Daniel Katz of Australia has something to add to the GAAJ story -- their side:

Daniel Katz of Australia has something to add to the GAAJ story -- their side:

More to come but in the meantime this has been GAAJ official response:

On Tue, May 25, 2010 at 11:28 AM, Daniel Katz wrote:

GAAJ-ZENHOKYO

Sirs,

Please explain :

http://mdn.mainichi.jp/mdnnews/news/...na014000c.html

" Major gem company manipulated color standards to overestimate diamond quality

A leading gemology company engaged in diamond grading had deliberately overestimated diamond qualities by manipulating color evaluation standards, it has been learned.

The Gemological Association of All Japan (GAAJ) had been using the manipulated color standards between late February in 2007 and late October in 2008, affecting some 338,000 diamonds that were evaluated during the period, industry insiders told the Mainichi."

I would appreciate your quick reply

Daniel F Katz
www.DiamondImports.com.au

The Response

Dear Mr. Daniel Katz,

Thank you for your inquiry.

We are attaching the letter we sent to all our customers as response to the newspaper article.

We hope it will answer any questions raised after reading the article.

Please feel free to contact us if you have any more questions.

Sincerely yours,

Nadia Goldstein
Executive secretary
Nadia Goldstein
Zenhokyo Israel

The Letter

17th May 2010

To our customers,

Our view of MAINICHI Newspapers reports

Gemmological Association of All Japan Co.Ltd.
President Natsuki TAKAHASHI

On 15th and 16th May 2010, MAINICHI Newspapers reported that GAAJ-ZENHOKYO laboratory engaged company-wide in “manipulating colour standards to overestimate diamond quality”.

This press report is definitely not based on true facts. However, I
personally, as well as the company “Gemmological Association of All Japan Co. Ltd” are sincerely sorry for any inconvenience and anxiety that were caused to our customers- inconvenience and anxiety which were certainly not of our doing.

GAAJ-ZENHOKYO laboratory hereby announces that there is nothing fraudulent in our diamond grading, as publicised in the newspaper, and we have been, as always,performing fair grading at our laboratory.

We are determined to clarify the facts of the matter and will devote all our efforts to do it.

In Japan, diamond grading is performed based on the standards employed by GIA, and diamonds are evaluated on the so-called “4Cs” – cut, colour, clarity and carat.

Colour grading is performed based on the system using the masterstones approved by JJA/AGL, which was created by reference to GIA masterstones and was implemented in September 1996.

The system aims to prevent variations in colour grading among the
AGL (Association of Gemmological Laboratories Japan) members by letting the
members possess and properly operate the colour-masterstones, which are approved by Japan Jewellery Association (JJA) and AGL after consultation between them.

Diamonds are graded by highly experienced and trained expert graders.

However, there are always border stones (i.e. stones that are situated between one grade and the next).

Clarity and colour evaluation especially, cannot be quantified or mechanically gauged,so the grading results largely depend on the experience and subjective judgment of the grader.

GAAJ-ZENHOKYO laboratory holds regular meetings to match up individual
evaluation basis to eliminate variation between graders and branches.

The “direction” as described in the news report was a memorandum record of one of such regular meetings.

As it is, we had been receiving several comments that our results on colour gradingwere too strict compared to other gemmological laboratories belonging to AGL, whichraised our graders concern.

After an annual checking up session for diamond grading held by AGL, it was learned that the grading of GAAJ-ZENHOKYO laboratory traditionally tended to downgrade diamond colour that sat very close to the borders.

Atone of our regular meetings as mentioned above, we discussed correction of this tendency.

We systematically researched the trend of GIA or AGL member laboratories
on colour grading, and kept matching up and exchanging information between our expert graders.

As a result, we reached the conclusion that our grading determination on
borders should be slightly corrected, as stated in the in-house document.

The content of the memorandum therefore was summarised for our graders to show the correction range for those graders who tended to downgrade, in order to improve the operation of the approved masterstones with the border stones.

It was definitely not instruction to uniformly upgrade stones by half to one grade.

That regular meeting was held to eliminate variation on diamond grading between GAAJ-ZENHOKYO laboratory and other AGL members, in conformity with the approved masterstone system, and to seek consistent and uniform grading results between our expert graders.

Never did we aim to give “loose” or “favourable” grading results for our own interest as described in the news report.

Again please accept our sincere apologies for any inconvenience caused as a result of the news report.

We reaffirm our resolute stance against the report that is in no way based on true facts.

Meanwhile, we are making extreme efforts to prove the report as false and to restore confidence in the industry.

Your understanding is most truly appreciated.

