It was February 2008, and a woman in Milan had complained to police about early-morning noise in her neighborhood. But there was a construction project going on nearby, and the police assumed the noise must be coming from there. No one thought much about the fact that the woman lived near the world-famous Damiani jewelry showroom until four masked thieves showed up in the store, apparently out of nowhere. The building was secure, with a high-tech alarm system and an armed guard at the front door. None of that really mattered, though, since the thieves had been drilling a hole every morning through the four-foot wall that separated the showroom basement from the basement next door.
The timing was nearly perfect. Damiani had been preparing for a private showing, so there were no customers in the showroom but enough staff on hand to open the vault. The thieves were in and out in half an hour, making off with millions of dollars worth of diamond jewelry. But why was the heist just nearly perfect? They would have made off with much, much more had it not been February -- Oscar time. Some of the most valuable pieces were on loan to Hollywood's A-list stars, including Oscar winner Tilda Swinton, who wore Damiani's one-of-a-kind "Sahara Bracelet," bearing 1,865 diamonds totaling more than 47 carats, and the 4.21-carat "Mimosa Ring" [source: Reuters]. The thieves missed out on those, although such famous pieces probably would have been nearly impossible to unload.
Diamond thieves (or at least the ones who succeed) are smart. Stealing diamonds isn't like stealing cars. The security that protects high-value jewels is hard to bypass, even for the experts, and selling the booty is almost as difficult as stealing it.
In this article, we'll look at some of the largest and most famous diamond heists, including one in which the thief made off with $28 million in diamonds using nothing but charm. We'll talk about the smaller and more common types of diamond theft that seldom make it into the news. And we'll see what it takes the convert stolen diamonds into cash. How does someone sell a stolen 33-carat diamond, anyway?
In 1959, two men tried to do just that.
The Diamond Theft: Quick and Dirty
Vera Krupp never took her 33-carat diamond ring off her finger. The center stone was about the size of a marble. When two men broke into her ranch outside Las Vegas in 1959, they had to literally pry it off her finger, drawing blood.
Most diamonds thefts are far less glamorous than the 2008 Damiani raid (and far less brilliant). In 2005, two men stole a diamond from a mall jewelry store in Canada using the sleight-of-hand method. They asked to see a solitaire, and when the clerk turned her head, they switched it with a cubic zirconia. Mall security found the thieves attempting to do the same thing in another store at the same mall.
In another failed attempt at grand theft, a man in the United Kingdom pocketed a $16,000, 2-carat diamond ring from a jewelry store and got caught when he tried to sell the piece to another branch of the same store. The clerk called the cops while the guy waited patiently for her to weigh the ring in the back of the store.
Still, the most common methods of stealing diamonds often go unnoticed. There's a reason why lots of people insist on watching while a jeweler does repairs or resizes on valuable pieces: A jeweler can easily switch out a diamond for a cubic zirconia, or a perfect diamond for one that's flawed. A jeweler in Palm Beach went to jail in 2000 for switching out real diamonds for fakes when people came in for repairs. In all, he stole more than $80 million in jewels from a wide range of victims (including golfer Jack Nicklaus). However, unscrupulous jewelers can't steal anywhere near the number of diamonds as people working in diamond mines can.
All along the South African coast, workers regularly walk off with millions of dollars in rough (uncut) stones. As they pull diamonds from the churned-up seabed gravel, they'll check to see if guards are watching, and if not, they'll slip one or two under their fingernails. Later, when it's safe, they swallow them, insert them into an orifice or load them onto homing pigeons. One thief in Namaqualand got caught when a guard spotted a homing pigeon trying unsuccessfully to take off. The man had loaded so many diamonds into his bird's harness, it couldn't get off the ground [source: The Atlantic].
In the workrooms, where the floor is strewn with small diamonds, employees wear glue-soled boots and walk right out of the mine with -- yes -- diamonds on the soles of their shoes. De Beers, the diamond conglomerate that runs the largest legitimate operations in South Africa (not the conflict diamond operations run by South African rebel groups), randomly X-rays workers on their way out. Diamonds fluoresce when exposed to X-rays. But due to the of the risk of daily radiation exposure, De Beers can only scan randomly, so lots of those pocketed diamonds make it out mines and workrooms.
Theft from the mines is just part of life on the Diamond Coast. DeBeers spends millions of dollars every week buying stolen diamonds back so they don't flood the market and cause diamond prices to tank. They estimate that workers steal up to 30 percent of the mines' yield [source: The Atlantic]. In these mining towns, it's easy to sell a stolen diamond.
Even with hauls in the millions, it's not the quiet thefts that draw real attention. It's the big, glamorous heists -- ones where thieves walk off with bags of diamonds in a brilliant show of patience and planning. So, what's the most unbelievable diamond heist on the record books? Probably the one in which the thief charmed his way into the safe.
The Diamond Heist: Months in the Planning
Real-world diamond heists are surprisingly like the heists we see in the movies. And they're not nearly as rare as you might think.
