The revelation has sent a warning to the international diamond community, as the fraudster managed to create the persona of a diamond trader that the company thought looked legitimate.
Rami Baron, president of the Diamond Dealers Club of Australia, said the deception was more sophisticated than anything that has so far been seen in Australia.
Going under the pseudonym David, the scammer sent false emails to back up payment claims. According to the International Diamond Exchange, the scammer’s profile appeared to be legitimate because it indicated that he was a diamantaire and a member of several diamond-related forums.
Baron explained that “name-dropping with several notable diamond traders and the way the scammer gathered amounts of information from within the company” made the buyer appear legitimate.
He added that in Australia, alarm bells should start going off whenever an overseas diamond buyer is interested.
Baron said legitimate overseas buyers are more likely to buy diamonds from American merchants who sell their diamonds at cheaper prices. Australian diamond merchants attract mainly local buyers as well as merchants from New Zealand and America, according to the diamond expert.
After negotiations, “David” agreed to buy two three-carat diamonds from the firm. He requested that the diamonds be shipped to a client in Turkey and asked not to make the payment in Israel. It was agreed that the money would be transferred to the Israeli company’s bank account in Hong Kong.
The Israeli company received an alleged copy of the money transfer authorising the shipment of the two diamonds. However the sham trader went a step further, contacting the Israeli company’s Hong Kong office after the supposed payment, in what is believed to have been an attempt to gather information about the company’s finance staff.
The Israeli office checked their records and saw that the email was sent from outside the buyer’s company and no money was ever deposited in its bank account.
The company did not ship the diamonds to the buyer, who has since disappeared according to the International Diamond Exchange.
The Israel Diamond Exchange has warned associate diamond bourses of the attempted scam.
Baron said jewellery merchants should check if buyers are listed under any bourses around the world to verify their authenticity.
The news comes just weeks after Jeweller revealed that some retailers were being targeted by fraudsters over email. In one reported instance, an Australian jeweller was conned into sending goods to an airport address in Singapore. The jewellery was later recovered.
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