Flawless Page 10
Historically, De Beers hoarded its rough diamonds in a vault in London. They came from mines in South Africa, Botswana, and Namibia, among others. De Beers’s agents also patrolled independent selling markets in West Africa, including Liberia, Ghana, Angola, and Sierra Leone, among others, to snatch up diamonds that came from mines it did not control. Those too went into the stockpile.
In London, the rough diamonds were sorted, valuated, and then sold by the DTC and its predecessors in amounts that were carefully calibrated to market conditions to a small group of preferred customers. The number of these customers fluctuated over the years. but were generally between one hundred and two hundred. The sales took place every five weeks.
The sales were called Sights—and the customers, Sightholders—but the name was misleading because the diamond purchases were arranged in advance, sight unseen. For the Sightholder, this was far from ideal. There were occasions when a Sight parcel was a disappointment considering the price paid. On others, however, Sightholders would be rewarded with a box filled with what were called “specials,” large diamonds that could be cut into several smaller ones. This system allowed De Beers to exercise a degree of control over those it did business with by rewarding them with specials or penalizing them with less than stellar boxes.
Although it was geared to favor De Beers, the system nevertheless made many people extremely wealthy. Diamantaires may have legitimately complained that De Beers treated them unfairly, but they couldn’t complain much about the industry De Beers had fashioned. The product they sold was artificially overvalued, but De Beers itself ensured throughout most of its existence that demand for it remained high with its unrivaled marketing clout. In short, De Beers transformed diamonds into the most treasured and valued gemstone throughout the world, and ensured that those who sold it became, by and large, immensely wealthy.
But it’s precisely because of the artificial value De Beers has bestowed on diamonds that they are targeted, as they have been throughout history, by bandits and thieves. Their small size and their portability can be both a blessing and a curse for diamantaires: a blessing because getting into the business requires very little investment in infrastructure compared with other valuable commodities like oil or timber, and a curse because the same small size allows them to be pocketed, or even swallowed. Because it’s possible to ingest millions of dollars’ worth of diamonds, theft becomes difficult to detect.
To combat the ease of theft, De Beers has developed increasingly stringent antitheft measures at its mines. In the days of Rhodes, the process diggers used to steal diamonds was as simple as waiting until the foreman looked the other way before pocketing or swallowing the stones rather than handing them over. Modern mining companies have all but eliminated the chance of theft in this manner. At kimberlite pit mines, gangs of men with pickaxes and shovels have been replaced by heavy machinery that excavates dirt by the ton. The dirt is no longer sorted by hand, with miners’ trained eyes picking out the diamonds from the quartz; these days, mechanically crushed rock is sifted along a conveyor belt that winds through a recovery plant. X-rays illuminate the diamonds amid the rubble, triggering little tubes along the belt that puff out quick bursts of air as the diamond goes by, blowing it into a bin. The rest of the soil is loaded into dump trucks and scattered back on the ground.
The problem of theft remains high, though, with deposits where the diamonds are scattered throughout the soil on the ground. In these enormous areas, diamonds have been scattered by eons of wind, rain, glaciers, and shifting soil. There is no cost-effective way to excavate an entire region of a country, so mining here requires that humans look for the diamonds. As a result, the potential for theft skyrockets.
Take, for example, De Beers’s operation in Namibia, where the huge stretch of alluvial deposits was located on the coast, an environment that caused them the most grief over the years in terms of theft. Once known as the “forbidden territory,” the sands and sea of Namibia’s Diamond Area 1 were the source of some of the highest-quality diamonds to be found, but because of the landscape and its access by sea, it was also one of the hardest to secure. The company ringed the area with high barbed wire fences and private security guards armed with rifles. Workers were subjected to full body searches that included random and frequent scans with low-dose X-ray machines. All employees had computerized security badges that tracked their movements through the compound; some were even required to live there in on-site dorms for up to six months at a time. That way, they only had to be searched via X-ray once in that period of time, on their way out. De Beers even instituted a policy of keeping machinery in the area permanently, a response to the discovery that one ingenious worker had smuggled diamonds out in the hollow bolts of his car. From that point forward anything that entered the diamond complex’s perimeter stayed there until it rusted away.
As resolved as De Beers was to hold onto each and every diamond discovered in Diamond Area 1, criminals were equally determined to steal them. One man swallowed 51 stones worth $2.5 million before X-rays revealed a small mountain of gumball-sized diamonds in his stomach. Some miners tied small leather bags filled with diamonds to the feet of homing pigeons to fly them out of the mining compound. It was a good plan, but one of the men spoiled it for the rest by being overzealous; he loading his bird with so many diamonds that it couldn’t fly over the fence. Guards found the poor creature flapping futilely on the ground, relieved it of the diamonds, and released it. Since the pigeon was trained to return to its coop, they followed it to its owner’s house, where he was arrested. Guards were subsequently ordered to shoot pigeons on sight.
Still other thieves filled the hollow shafts of crossbow bolts with diamonds. That anyone could smuggle a crossbow inside is itself a testament to the thieves’ ingenuity and determination. This method came to an abrupt end, however, when an errant bolt heavy with stolen diamonds punctured the tire of a jeep doing a security sweep of the perimeter.
