Are Diamonds the Terrorists' Best Friends?
Aug. 25 -- — In the bustling heart of Midtown Manhattan's diamond district, where shop windows display a dazzling range of jewelry and shoppers vie for space with hurrying merchants and courier vans, a new worry is taking taking the shine off America's jewelry business.
Earlier this month, with curious merchants and sales staff looking on, FBI agents swooped into an office at the corner of 47th Street and Fifth Avenue, seizing documents, computer drives and arresting two men — Yehuda Abraham and Moinuddeen Ahmed Hameed — in the final, public phase of a massive anti-terrorism sting.
Hameed, an Indian based in Malaysia, and Abraham, the owner of Ambuy Gem Corp., were charged with arranging illegal money transfers for an alleged plot to smuggle surface-to-air missiles into the United States.
Earlier that day, U.S. officials had arrested Hemant Lakhani, a British citizen of Indian descent, in a New Jersey hotel for his involvement in the same alleged plot.
In the wake of the arrests, which the government hailed as a major victory in the war on terror, some experts questioned the sting's significance, calling it a government setup of small-fry operators, conducted with the help of a key cooperating witness seeking lenient treatment on federal drug charges.
But whatever the import of the sting itself, the fallout for America's gem trade and jewelry industry is potentially severe, casting as it does the dark cloud of money laundering and terrorism.
Old-Style Business Dealings
The U.S. gem trade is a thriving business in which dealers, designers, merchants and middlemen buy and sell diamonds, precious metals and gemstones (or colored stone in industry parlance). The industry runs the gamut from large companies to tens of thousands of small businesses catering to the vast American market.
More than 80 percent of America's diamonds at one time or another filter through New York's diamond district, where the real dealings are done in tight-security upstairs rooms, far from the prying eyes of sundry shoppers.
Concentrated in a single block on Manhattan's 47th Street between Fifth and Sixth Avenues, the diamond district is home to more than 2,500 independent businesses that traffic in the cutting, trading and selling of some of the world's most precious stones.
Dating back to around World War II, when Belgian Jews fleeing Nazi persecution set up businesses in a trade they were familiar with, the district has long been dominated by Jewish jewelers.
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