Two Israeli Diamond Dealers Declared Insolvent

Gil and Yaakov Eizenman, father and son members of the Israel Diamond Exchange (IDE), on Sunday told the Exchange they cannot pay their debts to fellow traders. Their debts are estimated at $1.2 million. The two said they were robbed of $1 million worth of goods in London last week, and Israeli police investigators arrived at the IDE following a suspicion of wrongdoing.

On Monday, creditors were calling the IDE’s legal department to report debts. Currently, it is not clear how much the Eizenmans owe in the Exchange or to the banks, but sources close to the investigation estimate the debt to the industry at $1.2 million, as mentioned above.

The similarity between the value of the debts and the value of the goods claimed to have been stolen in London raised the suspicion of several people in the Exchange. IDE President Avi Paz approved and supported the unusual step of calling the police.

Paz has said on several occasions that financial issues between members that may have an illegal aspect to them should be settled within the Exchange, and that he will not tolerate wrongdoings by members. While in the past all insolvencies were settled internally, in recent years, the police were called to investigate cases in which suspicion of criminal acts was raised. This is a new policy aimed at curbing cases of planned falls that take advantage of other dealers.

In some of the past cases, diamantaires were accused of hiding assets, even making last-minute large purchases, before declaring their inability to pay debts.