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The underworld of gemstones

Part II: in the eye of the beholder


In recent decades prices of high-end “colored gemstones” (trade jargon for precious stones other than diamonds), like almost all “collectibles,” have risen dramatically. Demand has been spreading to economic classes formerly excluded at the same time the supply of high-quality material from natural sources falls, leading to constant searches for as yet undiscovered sites, which may take on the character of gold-rushes. While no doubt criminogenic factors have always existed within the gemstone business, periods of rapid price rise mean stronger temptation for illegal activities. The potential list of economic offenses, civil, regulatory and criminal, associated with the gemstones business includes: illegal mining, environmental offenses, bribery, gun-running, smuggling, “terrorist”(i.e. insurgent) financing, commercial fraud, mining-share swindles, money laundering and, not least, simple theft along with recycling stolen goods. This paper represents an attempt to understand the criminogenic factors in light of the history and current structures of the business. It fits the gemstone trade into a commercial, geo-strategic and sociological matrix, the three often interacting in mutually reinforcing ways. It asks whether, given the incentives and opportunities for illicit activity, relying primarily on industry self-regulation makes sense. But it questions whether the international regulatory regime now in place for diamonds can be applied to the far more diffuse supply-side of the colored gemstone market. The paper is divided into three parts. The first, “Under the Rainbow,” examined the shady side of gemstone mining in a geo-political context. The current one, the second in the series, entitled “In the Eye of the Beholder,” looks at fraud in cutting and polishing of rough gemstones into finished gems. The third “Hot Rocks, Cold Cash” will focus on illicit activity in the retail jewelry trade.

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  1. Unlike the great majority of precious and semi-precious stones, lapis is not a mineral, it is a rock, a composite of many minerals, and therefore can vary greatly in constituent proportions.

  2. Jewelers’ Circular Keystone May 1991

  3. Brilliance is measured by the amount of light that can be emitted through the gem to the viewer; fire is the spectrum of colors seen when light is shone through the stone; luster refers to amount of light reflected to the viewer from the surface of the stone—it depends on refractive index and surface characteristics though is independent of color

  4. Hughes [6]. Emeralds are actually oiled twice. A rough stone is dull and opaque—hence cutters fill it with mineral oil to determine the best way to facet it. But that oil is removed after cutting is finished. The second process takes place to enhance an already cut and polished stone.

  5. Hughes, Ruby, 127.

  6. Color diffusion can be detected. In a natural crystal the color forms zones parallel to the crystal faces—in a treated one, they follow the polished facets which need bear no relationship to natural crystal faces. Color penetration, too, is greater at the edges with a diffused stone. And any surface imperfections will show a bleeding of color into them, which is not eliminated by polishing. Nonetheless, those are clues only a professional can find. Amateurs buyers get taken. See Hughes [24].

  7. Indian Ocean Newsletter 6/4/02, 27/7/02; Bilger Burkhard, “The Race for Madagascar’s Jewels” The New Yorker 2/10/06. Thanks to Elliott Cappel for bringing these techniques to my attention.

  8. Two useful , if somewhat dated, general overviews are by Nassau, Gems Made By Man; and Yaverbaum [16].

  9. Hughes, Ruby, 154

  10. Thanks to Jay Bahadur and Thomas Allen for work on this issue.

  11. See especially Mathia Muindi and Cathy Majtenyi “Tanzania: Miners accuse company of setting monopoly” AFRICANEWS June 2001; “TanzaniteOne Copies DTC” Africa Mining Intelligence 9/2/05

  12. Financial Times 8/8/00, 23/5/01.

  13. Global Witness was still promoting the legend even after the story had been exposed as bogus (For a Few Dollars More, 17–18). For a review of the “evidence” see Naylor, Satanic Purses, 270–3

  14. Wall Street Journal 16/11/01.

  15. Tanzanian Mineral Dealers Association, press release, Nov. 21, 2001.

  16. “Gem May Fund Terrorism” ABC News 14/12/01. See Professional Jeweler Daily News Archive 19/12/01

  17. See the story of how the gem dealer Michael Avram uncovered the real story, recounted by Robert Weldon in “Tanzanite Sleuth,” Professional Jeweler Magazine May 2002.

  18. Arizona Daily Star 10/2/02.

  19. ABC-News 6/7/02. An earlier ABC broadcast that effectively merged tanzanite and terrorism and therefore suggested that buying tanzanite was supporting terrorism, was subject to a blistering attack by Cap Beesley, president of American Gemological Laboratories, the number-one laboratory in the world. Beesley quite correctly stated that the program and interviewer “had an agenda that required specific sound bites to support a particular position and create the illusion of completeness.” On the other hand, what else is TV “news” all about?

  20. See “Tanzanian government bans export of rough tanzanite” Jewellery Business Aug. 2005

  21. An excellent early account is Kunz and Stevenson [9].

  22. My thanks to Pierre Akkalian for this information. See also Hughes, Ruby, 105, 131.

  23. US Fish and Wildlife Service “One Million for Mussels” Press Release 24/7/98

  24. These industry trends are examined by Fred Ward [14].

  25. Kunz, Pearl, 378.

  26. These industry trends are examined by Fred Ward’s [14] typically excellent, lively and beautifully illustrated.

  27. Gemstone Forecaster Vol. 16, No. 1, Fall 1998.

  28. See the debate in 1995 at the Athens Conference of the Confederation of Jewelry, Silverware, Diamonds, Pearls and Stones reported in Jewellry News Asia July 1995.

  29. Thanks to Professor Pamela Ritchie of the Nova Scotia College of Art and Design for her comments on this issue.


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Correspondence to Thomas Naylor.

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Naylor, T. The underworld of gemstones. Crime Law Soc Change 53, 211–227 (2010).

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