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WARNING! Enchanted Diamonds Scam! Buyers Beware!

RSZ

Rough_Rock
Joined
Jun 17, 2019
Messages
50
how can I lawsuit?
I bought diamond and platinum ring
$:cry2:
can I get information?
You need to get in contact with Ajay at RareCarat. Go to rarecarat website and send them an email via their site or call them. They are helping the victims.
 

Golden_bird

Shiny_Rock
Premium
Joined
Nov 17, 2017
Messages
411
Please if there are any new victims, refer them to rarecarat.com and get in contact with Ajay there. I was just contacted by another victim who is just finding out they were scammed.
It’s a horrible situation! Did you guys get any update ?? What’s going on right now ?
 

autumngems

Brilliant_Rock
Premium
Joined
Jul 24, 2003
Messages
1,372
This is the kind of thing that gets you looked up on the web for your address and payback
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
I just finished reading through the SDNY Bankruptcy Court file I purchased this evening.

In the corporate bankruptcy petition filed by the lawyer on June 20, Online Diamonds International d/b/a Enchanted Diamonds lists $203,000 in Assets.
  • But $15,000 of that represents the security deposit on the new office on Broadway that ED moved into in March of this year, so it's not money sitting in ED's bank account (which has just $35,000 in it). The office lease runs until March 1, 2026, at an annual rent of at least $67,570. ED paid just 1 month's rent to his new office landlord before closing up shop.
  • The bulk of the Assets -- $150,000 (an oddly "round" figure it seems to me) -- is attributed to the company's diamond inventory. The petition later states, however, that ED owes 8 diamond-gemstone suppliers in the US and Mumbai nearly $162,000.
  • ED is not claiming to have any diamond business-related equipment/tools; just some office furniture and computer equipment with a stated total value of merely $3,000.
On the Liabilities side (listed total of somewhat more than $1.811 million),
  • ED owes $225,000 in loans from Loan Building WebBank (a PayPal company) and Libertas Funding (more about Libertas later)
  • Three individuals are owed approximately $288,000 altogether; customers who got stiffed on orders of less than $75,0000 each -- plus the diamond-gemstone suppliers and the office landlord -- constitute the majority of the remaining creditors.
  • But whaddya know, ED owes Joshua Niamehr himself almost $50,000 for loans he purportedly made to the company at some unspecified point(s) in time. :boohoo: [teeny violin]
But there's additionally maddening news. I checked the NY State courts' online dockets & discovered that Libertas Funding is suing ED and Joshua in Nassau County (Long Island) for breach of contract. According to Libertas' filed Complaint, Libertas entered into a formal agreement with ED whereby Libertas agreed to advance $125,000 to ED in exchange for $160,000 of ED's receivables; ED was obliged to authorize Libertas to make daily ACH withdrawals of a specific amount from ED's bank account until the agreement was fulfilled. On March 13, 2019, Libertas transferred $125,000 to ED & was initially able to make the agreed-upon withdrawals. But after Libertas received payments of about $55,0000, ED cut off Libertas' access to ED's bank account. Since then, neither ED nor Joshua (the guarantor of the loan under the agreement) has made any payments to Libertas.

Turning back to the bankruptcy petition where ED was expected to declare what payments, etc. were given to any corporate "insider" in the year leading up to the filing date of the petition, we see that Joshua apparently used the cash infusion from Libertas Funding to give himself $30,000, in satisfaction of 2 other loans he'd supposedly made to the corporation. ED paid Joshua $15,000 on March 14 -- the day after Libertas transferred the $125Gs -- and another $15,000 on March 22. (Joshua also received a "net salary" of $75,066, but the dates of his salary payments don't appear in the petition.)

What's coming up next:
The lawyer representing 34 of ED's wronged customers has brought in a bankruptcy attorney, who has asked Bankruptcy Court Judge Bernstein to issue an order authorizing an "examination" (similar to a deposition) of Joshua next Monday, August 19. Here's hoping that the attorney rakes Joshua over the coals, holds his feet to the fire!!
 
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Bron357

Ideal_Rock
Premium
Joined
Jan 22, 2014
Messages
3,604
So where and how does $1.8M mysteriously and quickly disappear to?
If his diamond assets in hand are even less $$$ than the amt owing to the diamond brokers, if the Landlord hasn’t been paid, if apparently staff haven’t been paid, if he has taken money from clients and not bought the diamonds to complete the orders AND he has managed to borrow more money -
WHAT has it been spent on?
 

Und1234

Rough_Rock
Joined
Jun 17, 2019
Messages
14
I didn't, I'm not part of the group anymore since I was the CC customer and was able to CB.

