Diamonds are a girl's best friend, a guy's biggest splurge and the timeless symbol of priceless love. But what if the diamond you dreamed of and saved for wasn't nearly as valuable as you were led to believe?
The Channel 4 I-Team went undercover at Genesis Diamonds, perhaps the best-known jewelry store in Nashville.
We also talked to multiple jewelers, several customers and even some former employees who all told us similar stories of diamonds with paperwork that they say exaggerates their quality.
But Genesis says the competition is jealous and making something out of nothing.
"When someone is deliberately offering one thing and giving another, I just don't think it's fair. It's not right," said gemologist Van McMinn.
"It's not just the little diamonds. The medium diamonds, the large diamonds - it's everything," said jeweler Rodney Lunn. "Genesis is basically changing the diamond market and the landscape in Nashville and not for the good."
To understand what's happening, you'll need a quick lesson in how diamonds are evaluated and who does it. It's a bit of an alphabet soup.
The oldest laboratory - the one that invented letter grades for diamonds - is the Gemological Institute of America, or GIA.
It has competition from a bunch of other diamond labs, most notably EGL, which stands for European Gemological Laboratory even though it's located here in the United States.
But this is where it begins to get tricky. There's more than one EGL lab.
EGL International may have the same initials, but experts say it has very different diamond standards: Lower standards.
Genesis says fewer than 25 percent of the thousands of diamonds it sells are graded by that lab. But we've been told by others that most of the stones sold by Genesis at what it calls "the guaranteed best prices in America" are diamonds certified by EGL International.
"Any time I see an EGL Israel or EGL International report, my heart sinks," McMinn said.
"The value written on the paper is not the value of what you're really getting. That's a huge discrepancy," Lunn said. "I've seen astonishment. I've had people call me a liar because they think I'm trying to somehow bash what they bought."
And that's what these jewelers are saying customers are seeing when they go to resell their rings for the prices they expect.
Their paperwork tells the tale, including one Nashville customer who, after a divorce, wanted to sell her ring.
Genesis told her to insure it for nearly $48,000 though she had paid a lot less, and she considered that a terrific deal.
The EGL International certificate gave the diamond a color grade of H and the clarity VS1 for "very slightly included."
But a GIA educated jeweler with 40 years experience rated the same 2 1/2 carat diamond an L color. That's four grades worse with clarity two grades worse.
He offered the customer no more than $12,000 for the ring and wedding bands, and the woman eventually sold it at a loss out of state online.
"Keep in mind, diamonds are subjective," said Genesis Diamonds owner Boaz Ramon. "There is no argument when you take a diamond from a certain lab, and you send this same diamond to a different lab, you'll get different results. But, in the end, it's all reflected in the price for the consumer."
Another woman needed money and decided to sell her 2 carat Genesis ring. She paid more than $13,000 for it, but the store said it would cost nearly $30,000 to replace it.
EGL International had certified the color as an I, but when the most experienced gem expert in Nashville took a careful look, he gave it a color grade five marks lower.
He estimated the replacement cost at $10,900, about 1/3 of what Genesis said to insure it for.
"It's not any obligation, you know, to buy back the diamond for what we appraised the diamond for," Ramon said.
Bob Forster, a professional diamond buyer and second-generation jeweler took perhaps the boldest step.
He bought two diamonds from Genesis himself, spending more than $13,000, and then sent both EGL International stones to three different labs.
"We sent this diamond to a GIA for certification," Forster said. "It came back a K color, as opposed to a G. So you got G, H, I, J, K: four color grades lower. And it came back as a VS2 instead of a VS1. So you've got four color grades and one clarity grade."
The second even bigger diamond that Genesis sold Forster as a D color - the very best - came back from all three labs with the same big discrepancy.
"GIA graded it as a G color. So you've got D, E, F, G. So you got three color grades difference," Forster said. "That is a tremendous difference."
But customers may not know that difference.
Back at Genesis, at least one dissatisfied consumer was told there was only one difference separating GIA stones from EGL International: The price.
A Genesis employee is seen telling an undercover customer that if the diamond at which they were looking had been graded by the GIA, it would have been $5,500 rather than its listed price of $3,600 after being graded by EGL International.
"They think they're comparing apples to apples. They think they're getting a great deal," Forster said. "It's not the same thing. We've made the analogy before: If you went into a steakhouse and they said, 'We've got the ribeye on sale for $10.' [You say] 'Wow, I'll get the ribeye.' And a few minutes later, your food comes out, and it's a big hamburger."
"They say you're selling apples that are really lemons," Channel 4 I-Team reporter Demetria Kalodimos said to Ramon, the Genesis Diamonds owner.
"Who are the complaints coming from? The competitors," Ramon said.
Forster says, according to what is the commonly accepted diamond-pricing guide, those two Genesis stones were overrated and overvalued by 86 and 92 percent.
"Is that diamond ever a 'G' on anyone's scale?" Kalodimos asked.
"No way. No way," Forster said.
So, what does Genesis say about this?
"What Mr. Forster did, he was focused on one certain color and clarity that, on this color and clarity, you see the huge difference. And that was his point," Ramon said.
"We've got four color grades' difference here," Kalodimos said to Ramon.
"If you send it to another one, you can get seven, you can get two," Ramon said.
Now, Ramon says he's turned the tables, sending a man to buy a certain kind of diamond at Forster's store.
"It was only a 3/4 of a carat cushion," Ramon said. "We have maybe 300 or 400. His store has only one."
The cost was $3,400 for a diamond graded by EGL USA. Three jewelers told the Channel 4 I-Team that price was high.
Ramon says you can buy that stone at his store for less.
"A better grading report, a better cut for $1779.62," Ramon said.
But is the diamond Ramon bought from Forster exaggerated when it comes to color and clarity? Remember, that's been a persistent complaint against Genesis Diamonds.
"The certification, the color and clarity is not in question correct?" Kalodimos asked Ramon.
"Yes, it's in question. If you send this to GIA, it won't come out 'I' color and VS2," Ramon said.
"Did you send it out?" Kalodimos asked.
"No, I didn't have to send it out, but that's what I do for a living," Ramon said. "We have 40,000 happy, satisfied, loyal customers. No complaints."
It bears repeating that all diamond grading for color and clarity is done at every laboratory not with machines but by the human eye.
The Tennessee attorney general's office has reached out to Channel 4 News, asking that anyone having problems contact the state Division of Consumer Affairs.
Our newsroom has also had a lot of calls and emails from people wanting to know what to do about their diamonds. If you feel the need to get a second opinion, the most reliable information would come from a graduate gemologist, and there are several of those in Nashville.
Note: Genesis Diamonds has no affiliation with leading lab-grown diamond distributor Gemesis Diamond Company.
Copyright 2014 WSMV (Meredith Corporation). All rights reserved.
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