AP News, June 29th, 2007
Dozens of New York City diamond dealers filed a lawsuit Thursday accusing a father-and-son company of stealing nearly $3.4 million worth of gems entrusted to them.
Shalom S. Taub and son Alfred Avi Taub, 28, ran A. Taub Diamond Corp. from April 2006 until earlier this month, when they abandoned their office in Manhattan's diamond district and vanished, according to the lawsuit.
The Taubs took with them millions of dollars in diamonds they received on consignment, court papers say. They got them by carefully building trust in the industry during preceding year, the papers say.
From April 11 to May 31, 2007, the Taubs and an associate inked 70 consignment memos with 45 dealers, acquiring $3,358,409 in diamonds that were never returned, according to the lawsuit. The dealers say they lost individual amounts ranging from $18,000 to about $500,000.
Cindy Molloy, the plaintiffs' lawyer, said there are even more dealers victimized by the Taubs, but 45 are listed on the suit. She would not say whether police were investigating the dealers' complaints.
No one answered telephones at numbers listed for the Taubs. Molloy said she had been unable to contact them and did not know whether they have lawyers.
The custom in the diamond industry is for a seller to take stones from a wholesaler, for possible sale to a third party, after signing a consignment memo. The memo states that the seller who receives the gems is liable for them until he and the wholesaler agree on what will happen to them.
The lawsuit asks for a judgment of the cash value of the diamonds plus punitive damages "in an amount that would send a message to defendants that their conduct was unacceptable and morally reprehensible."