The largest diamond heist ever went down in Antwerp, Belgium -- one of the world's diamond capitals. The Antwerp Diamond Center building houses 160 vaults in which diamond brokers leave their stones. In February 2003, 123 of those vaults were emptied of their contents by four people who had been planning the theft for at least two years. They rented office space in the building, analyzed the alarm system and learned how to bypass it, stole keys to the vault and made copies. On the day of the break-in, they recorded over all of the security cameras. They were later caught by Antwerp police, but the $100 million worth of diamonds and other gems they stole have never been found.
It's an impressive heist, no doubt. So what can top a $100 million diamond theft that bypassed one of the world's most comprehensive security systems and took two years of meticulous planning? One that didn't have to bypass security at all.
Diamond heists happen at least every few years. After all, diamonds are small, lightweight, valuable, and police dogs aren't going to smell them out at the airport. For the same reason, diamonds are protected by the best security systems available -- infrared sensors, "unbreakable" safes, guards with guns and phones that open a direct line to the police when they're lifted off the receiver. Antwerp even has special police patrolling the diamond center. But sometimes, the security doesn't help, especially when the thief is given keys to the vault.
No one knows his real name, but people at the ABN Amro bank in Antwerp's diamond center knew him as Carlos Hector Flomenbaum, a successful businessman who'd been frequenting the bank for at least a year. The bank's employees loved the guy. He brought them chocolates, chatted them up and was generally a friendly, charming and honest guy. At the diamond center's ABN Amro, trusted, top customers are given keys to the vault so they can access their diamonds at odd hours. "Flomenbaum" became one of these trusted key holders. Sometime between March 2 and March 5, 2007, he walked out of the bank with 120,000 carats of diamonds worth about $28 million.
The ABN Amro bank has a $2 million security system, but "Flomenbaum" never had to deal with it. He used his passcard to get into the vault, went straight for the area that housed uncut diamonds, and emptied five of the deposit boxes. Some experts said the bank shouldn't have had multiple security deposit boxes in an area that could be accessed by a single box holder with a keycard. Each person should only be able to get to his or her own box.
The Antwerp diamond district is obviously a major target, but there are others. In 2002, thieves got into a museum in The Hague that was hosting a diamond exhibit and left with millions of dollars worth of stones. No one knows how they did it, seeing as the exhibit had sensors and security cameras running 24 hours a day.
But the perfect crime often falls to pieces when thieves try to unload their stolen gems. That's how the not-so-graceful diamond theft in 1959 ended. When one of the thieves tried to sell Vera Krupp's 33-carat diamond, the FBI knew about it immediately.
Selling the Rock
In 1959, the FBI didn't just recover Vera Krupp's huge, recognizable center stone; they also recovered the small side stones. There's a network that traces the buying and selling of diamonds -- especially cut stones -- around the world.
Diamonds aren't easy to sell -- even when you actually own them. Jewelry stores will almost never buy back diamonds they've sold to people, mostly because the price they'd offer would reveal the unfathomable retail mark-up on the stones. When Elizabeth Taylor tried to sell a 79-carat diamond ring, she got half the price she asked. It had been a gift from her two-time husband Richard Burton, and when she married John Warner in 1979, she put it up for auction for $4 million. There were no takers. She eventually sold it for $2 million and barely broke even on the cost of insuring it all those years. Incidentally, Liz Taylor also ended up with Vera Krupp's diamond ring, another gift from Richard Burton. And she still owns it today [source: The Age].
So imagine what's it's like to try to sell a stolen diamond with no accompanying papers. There are unscrupulous jewelers and individuals out there who are willing to buy stolen gems. And there are enough of them to make a professional heist worth the risk. But the thieves had better identify the buyers beforehand, as shopping the jewels around is likely to get them caught. If "Flomenbaum" ever tries to sell, say, the 133-carat uncut stone he stole from ABN Amro, he'll be facing an uphill battle. John William Hagenson was caught trying to sell a mere 33-carat stone.
Hagenson's the thief who ripped the ring off Vera Krupp's finger in 1959, and the FBI tracked him from Las Vegas to Louisiana. They actually knew who they were looking for: Hagenson had committed a very similar crime in California. And after they found Hagenson, they found the diamond, too -- in New Jersey. The FBI has informants in the diamond trade, and one tipped off the Newark field office when a 33-carat stone turned up for sale. The FBI recovered the side stones from a jeweler in St. Louis. Krupp was able to put her whole ring back together.
While a 33-carat diamond isn't something you see every day, surely there's more than one in the world. So how'd the cops know it belonged to Krupp? Find out in the next section.
Recovering the Loot
It's pretty amazing how diamonds are recovered. There's a worldwide network that relies on two basic principles to get diamonds back to their owners. First, diamonds are uniquely identifiable. Second, it's in almost everyone's best interest to recover a stolen gem. The latter is easy to understand in terms of insurance. It costs an absolute fortune to insure diamonds. Liz Taylor's 69.42-carat ring originally belonged to publishing heiress Harriet Annenberg Ames, who put it up for sale because it was costing her $30,000 a year just to keep the thing in her safe -- and that was in the 1960s [source: Edward Jay Epstein]. Insurance companies stand to lose millions of dollars when a diamond is never found, and everyone's premiums go up as a result. Plus, jewelers rely on their name to make the big sales. Trust is essential in the business. If a jeweler receives a stolen diamond and gets a bad reputation in the industry, his or her sales will suffer.