While diamond mines provided temptation to thieves, Antwerp had much more than the occasional diamond to offer them.
It was obvious from the start that diamonds were only one form of wealth in abundance in the district. The Diamond Square Mile was also home to numerous jewelry designers and was, therefore, awash in gold, platinum, titanium, and silver. Some of the best names in fashion, including Cartier, TAG Heuer, Rolex, Tiffany, and Harry Winston, had a presence and employed private designers to fashion jewelry, watches, and accessories in which to embed diamonds. Businesses that specialized in precious stones other than diamonds—including rubies, emeralds, sapphires, tanzanite, tourmaline, opals, and onyx, among many others—were found throughout the streets surrounding the district. Given that many businesses had been handed down through the generations, Notarbartolo suspected that some safe boxes might contain ancient treasures that he could only guess at—priceless Roman coins, maybe, or royal jewels. And of course there was no shortage of cold hard cash circulating through the district’s offices and banks.
But it was diamonds, both rough and polished, that all but paved the streets in Antwerp. That was especially the case once every five weeks, after the most important diamond sales in the world, the De Beers Sights, which ranged in value anywhere from $500 million to $700 million. The vast majority of the stones came to Antwerp to be quickly resold by the Sightholders to the companies that cut and polished them into the precious gems displayed in retail stores around the world. And so, every five weeks, Antwerp swelled with diamonds like a mountain stream filled with spring runoff.
Rough diamonds may be interesting, but polished diamonds are spectacular. Because of their unique molecular composition and clear white color, diamonds can be cut and polished in a way that they refract light like no other gemstone, causing them to sparkle with all the colors of the spectrum. The more it sparkles, the more a diamond is said to have “brilliance.” And the greater a stone’s brilliance, the higher its value.
A dealer in rough stones needs to be able to imagi
ne what polished diamond or diamonds lay within a given stone. Often a lesser cut is required in order to maximize the size of the polished diamond or to accommodate an irregularly shaped piece of rough. Cutters spend most of their time carefully analyzing diamonds with computers and with strong magnifying loupes to figure out where to cut. Internal flaws usually dictate this; if the diamond is fractured inside, it can explode if it’s cut in the wrong place, turning a once-precious piece of rough into worthless fragments. The location of a diamond’s first cut, called the “cleave cut,” is marked on its surface with a black marker.
Throughout the Diamond District and on the streets surrounding it, cutting factories specialize in this important but not so glamorous work. Long tables are filled with diamond saws reminiscent of machines from a Dr. Seuss book. Rough diamonds are clamped in a vise, and a circular saw blade dusted with diamond powder is lined up with the black mark on a diamond for the precious stone’s first cut.
Because diamonds are so hard, the process of making the first cut can take weeks. The saws run around the clock and they’re carefully watched. The cutters recognize when a diamond is almost cleaved by the sound a saw makes. When the saws start emitting a barely audible, high-pitched whine, the cutter knows to watch them carefully—because of the pressure of the vise, the diamonds can pop out and ricochet around the room once they’re cut.
From there, the diamonds are buffed in a special machine before being handed to the polishers. Each of these men spends his days hunched over a diamond-dusted grinding wheel, perfecting a diamond’s facets down to fractions of a millimeter, following instructions scrawled by the owner on the small paper the diamonds were delivered in. The machinery looks like what you’d expect to see in an auto garage, greasy and smudged from years of heavy use, but from it the polishers coax some of the most beautiful diamonds in the world. Because of all the grinding and polishing, the finished product can be up to half the carat weight than when it was a rough stone.
The diamantaires are consulted frequently along each of these manufacturing steps to ensure that their specifications are being met. It can take dozens of visits to the polishing houses to get a stone just right. Once they are perfect, diamonds are usually taken to a certification company in the Diamond Square Mile, laboratories that analyze a diamond and verify its four Cs: carat, color, clarity, and cut.
This process is the equivalent of having a car inspected before it’s driven off the lot. Once it’s verified as being a real diamond—an important first step since it’s not always easy to tell the difference between a diamond and a cubic zirconia, even for professionals—the stone is graded in each of the four categories. “Carat” refers to a diamond’s weight; “color” is a measurement of the yellow or brown hue all white diamonds have, the less the better in terms of value; “clarity” is a grade based on the number and size of a diamond’s internal flaws; and “cut” is an evaluation of its shape, symmetry, and finishing qualities.
Throughout most of the history of diamond trading in Antwerp, buyers and sellers agreed on the four Cs after much haggling in the bourses’ trading rooms or in the cafés on Pelikaanstraat. If you could convince a seller that his diamond was more of an F in color than a D—the scale goes from D, which is perfect white, to Z, which has a light yellow or brown tint—then you could probably knock a few thousand off the asking price.
