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The insider story of Lab Grown Diamonds
Jan 22, 2021

Countless man-made diamonds were snuck in as natural diamonds.

Truth is often stranger than fiction. Every time this mantra has been repeated, a wild story almost bordering on being unreal has followed. This is no different, so prepare for a tale like no other!


What we are about to reveal is all true; a genuine piece of history that very few outside diamond supply chain are privy to. As we are an established diamond wholesaler and have been involved in the industry for quite a while, naturally, we witnessed or participated in ‘unique’ situations and incidents, whether we wanted or not. 


We feel it is a waste not to share these stories with you, our valuable customers and readers, and we hope that you enjoy and come out with a greater understanding and appreciation of the diamond business. To protect ourselves against possible legal actions, we will not be using real names. However, all other details will be retold exactly as they happened. 

 

We are breaking the silence 

Whispers that something major was unfolding was spreading among the global diamond wholesaler business like wildfire four years ago. More substantial and concrete news soon came to us through our connections to the Diamond Wholesaler Conglomerate.  For those not well versed in the inner working of the diamond world, the Conglomerate is kind of a big deal; like OPEC, where the price of oil is set, the Conglomerate is where all the wholesale prices of diamonds are decided and fixed. They are at the top of the diamond food chain and are depended upon by all diamond miners, cutters, polishers, exporters, importers and wholesalers. Therefore, any news coming from them had to have merit. 


So, what was it that had everyone panicking? Well, it the news that a fraud of massive scope was being committed by the biggest diamond wholesaler in the world located in Russia.

 

The story

Lab grown diamonds  are nothing new; in fact, they have been in market for over 19 years. However, the market share and customer appeal of lab-grown diamonds were quite limited, mainly due to their colour: they were always yellow, while costing the same as the clear mined ones. Nevertheless, this would not be the case for much longer.

The bombshell expose came 4 years ago when it was revealed that the largest Russian diamond wholesaler was involved in a massive fraud operation where countless colourless (white) lab grown diamonds were passed through the most reputable laboratory in the world. The laboratory failed to catch on that they were lab grown, since the current understanding at that time was that lab grown diamonds were yellow, and therefore, unwittingly certified them as mined diamonds, thus inadvertently increasing their market value.


This scheme enabled the Russian wholesaler to profit massively while flooding the market with lab grown diamonds indistinguishable from mined ones. Eventually, when the certification lab realized that something was amiss, they immediately notified the conglomerate, and the operation was put to an end.

Let’s go back to the beginning

As with all such audacious frauds and schemes, the most interesting aspect is the vulnerability in the system that they were able to exploit to reap such unprecedented profit. 


Just how were they able to constantly and consistently dupe and make a fool out of the most prestigious diamond certification institution in the world over an extended period of time?


It might be obvious in hindsight, but the answer is a very simple fundamental scientific truth:


Lab grown diamonds are EXACTLY the same as mined diamonds! Down to the atom, the building blocks of matter!
Was that the full extent of the scheme? Of course not! But worry not since we promised you that we would expose all!  

The Russian wholesaler, already being one of the largest in the world at the time, regularly sent in considerable number of diamonds, mined of course, to the trusted laboratory to be certified. Gradually they intermixed in some clear lab grown diamonds to test the water and see if the lab could be fooled. With the realisation that the most advanced diamond certification lab on the planet could not differentiate between them, the Russian wholesaler started mixing in lab grown diamonds with their regular shipment in earnest and in scale to fully exploit the fact that lab grown diamonds can now be made clear instead of the universally assumed yellow colour.

 

The rare find

So how did such a seemingly foolproof and sophisticated operation get discovered and, eventually, exposed?


To fully understand how they were discovered we must lightly go over a bit of science and math. 


All man-made diamonds are “Type IIA”. What this label signifies is that since the stones are being made in a fully controlled environment with precise parameters, they are never exposed to oxygen, which, naturally, means that there is no oxidisation in the chemistry of the diamond. However, such coveted oxidation free diamonds are incredibly rare in nature with only about 2-5% of mined gem quality diamonds labelled as “Type IIA”. This fixed rarity was the crucial key that was instrumental in unravelling the Russian operation. 


As time passed on and the Russian wholesalers validating ever increasing quantity of man-made diamonds as mined ones through the certification lab, discrepancies in the probabilities started to be noticed and, thus, suspicions were raised.


The lab observed that there were simply too many “Type IIA” diamonds coming from just one individual supplier which was statistically impossible. Further investigations eventually uncovered the truth and, predictably, the whole diamond industry was shaken to the core.


The Russian company had a very successful and immensely profitable run, and to this date, its unknown how many countless labs created diamonds were certified as natural and are still circulating the market. 

 

The naughty corner 

We had heard the rumours but doubted their validity since the claims sounded far too unbelievable and farfetched.


However, the rumours were proven true when we, as one of the top leaders in the diamond industry, received official confirmation from the conglomerate when they presented us with an action plan pressuring us to cease all communication and business with the Russian wholesaler as they were now permanently banned from the entirety of the diamond industry for life.


This operation was noteworthy in another significant way, it bought lab grown diamonds to the forefront of the industry from the sidelines due to the realisation that man made diamonds were no longer confined to the being second class gems. In fact, lab grown diamonds can now be made indistinguishable from natural diamonds, and in increasing occurrences, exceed their quality. However, it would take another year before the first legitimate lab grown stones were accessible.

 

The cover up 

This, as you can already imagine, was an incredible and permanent blow to the mined diamond industry. For starters, there is already a large number of man-made diamonds certified and sold to the market as naturals currently in active circulation. Not to mention that even the most prestigious lab in the world could not differentiate between lab grown and mined diamonds, and thus, letting countless undetected stones slip through their fingers. 


There has been a concentrated effort to cover this scandal up by everyone in the mined diamond industry as they were embarrassed and taken for fools in addition to being financially gutted.
 

Why come out now?

Our core principle is to be always open and transparent with our customers and readers and so we believe we have a duty to provide them with the real insights and inside scoop.


Also, if it is not us then who? As you are aware, we at Novita Diamonds exclusively deal with lab grown diamonds due to our commitment to the health of the planet and its inhabitants, while our competitors dabble in both. Naturally, this makes them biased and in their best interest to not reveal controversial stories like this as to not negatively impact their bottom line.


We hope you enjoyed this read and came away with a deeper understanding of the diamond industry. And if you enjoyed this or thought it was informative then please share this article with your friends, family and significant other. Who know, you might have something interesting to talk about and discuss with them in the next party or get-together, be it face to face or virtual!