Belgian Banks Sued Over Diamond Loss

Published on 08/01/12

Lazare Kaplan International, a publicly traded diamond company, demands more than $500 million in damages from two Belgian banks it claims aided and abetted the theft of $135 million in diamonds.
Lazare Kaplan International sued KBC Bank and Antwerp Diamond Bank in a federal RICO complaint in Manhattan.
Lazare Kaplan claims its catastrophic damages "were caused and continue to be caused by a racketeering, fraud and money-laundering scheme conducted by the defendants in concert with a complex web of individuals and entities controlled by or associated with defendants' customer, Erez Daleyot."
Daleyot is not named as a defendant.
Collectively described throughout the complaint as the "Enterprise," Lazare Kaplan claims the conspirators carried out their scheme "through a pattern of illegal conduct that included, without limitation, acts of criminal money laundering, bribery, mail and wire fraud, international transportation of stolen property and extortion occurring within the United States and elsewhere."
Lazare Kaplan (LKI) claims the two Belgian banks "played a central role in the enterprise in order to illicitly divert money into the Daleyot entities, including proceeds from the sales of the LKI diamonds, to cover - and then cover up - enormous losses defendants were facing on account of exceedingly large, unsustainable and illicit investments in companies in which the are certain of the Daleyot entities had a financial interest."