The recovery network is huge. The diamond business is a small world that spans the globe. TV shows often show the police sending out bulletins to pawnshops when jewelry is stolen. This is real, except the news goes out to everyone in the diamond world -- jewelers, pawnshops, diamond traders, diamond cutters and anyone else who might come into contact with a stolen stone.
Buying stolen gems can also be a serious crime. It's not like a pawn shop owner accepting a stolen TV set. Plus, without a certificate of authenticity to prove the diamond is not from a conflict area like Sierra Leone (a "conflict diamond" or "blood diamond"), it's too great a risk for a jeweler to have it in his or her collection. People caught trading in blood diamonds face significant legal ramifications.
Stolen diamonds can also be positively identified. There are characteristics of each diamond that are entirely unique, and people have come up with various ways to record these characteristics. When you get a diamond certified, that's what you're doing -- subjecting the stone to a series of tests that can identify it. A few of the tests that can identify a diamond include [source: Patent Storm]:
- Shooting a laser beam into the stone: This creates a specific optical response that is recorded. It's that diamond's fingerprint, so to speak.
- Hitting the stone with X-rays: Each diamond responds to X-ray beams -- reflecting and refracting them -- in a unique way. This creates an optical fingerprint as well.
- Etching a number into it: A laser beam can etch a tiny identification number into a stone in a way that does not show unless you're looking for it with a high-magnification lens.
If a jeweler switches out your stone while doing repairs, these tests can let you know that the diamond in your ring after the repair is not the same one that you took in. If your ring is stolen and it turns up at a jewelry store, this certification tells police whose diamond it is.
Even when no one calls the police, and a diamond thief is successful in selling the loot, it's seldom much of a success. While one must assume that some big-time thieves have black market connections that will let them sell a huge diamond for huge payback, most thieves have to settle for the small-time fences (receivers of stolen goods) that pay nowhere near what a diamond is really worth. In 1979, when New York City police recovered $50,000 worth of stolen diamonds from a fence, it turned out he'd paid the thief $200 for the stones. And the thief was turned in by one of the many jewelers he'd approached when he was looking for a buyer. For your everyday thief, stealing a diamond hardly seems worth the effort.
To learn more about diamonds and thieves, look over the links on the next page.
Related HowStuffWorks Articles
More Great Links
- Barry, Colleen. Milan Thieves Make Off With Jewels. ABC News (AP). Feb. 27, 2008. http://abcnews.go.com/International/wireStory?id=4354511
- Brown, Katie. Two charged in diamond theft. Bismarck Tribune. Oct. 4, 2005. http://www.bismarcktribune.com/articles/2005/10/04/news/local/103162.txt
- Diamond theft haul worth 100M. CNN.com. Feb. 28, 2003. http://www.cnn.com/2003/WORLD/europe/02/27/belgium.diamonds.ap/
- Castle, Stephen. Thief woos bank staff with chocolates - then steals diamonds worth £14m. The Independent. March 18, 2007. http://www.independent.co.uk/news/europe/thief-woos-bank-staff-with- chocolates--then-steals-diamonds-worth-16314m-440755.html
- Cowen, Mark. Diamond thief's not a sparkling intellect. icBirmingham. Oct. 4, 2006. http://icbirmingham.icnetwork.co.uk/0100news/0100localnews/ tm_headline=diamond-thief-s-not-a-sparkling-intellect&method=full&objectid=17868497&siteid=50002-name_page.html
- Epstein, Edward J. Have you ever tried to sell a diamond? The Diamond Invention. http://www.edwardjayepstein.com/diamond/chap20.htm
- Farah, Douglas. Al Qaeda Cash Tied to Diamond Trade. The Washington Post. Nov. 2, 2001. http://www.washingtonpost.com/ac2/wp-dyn/A27281-2001Nov1
- Hart, Matthew. How to Steal a Diamond. The Atlantic. March 1999. http://www.theatlantic.com/doc/199903/steal-diamond
- Jeweler Steals From the Rich. About.com. http://jewelrymaking.about.com/library/weekly/aa022800.htm
- The Case of the Disappearing Diamond. FBI.gov. Nov. 17, 2006. http://www.fbi.gov/page2/nov06/diamond_byte111706.htm
- Thieves make off with diamonds worth millions. The Society of Mineral Museum Professionals (AP). Dec. 2, 2002. http://www.agiweb.org/smmp/museon.htm
- "Tilda Swinton, Nominated for an Academy Award in the Best Actress in a Supporting..." Reuters. February 24, 2008. http://www.reuters.com/article/pressRelease/idUS17305+ 25-Feb-2008+PRN20080225
- Belgium Hunting Suspect in $28 Million Diamond Theft. Bloomberg.com. March 12, 2007. http://www.bloomberg.com/apps/news?pid=20601085 &sid=agKMLbpRLleI&refer=europe