Founded in Tel Aviv in 1974 and now with eight offices
worldwide, EGL (European Gemological Laboratory) is the target in a lawsuit in
US courts after claims of “over-grading” diamonds, certifying them as being
worth more than they really are – a charge the service vehemently denies.
Whether the issue for EGL’s alleged over-certification of
the diamonds is fraud – or the result of a decades-old difference of opinion on
how to fix and rate the value of stones – will be for the courts to decide.
EGL suffered the latest blow this week when Martin
Rapaport, chairman of the Rapaport Group, which publishes an authoritative
diamond price list and table that is considered the standard for diamond
pricing in the US, said that his service would no longer list stones evaluated
and certified by EGL for the all-important “four C’s” that determine the value
of a diamond – carat, color, clarity and cut. In a statement, Rapaport said
that his service “is opposed to the misrepresentation of diamond quality. The
over-grading of diamonds is an unfair practice that destroys consumer
confidence and the legitimacy of the diamond industry.”
The brouhaha stems from a series of lawsuits against
Genesis Diamonds, a retailer in Nashville, brought by several customers who
claim they were sold overpriced diamonds. In one case, a customer paid $135,000
for two stones, one weighing 3.01 carats and the second 3.04 carats, rated as
“excellent” and “very good” cuts by EGL. But another appraisal placed the
stones a grade lower, at “very good” and “good.” That appraisal valued them at
just $22,500. The case was covered on a local Nashville television station,
which highlighted the issue of the EGL report. Since then, other suits have
been filed against Genesis.
But EGL CEO Guy D. Benhamou said that the reports got it
all wrong — the issue is not fraud, but subjective interpretations of what
constitutes a “good” diamond. In a statement, Benhamou said that “it is well
known that since gemology is not an exact science, the same diamond sent to several
gem labs could produce different grading results. You can receive different
grades for the same diamond from several different labs. That does not mean
that any of the diamond labs made a mistake, it is simply in the nature of the
business. Any diamond grader and lab will tell you that.”