The HRD (Diamond High Council) began offering uniform certificates in 1976 that were quickly adopted as the industry standard. When the certification is complete, the diamonds are individually sealed in numbered, plastic blister packs about the size of a typical business card. A certificate is issued that corresponds to the assigned number; it features a wealth of information about the diamond, including the four Cs. Diamonds with certificates are easier to sell as the buyer no longer requires a lifetime of expertise to judge a loose, polished diamond. With the certificate, he knows what he is getting, and this enables deals to be done over the Internet without the buyer even seeing the stone.
Although the certificates are numbered, the number can only be traced to the person who requested the certificate in the first place. Since diamonds change hands so frequently throughout the day, the numbers are almost always meaningless to someone hoping to prove a diamond’s ownership. In practically all situations, a buyer would never think to ask a seller to prove a diamond’s chain of custody; what’s important from the buyer’s point of view is the certificate, which allows him to accept a diamond’s merits at face value so they can quickly move on to the one thing that matters most, the price.
Still, if a thief prefers not to take the slim chance that the certificate might be traced, he can use the information on the package to order minor adjustments that will remove any trace of its former identity. If a certificate says a diamond weighs 1.02 carats, the thief could take the stone to a polisher and ask him to grind off one one-hundredth of a carat. Then, for only 75, the diamond can be certified again, this time as a 1.01-carat diamond.
It would be slightly less valuable than it was previously—perhaps by a few hundred dollars—but what was even more valuable to the thief was that, to the rest of the world, it would be a completely different stone, legitimized with its own unique certificate. A stolen diamond going through that process is gone for good, because there is then no way at all for a former owner to prove it was once his.
Detective Patrick Peys knew this as well as Leonardo Notarbartolo. This was why diamonds were rarely recovered after a heist. If the detectives were provided with a detailed list of what had been stolen, complete with certificate numbers, they would have to solve the crime and catch the thief before he had a chance to have the diamonds reworked or even removed from the blister packages. You couldn’t always count on the accomplices confessing to a rabbi.
Flawless
Chapter Five
THE PLAN
“Obviously crime pays, or there’d be no crime.”
—G. Gordon Liddy
When Notarbartolo’s watch showed that it was just a few minutes before 7:00 p.m., he picked up his attaché case, locked his office door, and headed to the elevator. It was nearly the end of the business day at the Diamond Center, but Notarbartolo wasn’t quite done with his work. He pushed the elevator button for -2, and disembarked moments later in the echo-chamber foyer on the vault level. He paused for a moment at the locked day gate, waiting for the guard upstairs to buzz him into the safe room. Once inside, he walked directly to his safe deposit box and opened it. He took nothing out and put nothing in. His mission was simply to stand there pretending to be occupied with its contents until the concierge came to lock the vault door for the night. Notarbartolo wanted to see exactly how it was done.
An end-of-day trip to the vault such as this was one of a few theories detectives later would have on how Notarbartolo was able to learn about the nightly locking procedure. It was one of the least suspicious ways to gather information because it wouldn’t have been odd for the concierge to find someone still in the vault at closing time. Sometimes there was a last-minute scramble as diamantaires gathered the goods they’d been working with during the day to place them in their safe boxes before the big door was shut. But most of the men doing legitimate business quickly wrapped up what they were doing when Jorge or Jacques exited the elevator and announced it was time to leave. Not so for Notarbartolo; this was showtime for him. As with Boost, his goal was to get information without his mark knowing he was giving it. And so Notarbartolo did whatever he could to linger in the foyer as the lights in the vault were turned off and the day gate was pulled tight.
The giant vault door closed with a definitive boom, and the wheel operating its massive bolts was turned to anchor them in place. Using the keypad next to the door, the concierge armed the sensors protecting the room and then unlocked a plain door to the left of the vault. Inside were some paint cans as well as the stock of water bottles used to refill water coolers on the upper levels. This was clearly a storage room. Notarbartolo wo
uld have assumed the concierge stored the long key-pipe there while slipping the detachable stamp safely into his pocket, as basic security precautions dictated that the stamp and the stem be safeguarded separately. The concierge locked the storage room and turned off the foyer lights as he and Notarbartolo got in the elevator and took it up to the ground floor.
At 7:00 p.m., the staff on the main level prepared to seal the building for the night. Notarbartolo headed for the entrance in no particular hurry; information was rushing at him and he wanted time to capture as much of it as he could. In the control room, the guards were turning off video monitors. Notarbartolo was thrilled to see that, as they prepared the security system for the night, they swapped fresh cassette tapes for the full ones in the recording system; a VCR would be much easier to access than a computer’s hard drive.
Notarbartolo swiped through the turnstile. Though he was among the last who pushed through the plate glass doors, he lingered outside. He watched with studied nonchalance as, inside the entry foyer, a guard opened one of the glass doors and reached up to pull down a rolling garage-style door. It slammed to the ground with a rushing bang, followed by the distinct clacking of a lock being engaged. Notarbartolo assumed that the glass doors were also locked behind it.
He had watched this mundane ritual more than once so that he could be sure that what he saw was the standard operating procedure. While doing so, he was careful to spread out his observations so that no one would remember that he was often the last person in the vault.