Diamond Buyer Wants Her Money Back

Maria Zurabova wants her money back. It's a year since she bought a selection of diamond rings from a supplier in New York, at a cost of $645,083.
Among them was a 1.50-carat cushion cut white gold diamond ring for $14,498; a 13.37-carat GIA-certified investment grade natural diamond for $22,500; a 2.39-carat round brilliant diamond rose gold ring; a 6.85-carat emerald cut platinum eternity band for $24,900; a 2.51-carat cushion cut diamond with 2.75 carats micropave French cut rose gold diamond shank; a 2.91-carat yellow gold pave cocktail ring with 3.50 carats on pave VVS diamonds. Altogether there were 28 invoices. But she hasn't received the goods. Nor has she received a refund. And now she's taking legal action.

She paid using debit cards linked to a Russian bank, just before the US imposed sanctions. And that's where the problem arose.
She authorized a series of payments through Square, Inc (subsequently rebranded as Block, Inc) the fintech company jointly founded by former Twitter CEO Jack Dorsey.
Square blocked the payment, saying the debit cards she used were issued by a Russian bank that had been sanctioned by the US government following the invasion of Ukraine.
But Zurabova's legal team says that's not relevant. "At the time of the merchandise purchases, purchasing goods in the United States by a U.S. person using funds held in a Russian bank account was perfectly legal - and it continues to be legal today," says their demand for a jury trial filed at the District Court Northern District of California, San Francisco Division.

They also say the dates don't work. At least one of Zurabova's cards was linked to Alfa Bank (Russia's largest privately owned financial institution, and its fourth-largest financial institution overall). Square claims, according to the court papers, that it couldn't process the payments because Alfa had been sanctioned.
That's correct in as much as Alfa was one of many financial institutions listed in the US Treasury's "unprecedented & expansive sanctions against Russia," announced on 24 February 2022 and effective as of 26 March.
But invoices submitted to the court are dated 7 to 9 March 2022, two weeks earlier.
"While Alfa Bank may have been sanctioned, the sanctions did not take effect until March 26, 2022, more than two weeks following Zurabova's payment of the Invoices and Square's receipt of the Funds," says the court filing.
"Moreover, the sanctions only covered transactions involving Alfa Bank debt or equity, and not purchases with debit cards, so the sanctions clearly do not apply to Zurabova's transactions as described herein."

Zurabova is a US citizen, resident in Florida. She was born in Russia, has family and friends there and has Russian bank cards because she travels there.
She bought the diamonds from Royal Star Inc., a jeweler in New York's Diamond District of New York City but never received them because the payments weren't processed.
"Despite receiving the funds before any sanctions of Russian banks were in place, and despite the fact that none of the sanctions affected Zurabova's transactions, Square claimed that Alfa Bank was sanctioned and that therefore it could not process Zurabova's purchase of the merchandise," says the filing.
Square retained the funds and has refused to return them or even offer any reasonable explanation as to why it retained them, it continues.
Zurabova's lawyers sent Square a demand letter in December but say they received no response, and in February they filed for arbitration, and heard nothing back (as of 3 March).
They are alleging several offences, including conversion (deliberately depriving someone of personal property), breach of contract, breach of covenant of good faith, unlawful and unfair business practices and unjust enrichment.
We approached Square (Block) but heard nothing back. We also approached Zurabova and her lawyers. Ditto.

Have a fabulous weekend.