Why Do Criminals Transact in Diamonds?

For many of us, diamonds symbolize beauty, luxury, and romance. However, diamonds also have a dark side. Criminals have long utilized diamonds as a means of illicit transactions and money laundering. The existence of lab-made diamonds, which are cheaper and more readily available, raises an important question: why do criminals still prefer natural diamonds?

The Illusion of Value

While lab-made diamonds have indeed flooded the market, criminals understand that the perceived value of natural diamonds remains significantly higher. Natural diamonds are still revered for their rarity, despite the fact that technology has made it possible to create identical counterparts in laboratories. By transacting with natural diamonds, criminals can deceive unsuspecting buyers or intermediaries into believing they possess a valuable asset.

Ease of Concealment

Another reason behind the preference for natural diamonds by criminals lies in their physical properties. Diamonds are incredibly durable and compact, making them easy to transport and hide. Criminals can discreetly carry them across borders or conceal them amidst legitimate shipments, making detection and confiscation challenging for law enforcement agencies. Lab-made diamonds, on the other hand, may not offer the same level of durability or compactness, raising suspicions during transportation.

Association with Wealth and Status

Diamonds have long been associated with wealth, power, and status. Criminals understand the allure that diamonds hold and utilize them as a means of flaunting their ill-gotten gains. By purchasing high-quality diamonds, criminals can showcase their purported success and elevate their social standing within their criminal networks. Lab-made diamonds, despite being visually indistinguishable, may lack the same cultural significance and perceived value associated with natural diamonds.

Evading Regulation

Diamonds, unlike other commodities such as gold, are not traded on an organized commodities exchange. The diamond market is fragmented and largely unregulated, making it an attractive space for criminals to operate within. Transactions can occur privately, with less government oversight and scrutiny, allowing criminals to launder money and exploit loopholes in the system. Gold, on the other hand, has a more established market with standardized prices and regulations.

Lack of Traceability

The diamond industry has made significant strides in recent years to combat the trade of conflict or blood diamonds. Diamonds now come with laser-inscribed serial numbers and documentation to prove their legitimacy. Criminals exploit the limited traceability of natural diamonds, often altering the documentation or creating forged certificates to legitimize their illegal activities. Lab-made diamonds, which are traceable from the point of creation, pose a greater risk as they leave a digital paper trail that can lead authorities directly to the criminals.

Summary

It might seem logical that criminals would opt for lab-made diamonds given their lower value compared to natural diamonds. However, the perception of value, ease of concealment, association with wealth and status, evasion of regulation, and limited traceability all contribute to the continued preference for natural diamonds in criminal transactions. As law enforcement agencies continue to tackle these challenges, it is crucial to understand the motivations and complexities behind criminal diamond transactions to effectively combat this illicit trade.