(CN) – 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.”
Lazare Kaplan claims: “At every step of the way, defendants and other members of the enterprise worked in concert to: (i) plan the theft of the LKI diamonds; (ii) transfer the diamond through a series of legitimate and shame transactions that made them difficult to trace; (iii) launder the proceeds of the LKI diamonds through a network of legitimate and illegitimate businesses and accounts; (iv) use such proceeds to repay certain financially disastrous loans that defendants had made to Daleyot and his companies; (v) cover up their involvement in the illegal scheme; (vi) obstruct Lazare’s investigation regarding the theft of its diamonds and sales proceeds thereof; and (vii) attempt to put Lazare out of business.”
In its 156-page complaint, Lazare Kaplan seeks $135 million and treble damages for violations of interstate and foreign commerce laws, conspiracy, fraud, aiding and abetting fraud, tortious interference with prospective business advantage, commercial bad faith, conversion, negligence, breach of the covenant of good faith and fair dealing, and unjust enrichment
Lazare is represented by Christopher J. Sullivan with Herrick Feinstein.
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