Gemological Association of All Japan (GAAJ) appraisal company accused of overvaluing diamonds resigns from industry association

Update: May 23, 2010

Gem appraisal company accused of overvaluing diamonds resigns from industry association

AGL directors at a news conference following an emergency meeting on Friday in Tokyo's Taito Ward. (Mainichi)

The Mainichi Daily News, May 23, 2010

A leading gem appraisal company that is accused of deliberately overestimating the color qualities of diamonds has given up its membership in the national gem industry association responsible for setting diamond grading standards.

The company, called the Gemological Association of All Japan (GAAJ), submitted a request for termination of its membership, which was accepted at an emergency board of directors' meeting on Friday of the industry association, called the Association of Gemological Laboratories Japan (AGL).

The reasons given for the termination included "creation and leaking of an internal document of dubious content," in reference to guidelines for artificially bumping up the "color" ranks of diamonds in an alleged bid to increase their price.

During questioning by AGL directors, the GAAJ admitted to creating the document, which advised "correcting" color values of diamonds a half to a full grade closer to "transparent" than they should have been based on standards set in part by the AGL.

The AGL has decided to offer free re-appraisals on request for diamonds the GAAJ appraised from February 2007 to October 2008. A diamond's accompanying appraisal certificate should show a date within that range to be eligible. The AGL has requested the unique serial numbers of the relevant appraisal certificates from the GAAJ.

Link: http://mdn.mainichi.jp/mdnnews/news/20100522p2a00m0na005000c.html

Gemological Association of All Japan intentionally and fraudulently manipulated diamond color grades to over-estimate quality

Why am I posting this news article below?

I am so doing because I noticed that GAAJ was publishing -- excuse the expression -- crap about "paraíba" tourmalines, research reports (what a joke those were) about andesine, and other stones.

This article goes to the heart of that lab's total lack of credibility.

Major gem company (GAAJ) manipulated color standards to overestimate diamond quality

This chart shows how the GAAJ manipulated its color evaluation of diamonds, with the left column showing grades based on the industry's standard, while the arrows and the right column indicating the result of manipulated grades. The higher the grades are, the more clarity the diamonds have.

by The Mainichi Daily News, May 22, 2010

A leading gemology company engaged in diamond grading had deliberately overestimated diamond qualities by manipulating color evaluation standards, it has been learned.

The Gemological Association of All Japan (GAAJ) had been using the manipulated color standards between late February in 2007 and late October in 2008, affecting some 338,000 diamonds that were evaluated during the period, industry insiders told the Mainichi.

The Association of Gemological Laboratories Japan (AGL), which is responsible for the industry's uniform evaluation standards and to which GAAJ belongs, is poised to question GAAJ over the suspected manipulation at an early date.

The GAAJ, however, has refuted the allegations, saying, "We only rectified deviations of our in-house evaluation standards."

According to industry sources, the GAAJ discussed manipulating diamond color evaluation standards during a technical meeting at its Tokyo headquarters on Feb. 24, 2007. Two days later, the association's board officially decided to go ahead with the manipulation so that color evaluation of diamonds weighing 1-carat (0.2 grams) or over would be upgraded by a half to one grade compared to the industry's uniform standards, and that of diamonds weighing less than 1-carat would be upgraded by a half grade.

Following the decision, the association started overestimating diamonds at the Tokyo headquarters as well as its Osaka and Fukuoka branch offices.

In October 2008, a jewelry shop in Tokyo reported to AGL that the evaluation conducted by GAAJ's Fukuoka office was wrong, prompting AGL to re-evaluate the questionable diamonds. As a result, it turned out that GAAJ had overestimated diamond quality in terms of color.

GAAJ is one of the top three gemology companies in Japan that boast a combined 70 to 80 percent share of diamond evaluation in the domestic market. The evaluation certificates such companies issue are used to value diamonds retailed at major department stores and other outlets across the country.

If the color evaluation of a diamond is upgraded by one grade, the retail price can rise tens of thousands of yen to over 100,000 yen higher. As a result of the GAAJ's manipulation, retailers and consumers were effectively made to purchase overpriced diamonds.

"The more highly appreciated diamonds are than their true value, the more profits import companies can make. The GAAJ probably tried to pick up more orders for evaluation by overestimating diamond quality," said a former employee at GAAJ's Fukuoka office.

In Japan, evaluation certificates are only issued for diamonds, specifying their weight, cut and other qualities. The certificates are issued by private companies and their appraisal method does not entail official attestation. International evaluation standards are based on those set by private organizations in Europe and the United States, and Japanese companies mostly adopt the method used in the U.S.

The most commonly used evaluation items are the so-called "4Cs" -- cut, color, clarity and carat -- of diamonds. Only carats can be mechanically gauged, while other qualities -- color in particular -- ultimately depend on appraisers' senses and are subject to varying evaluation.

