatly appreciated,

Thanks,
Angela.

 

[Garry H (Cut Nut)]

Gella you posted in the wrong place (bad girl).
we would need a photo (posted in the right place) to help you.

 

[bar01]

Doesn''t this reinforce the benefits of independent appraisals - as is strongly recommended here on PS?

It seems to me that anyone spending more than a few thousand dollars for a gem ought to send it to their own independent appraiser/lab anyway - no matter which major certificate (GIA, AGS, EGL, etc) it comes with. Trust - but verify.

 

[strmrdr]

Date: 10/24/2005 5:58:57 AM
Author: Bertrand
Doesn''t this reinforce the benefits of independent appraisals - as is strongly recommended here on PS?


It seems to me that anyone spending more than a few thousand dollars for a gem ought to send it to their own independent appraiser/lab anyway - no matter which major certificate (GIA, AGS, EGL, etc) it comes with. Trust - but verify.

makes sence to me.
Or use a vendor who will/can verify the color grade.
Might have to add it to the checklist of things to ask.
Any of the popular PS vendors should be able to verify the color.
GOG also has a colormeter one could have him run it on.

 

[Garry H (Cut Nut)]

One of the main benefits of grading reports is it makes it possible for more efficient Business to busniess trade - which in turn makes for better prices thru manufacturer, dealer, retailer etc to you guys.

If we loose confidence, then that is just as bad as your obvious lack of confidence.
Although appraisers are generally used for cut and $ issues.

 

[Garry H (Cut Nut)]

IDEX Online Special: DTC: ''A Sightholder That Bribes Puts His Sight at Risk''

October 26, 2005

Chaim Even-Zohar

In an extraordinary warning to all its 93 Sightholders, DTC managing director designate Varda Shine reacts to the Certifigate scandal and puts her clients on notice that “the DTC will not hesitate to take action where it transpires that any rumors are substantiated in relation to a DTC Sightholder or any relevant associated business.” In a most diplomatic manner – without mentioning the word GIA as such –Shine makes it clear that she looks beyond those who are suspected of malpractice and reminds Sightholders that they have a responsibility to ensure that their clients and suppliers adhere to Best Practice Principles.

Go to full article and letter to Sightholders > http://www.idexonline.com/

 

[perry]

I think it may be easier to structure a "grading upgrade" on a batch of diamonds than by just bribing every one - which would be difficult as Gary suggest.

Any supervisor knows their people - and how they grade. It would be possible to sort groups of graders such that you have one group is comprised of people who always grade "high" - and even perhaps have a sub group who grades High- high.

Then a lot could be directed by the supervisor to this group (or sub group). All the supervisor has to know is what lot of diamonds to "bump up" which should not be that hard. The actual graders may not have a clue (nor recieve any compensation).

Perry

 

[Garry H (Cut Nut)]

Date: 10/28/2005 8:33:40 PM
Author: perry
I think it may be easier to structure a ''grading upgrade'' on a batch of diamonds than by just bribing every one - which would be difficult as Gary suggest.

Any supervisor knows their people - and how they grade. It would be possible to sort groups of graders such that you have one group is comprised of people who always grade ''high'' - and even perhaps have a sub group who grades High- high.

Then a lot could be directed by the supervisor to this group (or sub group). All the supervisor has to know is what lot of diamonds to ''bump up'' which should not be that hard. The actual graders may not have a clue (nor recieve any compensation).

Perry

Not quite that simple Perry. I think the lots are not allocated with discretion.
Also all the graders in a lab are tested for consistency etc from time to time, so there again needs to be a larger and more conspiritorial system for cheating. I do not think it is that easy.

I have also talked to a big Israeli manufacturer and we can not work out any ways that you would bribe for upgrades on contested stones.

I think the issue is still about very big or easily identified special stones who the briber knows have a good chance to be graded by some well known senior graders.

 

[pricescope]

Big article by Martin Rapaport GIA’s Bribery Scandal.

The diamond industry has the right to know: What has been going on inside the Gemological Institute of America (GIA) laboratory? Have diamond graders and/or supervisors been taking bribes to upgrade GIA diamond grading reports? How long has this been going on? When did it stop? How many graders and stones have been involved? Who are the bribers? What is the GIA doing to clean up its mess?

I guess consumers have the right to know too. Especially those who bought diamonds with inaccurate reports.

 

[Garry H (Cut Nut)]

Update https://www.pricescope.com/community/threads/gia-decides-on-overhaul.36330/


GIA Abolishes Diamond Industry Donations

Cancels Rapaport Exclusivity

Free Verification Services

President Demoted

 

[codex57]

Can someone sum up what happened initially? I take it someone sued GIA for upgrading diamonds? Any more details beyond that? Like how far it went? How long? Etc?