Monday, August 24, 2009

Government Auctions Off 605 Diamonds

It is not so easy these days buying what the government is selling. One could argue that this holds true for low-yielding Treasury bonds and economic forecasts alike.

Some government commodities, though, are not only simple to obtain — they are actually priced to sell: Items seized during federal crimes, for instance, like the 605 loose diamonds that were auctioned off on Friday beneath the crystal chandeliers in the Grand Ballroom of the New Yorker Hotel.

While crime does not always pay the criminal, it does, in circumstances such as these, pay the government, the auction house and — if he or she can wangle a bargain from the process — the buyer, too.

“Whatever economic climate you’re in, there’s always opportunity,” said Rick Levin, a Chicago auctioneer who brought the diamonds to market after they were seized in 2003 from two Manhattan jewelers in a sting operation that was devised to combat money-laundering for Colombian drug cartels.

His diamonds, sold on behalf of the federal Department of the Treasury and divided into more than 100 lots, — had once belonged to Roman and Eduard Nektalov, a father-and-son team who sold gems in diamond district in Manhattan and were targets of Operation Meltdown, a federal investigation into the laundering of drug money. In 2003, the two men, members of a prominent family of Bukharian Jews, were arrested after trading the stones to an undercover agent for $500,000 cash.

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