The credibility and fairness of evaluation certificates are not only important to consumers but also to retailers. AGL and other organizations set uniform color standards in the 1990s by creating "standard gem sets" in collaboration with leading U.S. evaluation organizations and distributing them to its member companies. However, since consumers cannot assess fine details in quality, they have no choice but to believe in dealers' claims that they have appraised the diamonds based on the standard gems.

Link to article: http://mdn.mainichi.jp/mdnnews/news/20100515p2a00m0na014000c.html

Oregon sunstone and treated feldspar from Mexico are easily identified by Raman photoluminescence: Rossman and McClure's findings in error

ISG: The story of the ISG Raman Microscope scans of andesine.

Numerous errors in claims and reports abound throughout the industry!

At the recent Sinkankas Symposium on Gem Feldspar, Dr. George Rossman posted up a slide (you see at left) of one of our composite Raman scan images and declared our findings to be incorrect.....based on a quote he attributed to us that we never made. Indeed, Dr. Rossman has never seen any of our study specimen group (in spite of our offering same) and has not actually tested any of our specimens. And yet, he incorrectly made the declaration that we were wrong in our findings.

The problem: what he claimed we said wrong, we did not say at all. What we did say...he totally ignored.

Confused? So are we! This brings to light the problem with this entire andesine fiasco, certain members of the industry have continually tried to protect the alleged perpetrators of the andesine problem at the expense of truth.

Since Dr. Rossman chose the Symposium at the GIA to present his case without our having the opportunity for rebuttal of his statements, we feel it only fair that we have the opportunity to do so here

We will first share with everyone what our andesine study group actually looks like...or at least part of it. Rather than allowing the alleged perpetrators of the andesine fiasco to supply our specimens, the ISG has purchased hundreds of specimens on the open world markets. We have sought out mine owners from the various mines to obtain proper specimens from as many locations as possible, received specimen submissions from consumers for testing, and we have paid for virtually all of our other specimens so that our research will remain independent and without encumberance to outside influence. Pictures of just a few are below including the inbound shipping envelopes we maintain for records.

With the help of many consumers who wanted answers, the ISG obtained an Enwave Raman Microscope that we had custom built with a Meiji Techno MX microscope. We proceeded to do over 1000 Raman scans of the specimens including specimens from all origins and all colors. The image you see at the top of this page is only a single composite of two scans. We thought you would be interested to see the whole ISG Raman Story.

We wish to acknowledge and thank Marty Haske of Adamas Gemological Laboratory for his research and website covering the topic of Raman Photoluminescence. Mr. Haske's work proved pivotal in our research to identify the diffusion treatment of andesine. Here is how it worked......

In the image at left you see a composite of many scans done on Oregon Sunstone from as many mines as we could gather. We have literally thousands of specimens of Oregon Sunstone in our office, and the Raman Photoluminescence scan you see at left is classic for all.

Then, we tested a number of the Chinese and Mexican feldspar specimens.

At left is a composite image of the scans from the Mexican yellow feldspar and Chinese red andesine. The Chinese andesine includes stones claimed to be from Tibet, Mongolia, and the Congo.

As you can see, we did not rely on the peaks as claimed at the Sinkankas Symposium, but rather the whole of the Raman Photoluminescence reaction.

With over 4 kilos of Casa Grande/Chihuahua Mexican material, and several hundred Chinese andesine, the results we got were repeatable, and verifiable in stone, after stone, after stone, after stone....you get the idea.

Once we compared the three groups, we found that indeed the Oregon Sunstone had a unique, predictable and repeatable Raman Photoluminescense result, and that it was significantly different than either the Mexican or Chinese andesine.

In all cases, the Mexican and Chinese material all tested out the same.

Which....was our first report: That the Chinese andesine tested the same as the Mexican andesine with the Raman.

But we did not stop there.

We obtained transparent plagioclase feldspar specimens from as many sources as we could find and verify. These included: Madagascar, Oregon, Mexico, Tibet, Mongolia, Congo, India, and Tanzania.

As you can see at left, each source had a unique Raman Photoluminescent reaction with the exception of the Mexican and Chinese. These were identical.

This was the crux of our Raman reports, and our findings that the Chinese andesine tested the same as the Mexican feldspar. Did it actually originate from Mexico? Who really cares? We don't. But apparently someone at Caltech and DSN cares. However, as the California Appeals Court ruled in the past few days, the origin of the material is not as important as the selling of the diffusion treated andesine without disclosure. The origin is of little or no importance based on the findings of the court in deciding against Direct Shopping Network in their lawsuit.

But there is one step further we need to go in this ISG Raman Story....