Was it positive news at least?
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
@MollyMalone
THANK YOU so much for the update. I have been wondering what had happened to this and to Joshua.
So no criminal fraud charges against him?
* * *
We've not heard anything here about any criminal investigation since June 20 -- 5 days after @Thomas Lau sounded the alarm -- when @RSZ reported [at post #228] that the Manhattan DA's Office had assigned an agent/investigator to the matter. My sense is that the victims' attention has been focused on the civil litigation, although I fear the odds of that ending in financial satisfaction are slim to none, given the relative modest assets reported in the bankruptcy petition vs. the enumerated debts.
So where and how does $1.8M mysteriously and quickly disappear to?
If his diamond assets in hand are even less $$$ than the amt owing to the diamond brokers, if the Landlord hasn’t been paid, if apparently staff haven’t been paid, if he has taken money from clients and not bought the diamonds to complete the orders AND he has managed to borrow more money -
WHAT has it been spent on?
Good question! The corporate tax returns were not in the file I purchased, altho' I expect the independent, bankruptcy trustee will demand them, if he doesn't already have the most recent returns. But I was surprised to see that the company's gross revenues were appreciably higher in 2018 than in 2017 & were seemingly well on their way this year to topping 2018. Granted, these figures are simply gross revenues. But as of now, it's the only "snapshot" I have:
Enchanted Diamonds bankruptcy petition excerpt.png
 
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Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,893
First off- Molly, I can't ever thank you enough personally for putting these complex matters into easily comprehensible terms.
Some of what's written cause me a few questions.....I'd very much appreciate your input.
According to Libertas' filed Complaint, Libertas entered into a formal agreement with ED whereby Libertas agreed to advance $125,000 to ED in exchange for $160,000 of ED's receivables
How is it possible for a company selling for cash (customers must pay in full before receiving the merchandise) to have receivables?
In my experience, a receivable is created when a business sells something and gives terms ( time to pay) to the buyer- which was clearly not ED's business model. Based on my connections, they never sold to the wholesale market on terms. Seems unlikely that Libertas gave out that kind of moolah based the word of ED.
It leads me to question the validity of more of the figures....like their sales figures- could they have fudged a lot of these numbers?
My experience is limited to my own company - quite possible I'm missing something.....
 

whitewave

Ideal_Rock
Premium
Joined
Feb 29, 2012
Messages
8,636
First off- Molly, I can't ever thank you enough personally for putting these complex matters into easily comprehensible terms.
Some of what's written cause me a few questions.....I'd very much appreciate your input.

How is it possible for a company selling for cash (customers must pay in full before receiving the merchandise) to have receivables?
In my experience, a receivable is created when a business sells something and gives terms ( time to pay) to the buyer- which was clearly not ED's business model. Based on my connections, they never sold to the wholesale market on terms. Seems unlikely that Libertas gave out that kind of moolah based the word of ED.
It leads me to question the validity of more of the figures....like their sales figures- could they have fudged a lot of these numbers?
My experience is limited to my own company - quite possible I'm missing something.....
I have no doubt in my opinion that there could have been shifty things going on, speculating, not a fact, for discussion only. And all allegedly.
 

Rockdiamond

Ideal_Rock
Trade
Joined
Jan 7, 2009
Messages
7,893
I think my post was poorly phrased.
Basically I was I interested in Molly's opinion - or anyone else who might have insight.
Would prosecutors be able to charge someone with criminal charges if they inflated the sales and receivables numbers?
 

Bron357

Ideal_Rock
Premium
Joined
Jan 22, 2014
Messages
3,604
First off- Molly, I can't ever thank you enough personally for putting these complex matters into easily comprehensible terms.
Some of what's written cause me a few questions.....I'd very much appreciate your input.

How is it possible for a company selling for cash (customers must pay in full before receiving the merchandise) to have receivables?
In my experience, a receivable is created when a business sells something and gives terms ( time to pay) to the buyer- which was clearly not ED's business model. Based on my connections, they never sold to the wholesale market on terms. Seems unlikely that Libertas gave out that kind of moolah based the word of ED.
It leads me to question the validity of more of the figures....like their sales figures- could they have fudged a lot of these numbers?
My experience is limited to my own company - quite possible I'm missing something.....
Hmmm.
In the “dying moments” ED was offering, in exchange for Happy and satisfied client stories” up to $2,500 off the setting cost after 90 days (or something along those lines). Of course ED was gone before any client could take advantage of this offer, perhaps towards the end ED went to offering “payment terms” to potential buyers.
A couple of ....
Hey Mr Client, order this $50,000 ring now and you can pay it off in 6 or whatever monthly installments.
So then ED went to Liberia’s with a couple of these agreements saying “We are due $160,000 by December but oops we’re cash strapped, I’ll give you the $160,000 owing for $120,000 from you now.
Hmmmmm.
 

