20 Sep 2019
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Whose Mistake Is It Anyway?
GIA Report Tampering- Frauds exist as long as opportunities exist. They are rampant since the times unknown.
By: Diamond World News Service
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Jan 5 2016 4:55PM
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Reference: 12514  

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But what surprises is what length a fraudster goes to fulfill his or her means? That, too, putting someone else’s reputation at stake. Here, in case of Gemological Institute of America (GIA) reports being hacked at the behest of third parties has put the ‘Trust’ factor under scanner. Diamond industry is synonymous with ‘Trust’. But such fraudulent activities keep putting the question mark on the authenticity and realness of the industry as a whole. It brings a lot of questions in the minds of a buyer. Should I be buying diamonds? Is the diamond certification the final word on authenticity of a diamond? You all have read about the tampering of the reports but here in this month’s Cover Story, read about Why’s and What’s of this fraud by Kavita Parab and Puja Kumar.

‘It takes years to build trust and but seconds to shatter and forever to reinstate it,’ goes the saying and it stands true in the wake of events troubling the diamond industry since October 2015. In a shocking revelation, on 23rd October 2015, GIA announced that they have invalidated grading reports for 1,042 diamonds submitted primarily to their grading laboratory in India. An outside party who gained unauthorised remote access to GIA’s grading information database altered the reports. The alteration was reportedly done of low grade diamonds to make them of a higher grade.

Here, we would like our readers to focus on – alteration of reports was done of low grade diamonds make them higher grade. Colour is the 2nd most important characteristic of diamond quality.Though most people find it difficult to tell the difference between one colour grade to the other, the price difference between the two can be significant. Considering 1-carat VVS1-I XXX, SL round cut diamond costs around U.S. $4000 and 1-carat VVS1-G XXX, M round cut diamond costs U.S. $ 6000. So in case, one gets the colour enhance from I to G, the person makes clear profit of U.S. $2000. Couldn’t it be tempting? Of course, it would be if one is presented with an opportunity to get the report altered before they are printed. And, get a valid report for false grade and earn big money.
But a lie has no life and is bound to meet its own death. In this case, GIA and Tata Consultancy Services (TCS) discovered the unauthorised access and the fraudulent alteration of grading reports based on discrepancies in grading information identified by internal controls.Based on discrepancies in grading information identified by internal controls, GIA initiated an investigation in conjunction with TCS, the contractor that supports GIA databases. The investigation revealed that an outside party altered grading information for 1,042 diamonds examined by GIA. The investigation indicates that one or more former employees of TCS made these unauthorised changes. The individuals, acting at the behest of other parties unrelated to GIA or TCS, gained unauthorised remote access to alter grades before reports were printed and sent to clients.GIA and TCS made the results of their investigation known to law enforcement agencies in India that are actively investigating the matter.Two former employees of TCS were arrested.

Current Status

GIA continues to work closely with its database support contractor TCS and the Indian police to further the investigation of this fraud against the trade.On 24thNovember 2015, GIA announced a no-cost confirmation service for or any diamond grading report originally issued from November 2014 through October 2015. Anyone with a GIA grading report originally issued in that timeframe who is concerned about the accuracy of the report may submit the original report and the referenced diamond to any GIA location for a confirmation service at no charge. The no-cost confirmation service will be available until 30th January 2016. The diamond and original report must be submitted together using the service name ‘confirmation service’ to obtain the no-fee invoice.
GIA has also announced that it will share information about the investigation that arises.

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