WASHINGTON: Brazil gets help from U.S. Justice Department in trying to get stone returned to South America
The largest uncut emerald ever discovered sits somewhere in Los Angeles County after having been extracted from a Brazilian mine 14 years ago. Now, as a legal dispute over its ownership churns in California court, Brazil wants it back, and it has a powerful ally: the U.S. Justice Department.
Earlier this week, Los Angeles County Superior Court Judge Michael Johnson declared three American businessmen to be the owners of the gemstone, which weighs 700-plus pounds and is about the size of a fire hydrant. But a federal judge in Washington, D.C., on Thursday issued a restraining order against the emerald at the Justice Department’s request, barring anyone from moving the rock. The order could allow the federal government to snatch up the 180,000-carat stone and then return it to Brazil, where prosecutors allege the stone was illegally smuggled from the country.
The emerald will remain in the Los Angeles County Sheriff’s Department until the Brazilian prosecution ends, or until the Brazilians agree to release it, wrote U.S. District Judge Colleen Kollar-Kotelly. A Justice Department spokeswoman declined to comment.
Andrew Spielberger, a lawyer for the three businessmen—Kit Morrison and Todd Armstrong of Idaho, and Jerry Ferrera of Florida—said Judge Johnson’s order became final earlier this week. Mr. Spielberger said before Thursday’s order that the government can’t take the stone, known as the Bahia Emerald, without paying his clients fair market value: More than $370 million.
“I hope the federal judge would look at this and say, ‘There’s a judgment here from a California superior court judge after six years of litigation. Jeez, I should take this into account,” Mr. Spielberger said.
Earlier this month, Justice lawyers asked the U.S. District Court for the District of Columbia for an “anticipatory restraining order” protecting the gemstone, warning that “there is a risk the Bahia Emerald could become fugitive.”
The Justice Department, in its application, gave the following account of the emerald’s route from Brazil’s Bahia state to the Los Angeles County Sheriff’s Department: Two Brazilians acquired the emerald in 2001 for about $14,400—a profound bargain given its current estimated value.
Kenneth Conetto, an American gem speculator, viewed the emerald in Brazil the following year and introduced another American speculator, Forrest Wayne Catlett, to the Brazilians.
The Americans tried—without success—to market the emerald as collateral against speculative gem deals, until about 2004, when the Americans convinced the Brazilians that they could make better use of the rock in the U.S.
The emerald arrived in San Jose, Calif., in April 2005, disguised in export papers as a lump of bitumen and asphalt. For the next three years, the Americans tried to sell the emerald or use it as collateral for a variety of mining ventures.
Eventually, it came into the possession of Messrs. Ferrara and Morrison for a trivial sum of $1.3 million.
The Los Angeles County Sheriff’s Department took custody of the emerald in 2008, after another businessman filed a police report claiming ownership.
Since then, the emerald’s fate has been bound up in litigation in Los Angeles County.
But behind the scenes, the U.S. government has been keeping tabs on the stone since at least 2011, when Immigrations and Customs Enforcement warned the Brazilian Ministry of Justice that the emerald may have been illegally spirited away, according to the Justice Department’s application for a restraining order.
Brazil then launched its own criminal investigation, leading a Brazilian judge to enter a restraining order against the emerald on May 14.
“The Bahia Emerald was illegally mined and unlawfully exported from Brazil,” said John Nadolenco, a lawyer representing the Brazilian government. “We are grateful that the Department of Justice and the federal courts have acted to protect it.”