Hiyunglee8

Rough_Rock
Joined
Oct 27, 2015
Messages
2
Any updates on what's going on for those of us following this case?

Also, just looked through the bankruptcy filing. Looks like Joshua and various family members show up multiple times as creditors of the company. Keep it classy.
 
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RSZ

Rough_Rock
Joined
Jun 17, 2019
Messages
50
I think my post was poorly phrased.
Basically I was I interested in Molly's opinion - or anyone else who might have insight.
Would prosecutors be able to charge someone with criminal charges if they inflated the sales and receivables numbers?
While I’m just a victim in this, the answer to your question is likely a yes. Fudging numbers affects taxes and the gov’t is always after their tax money with dogged persistence. Lol. :lol-2:
 

RSZ

Rough_Rock
Joined
Jun 17, 2019
Messages
50
We've not heard anything here about any criminal investigation since June 20 -- 5 days after @Thomas Lau sounded the alarm -- when @RSZ reported [at post #228] that the Manhattan DA's Office had assigned an agent/investigator to the matter. My sense is that the victims' attention has been focused on the civil litigation, although I fear the odds of that ending in financial satisfaction are slim to none, given the relative modest assets reported in the bankruptcy petition vs. the enumerated debts.

Good question! The corporate tax returns were not in the file I purchased, altho' I expect the independent, bankruptcy trustee will demand them, if he doesn't already have the most recent returns. But I was surprised to see that the company's gross revenues were appreciably higher in 2018 than in 2017 & were seemingly well on their way this year to topping 2018. Granted, these figures are simply gross revenues. But as of now, it's the only "snapshot" I have:
Enchanted Diamonds bankruptcy petition excerpt.png
Not at liberty to speak on this matter but, digging deeper may reveal more information should you want it.
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
In response to queries/comments posed by @Rockdiamond @Bron357 and @Hiyunglee8 :
Re: Libertas Funding LLC v. Online Diamonds International & Joshua Niamehr, Nassau County Supreme Court Index No. 0608770/2019
  • Were ODI's books "cooked"? Who knows; I don't have enough information to opine whether that's likely or not. I can say that ODI's bankruptcy petition provides the name and address of the CPA that it says was responsible for maintaining ODI's financial records for the 2 years preceding the June filing date of the bankruptcy petition; the CPA appears to be wholly independent of ODI in that his office address for the past several years has never been at any of the street addresses for ODI/Enchanted Diamonds.
  • Libertas has "discontinued, without prejudice" its lawsuit against ODI for the time being. Joshua has filed a motion to dismiss Libertas' lawsuit against him personally, saying they can't come after him because under "the fine print" in the Agreement of Sale of Future Receipts, the halt of business operations due to corporate bankruptcy excuses the non-performance of the company's obligations under the Agreement. This argument, however, conveniently ignores Joshua's own, unconditional obligations as the individual Guarantor under the Agreement. His motion is currently scheduled for October 4.
--> Joshua also has made a motion to dismiss the lawsuit -- initiated in New York County (Manhattan) Supreme Court on behalf of one of the ED victims by Peter Cane, Esq., the lawyer hired by Rare Carat's CEO -- insofar as the civil complaint targets him personally as a defendant. He would have that court dismiss on the ground that the complaint's allegations are fatally deficient. That motion is currently on the judge's submission calendar for October 15. The lawyer for Online Diamonds International d/b/a Enchanted Diamonds has not yet filed anything in this Manhattan case.
The attorney for the "Consumer Creditors Group" in the bankruptcy court recently acknowledged in his motion papers in bankruptcy court that the state court action is stayed by virtue of 11 USC § 362 (a):
https://www.law.cornell.edu/uscode/text/11/362

Re: Matter of Online Diamonds International d/b/a/ Enchanted Diamonds, the corporate bankruptcy case pending in the federal Bankruptcy Court in Manhattan
  • The bankruptcy Trustee has reached a settlement agreement with the landlord of the last office premises leased by ODI/ED; that's awaiting Judge Bernstein's approval.
  • Whether the Consumers Creditors Group -- represented by the attorney with bankruptcy expertise that Peter Cane brought in -- will be able to review requested documents & "examine" (question) Joshua Niamehr at length is a matter that has not yet been resolved. Looks like Judge Bernstein will be hearing oral argument on that this Thursday, Sept. 19.
Not at liberty to speak on this matter but, digging deeper may reveal more information should you want it.
I don't know what other information @RSZ might be referring to, sorry. In addition to periodically checking & paying for the online court records, I have Google Alerts set for Online Diamonds International, Enchanted Diamonds, and Joshua Niameher, but nothing newsworthy has popped up via Google in recent months.
 
