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Tarnished integrity

January 9, 2018

 Money Metals Exchange® recently had an article on "Tradable Rare Diamonds for Investment" 

 

The packaging is impressive, the videos are alluring and enticing and everything seems so legitimate.  There is even a video with past Gemological Institute of America (GIA) president Bill Boyajian touting the ingenuity and commodification by Joseph Lipton and his American Diamond Mint.  

 

What could tarnish the integrity of investment diamonds?

 

Joseph Lipton, CEO of Secured Worldwide, VULT
Found to have Committed Fraud (sentstrats.com)

 

New York, NY — January 15, 2017 

The case is SDNY:15-cv-1761.

 

Ruling by McMahon, District Court Chief Judge, SDNY: Joseph Lipton, CEO of Secured Worldwide, the diamond technology company behind "VULT," committed Fraud. Kinney’s patent assignment is reversed, and damages are awarded. Lipton is prohibited from competing. Secured Worldwide, valued by investors at $50 million, cannot continue without license.

A Federal Court has found that New York property developer, Arthur “Joseph” Lipton committed fraud. Lipton is founder and CEO of Secured wide, LLC, a diamond technology company, and partner, with Extell Development Company, in the International Gem Tower on 47th Street. Lipton has been a long-time developer, landlord and investment-gem trader in New York’s diamond district.

 

In the text of the description of this investment product, Vult says that they use "GIA certified" diamonds and the verification app even uses the terminology "GIA certificate" for the report number.  Professionals in the jewelry industry know that these documents are reports and not certificates.  The GIA knows that they are reports and that they do not certify in the sense that the general population believes that term mean, which is to, "stand unequivocally behind" their findings.  Isn't that why Mr. Boyajian resigned from GIA?

 

 

The GIA needs to have the courage to require the industry to use the terminology for their documents correctly.  When we start using diamonds as a commodity the public has a perception that when you certify something you are guaranteeing the dollar value of that item.  The GIA does not give a value on their reports and they only certify that gemologists have graded the gems.

 

Mr. Lipton labels himself an "Asset Innovator" and his new Vult system utilizes a collection of "investment grade" diamonds to negate the percent of market subjectivity that would impact the value of each packet.  It's patented security package with microspheres, electronic chips, ceramics and sapphire glass is about as much smoke and mirrors as one can get in a supposed diamond investment trade scheme.  The only transparency may be in the diamonds themselves.

 

The Money Metals Exchange actually labels this as, "Investment Grade Diamond Bullion" and goes on to say that it, "Will trade alongside precious metals on Public Exchanges ."  We have seen similar things like this before without a good ending.  

 

In my humble opinion, if the players in this investment option have less then Sterling behaviors in the industry, then their products cannot help but tarnish the industry in some way.

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