A long-running investigation into international diamond fraud led to the arrest of nine Russians who allegedly cost their victims nearly $10 million, a law enforcement official familiar with the case said Wednesday.
The swindle victimized diamond dealers in New York City, Las Vegas and Mumbai, the official said. The FBY-NYPD-Customs and Border Protection Joint Eurasian Organized Crime Task force began investigating the ring in 2015, according to prosecutors.
The fraud involved bad checks, forged documents, and instances of people simply running off with diamonds in hand without paying.
They usually focused on small stones called "melee diamonds," court papers say, and built up trust with dealers by paying for smaller purchases before running off when they had larger debts.
One victim lost $7.4 million; another lost $2.4 million, the official said.
"The defendants allegedly took advantage of an industry wide system of credit and trust to obtain largely untraceable diamonds," said Acting US Attorney Joon Kim, "and then, using various allegedly illegal schemes, refused to pay."