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MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
The bankruptcy Trustee has arranged for Online Diamonds International's inventory-- and that of another bankrupt diamond dealer-jeweler, Sirgold, Inc. -- to be auctioned off on November 20 at Maltz Auctions in Central Islip, NY (Long Island). More info will be added to this recently created web page:
http://www.maltzauctions.com/auction/355095/loose-diamonds-jewelry/
 

PreRaphaelite

Brilliant_Rock
Joined
Feb 2, 2015
Messages
1,543
You have to put down a cash deposit, I think it is about 25%
Follow the link and email the auctioneer for the bidder registration form...
And come back and tell us what you bought!
 

Nikki1415

Shiny_Rock
Joined
May 17, 2018
Messages
423
You have to put down a cash deposit, I think it is about 25%
Follow the link and email the auctioneer for the bidder registration form...
And come back and tell us what you bought!
Is it 25% of the predicted final price or something? Do you pay the deposit during the inspection period right before the auction? I really don't know how this works. This is more complicated than ebay lol. :lol:
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
You have to put down a cash deposit, I think it is about 25%
Follow the link and email the auctioneer for the bidder registration form...
And come back and tell us what you bought!
Is it 25% of the predicted final price or something? Do you pay the deposit during the inspection period right before the auction? I really don't know how this works. This is more complicated than ebay lol. :lol:
To get a better handle on this, we'll have to wait for the web page to be updated with a copy of the full Terms & Conditions for this particular auction, the full roster of items to be sold with lot numbers assigned, and probably a registration form. As of now, the auction house's web page for this auction simply says that winning bidders are expected to pay at least 25% in cash or "certified funds" upon "knockdown of the bid," meaning when the auctioneer brings her/his hammer down on the podium to signify the last bid is the winning one.

So no, you won't have to give them any money before the auction gets underway (that would be a highly unusual requirement). And it sounds as if they may permit you to pay the balance of the bid -- plus, I'm assuming, a buyer's "premium" (i.e., money above the hammer price, typically a percentage of the hammer price, which is the commission that goes to the auction house, not the seller) -- within, say, 24 hours rather than pay the total amount right then and there.
 
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lydial

Shiny_Rock
Joined
Oct 10, 2010
Messages
357
Q: if there are diamonds in the inventory that were bought by members of the lawsuit, shouldn’t the attorneys request a review of the GIA certs to determine if they are technically owned by the lawsuit members? Instead of auctioning them off? Would that not amount to auctioning stolen property?
 

MollyMalone

Ideal_Rock
Premium
Joined
Jun 2, 2013
Messages
2,899
Q: if there are diamonds in the inventory that were bought by members of the lawsuit, shouldn’t the attorneys request a review of the GIA certs to determine if they are technically owned by the lawsuit members? Instead of auctioning them off? Would that not amount to auctioning stolen property?
It's my understanding (keep in mind that bankruptcy law is not my area of professional experience) that, generally speaking, the assets of a corporation that's declared Chapter 7 bankruptcy are all considered part of the bankruptcy "estate," which will be distributed upon liquidation to those owed money in accordance with the statutory provisions, e.g., "secured creditors" have higher priority than "priority unsecured creditors," who in turn outrank general unsecured creditors.

While we've not seen posts from many who were scammed, some of the ones we have heard from, who thought they had purchased diamonds with GIA lab reports, discovered -- after ED shut down -- that those diamonds were listed on other websites, i.e., they were stones in virtual inventory that ODI/Enchanted Diamonds had not paid for, never had in their own corporate inventory. Also, there are diamond wholesalers who are collectively owed more money, for supplying diamonds to ED's actual inventory, than the estimated value of the diamond inventory listed on the bankruptcy petition. So although it sure seems unlikely that any fleeced customer is going to be made whole (or even close to it), the bankruptcy statutes enacted by Congress are intended to make the best -- in the "big picture" sense -- out of bad, and frequently complex, scenarios.

The lawyer with bankruptcy expertise, hired by the attorney for the "Consumers Creditors Group," is, however, better positioned to answer this question than I am ;)) and I'd sure like to think he's informing his clients of whatever their viable options may be.
 
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