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Israeli Diamond Dealers Sue GIA And Rappaport For $180 million

The Yelazarov family of diamantiers claim that their companies have been falsely accused by the GIA for allegedly temporarily elevating the colour grades of some of their diamonds.

Diamonds Stay in South Africa


Lawsuit of $180 million has been submitted earlier this month by Israeli diamond dealers, the Yelazarov family, against the Gemological Institute of America (GIA) and Rappaport. The suit was submitted to the Supreme Court of New York by the law firms of Miller- Leiby from New York and Adv. Amir Altshuler from Israel.

The lawsuit was filed in New York by two Israeli diamond companies: LYE Diamonds Ltd. and ESGD Diamonds Ltd., which are owned by individuals Gabby Yelazarov and Yossi Yelazarov, against the GIA labs, its vice president Mr. Thomas Moses and Rappaport, et al.

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READ MORE: Yelizarov diamonds

Diamonds Stay in South Africa

The Gemological Institute of America (GIA) has sent out a laboratory alert recalling 424 diamond grades. The diamonds were treated with a process that temporarily improved their color by up to three levels. They were More…


The Yelazarov family of diamantiers claim that in May 2015 the GIA and Rappaport published a report that hundreds of diamonds, attributed to the family’s companies, were suspected as having been temporarily treated in a special way which supposedly raised their color grade at the stage of lab examination and then “disappeared” after a short period of time.

In such a manner the affected diamonds allegedly received gradings that did not reflect.
Legal counsel for the family, Amir Altshuler, said, “The lawsuit pertains to the GIA monopoly which controls the worldwide diamond grading market; there may be fundamental injustices in a number of areas, including the possibility of fraud or abuse of monopolistic power.”

According to the lawsuit, the Yelazarov family’s diamond businesses has spanned over 40 years and initially began by the father (who has since deceased).

In about 2012, after the father’s demise, the family business split into two leading companies, one owned by Yossi Yelazarov and the other by Gabby Yelazarov.

In an announcment by the family’s spoksman the Yelazarov family claim that “the false publications intensified both in Israel and outside of Israel and were accompanied by quotes from the GIA according to which experts on their behalf cannot identify what treatment was done since it was so special, however determined unequivocally that treatment was done.”

The Yelazarov also said, “Such publications hit  family as lighting on a clear day and caused major damage to their businesses. To clarify, from income of over 12 million Dollars in 2014, LYE Diamonds sunk to approximately 13, 000 Dollars since the defendants actions in 2015. ESGD Diamonds’ income dropped from over 19 million Dollars in 2014 to less than 700, 000 since May 2015.”

According to the family complaints were filed with the Israeli police as well as the FBI but files were closed and found not to have basis.

Yelazarov claim they did not receive any warning notice from the GIA and/or Rappaport prior to said publications and had no idea what was going on. As a result of GIA’s publications, Rappaport posted on internet sites and distributed emails that the diamonds were upgraded by up to three color grades (despite the GIA’s own representation that its standard deviation is up to three color grades). “Rappaport urged the trade not to purchase the diamonds and removed 500 diamonds which were attributed to Yelazarov, from its trading platforms.” the family sposman added.

From Yelazarov announcment:

“GIA’s vice president, Mr. Tom Moses, testified during an arbitration in the Israeli Diamond Bourse and could not explain the alleged findings which turned out to have never existed. His testimony was found to have discrepancies with the information known to the arbitrators, while Mr. Moses was not able to specify what the claimed treatment in fact was; how the diamonds were examined; or details of the diamonds in the presentation he displayed; which objective professional could testify that he saw the diamonds before and after the alleged treatment; and even refused to provide a diamond as an example and/or any professional document upon which the GIA’s results are based, since he claimed that no documentation was produced for the results of the examinations.

From the lawsuit it is evident that although the GIA claims to be the unimpeachable source in the diamond industry worldwide, regarding examination of diamonds and issuance of certificates to reflect the characteristics of specific diamonds, there are no consistent criteria to examine diamonds even within the GIA itself.”

Yelazarov claim that:

“the findings that were discovered by tests they held in retrospect for the GIA, are severe and earth shattering for the whole diamond industry. If the end clients were to know that the GIA certificates are not exact and that there are variable criteria, they would no longer trust the GIA certificates. Yelazarov claim that throughout the past year, they collected evidence and terrifying findings, according to which the improper activity of GIA is documented.

“For example, in the month after the matter “exploded” and made so much noise, a number of diamond dealers submitted diamonds which they purchased from Yelazrov and which had been lowered in color grading, to be rechecked by the GIA, while concealing that the diamond was originally owned by the Yelazarov family. The results of the reexaminations were the raising of grading to the original grading prior to the publication.”

Yelazarov claim that:

“The GIA harmed their freedom of employment and ruined their business in the industry. Rappaport and GIA harmed the reputation and good name of the Yelazarov family and caused all the other diamond dealersto request the return of the diamonds in their possession which were originally owned by companies of individual Yelazarov members.”

A defense has yet to be submitted.



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