"The GIA is currently unable to separate diffusion treated red Tibetan andesine from natural red Oregon Sunstone," GIA Executive at the Sinkankas Symposium

Also at the Sinkankas Symposium a high ranking GIA executive made a presentation statement that you read above. The GIA cannot separate the natural red Oregon Sunstone from the diffusion treated Chinese material. Regardless of the refractive index differences that we have already demonstrated, the Raman Photoluminescense can.....well, I will let you see for yourself.

At left is a Raman Photoluminesence composite of a Plush Oregon Sunstone and a Tibet red diffused sunstone.

Can you separate these two?

Just for arguments sake, we performed a set of scans on Plush Oregon sunstone and a tray of Mexican yellow feldspar and Chinese red diffused andesine.

Again, the image speaks for itself.

At the risk of appearing flippant and/or a bit sarcastic, I will tell the following true story......

I gave my 8 year old son 2 red stones and had him perform scans with our Raman Microscope. He was able to separate the Oregon Sunstone and the Chinese diffusion treated andesine by Raman Photoluminescense. He has no idea how it works technically, but the Enwave Raman and support software has advanced to the point that even an 8 year old can separate natural Oregon Sunstone and diffusion treated Chinese andesine. Seriously!

With the ruling of the California Appeals Court that says Direct Shopping Network failed to prove a prima facie case on any of their accusations against myself and Interweave this is only the end of one chapter in this never ending story.

The next part goes to Andegem and the AGTA who DSN blames for all of this. Andegem for supplying it, and AGTA for certifying it as all natural and untreated. We have implored both of these organizations to step up and do the right thing before lawsuits and court rulings began. They failed to do so.

Perhaps they will now since DSN seems to be willing to throw both of them under the bus.

But that.....is another story.

Robert James

President, International School of Gemology

Vindication for Robert James and Colored Stone Magazine versus Art Garabedian, DSN, and Andegem

Vindication For Free Speech And Opposing Ideas

by Lisa Brooks-Pike, May 18, 2010

On Monday, May 17th, the Court of Appeals of the State of California, second appellate district, division four, reversed the previous ruling in Direct Shopping Network, LLC (DSN) v. Interweave Press, LLC.

In late 2008, Art Garabedian of Direct Shopping Network, LLC (DSN) filed a law suit against Robert James, Colored Stone Magazine, Colored-Stone.com, Interweave Press, LLC, and Does 1-1000, for trade libel, interference with contract, and intentional and negligent interference with prospective economic advantage. Attorneys for Interweave Press responded by filing an anti-SLAPP motion, a motion which would prevent the case from going further as they deemed it a “Strategic Lawsuit Against Public Participation.”

The anti-SLAPP was heard in Los Angeles County Superior Court by Judge Laura Matz who denied the anti-SLAPP motion on 04/10/2009. Attorneys for Interweave immediately filed an appeal and yesterday won the case and were awarded costs when Judge Matz’s ruling was “Reversed in Full.” Click to View

The findings of the appellate court are profound and send a message to the gemstone and jewelry industry.

Regarding DSN’s claim for trade libel, the courts find that DSN presented no admissible evidence. Garabedian attempted to stand behind a solitary AGTA report listing as natural an Andesine sample purchased from Andegem. The court determined that not only was the test performed on only one sample, but that the AGTA report itself was hearsay, and that the report itself stated it was subject to numerous limitations and conceded that “some treatments commonly applied to gem materials are not currently detectable.”

The courts also outline that statements of opinion are protected speech, and go on to say, “under the first amendment there is no such thing as a false idea. However pernicious an opinion may seem, we depend for its correction not on the conscience of judges and juries but on the competition of other ideas.” The court documents point out that “James and Dr. Rossman tested different stones and James offered to make the stones he tested available to DSN.”

The courts found that DSN produced no evidence that the claims of color treatment were false. DSN was also unable to provide proof that it lost sales because of the suggestion of Mexican origin rather than the presence of treatment, nor did DSN provide proof that any contract had been disrupted. It was the court's opinion that the artificial treatment of the gemstones superceded the issue of origin.

The conclusion of the courts: “DSN presented no evidence that defendants interfered with any particular relationship or expectancy. Moreover, DSN identified no wrongful conduct apart from the allegedly false and defamatory statements made about its product. As we have concluded the statements concerning treatment were not false and the statements concerning origin were not demonstrably defamatory, there is no support for the “wrongful conduct” element of the interference claims.”

“The order denying the motion to strike is reversed. Interweave is awarded costs on appeal.”

Click to see the 35 page court ruling
Copyright© 2010 Jewelers Ethics Association
The above article may be reprinted, reproduced and distributed in its entirety, with all copyrights in tact.

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