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Thursday, July 18, 2024 | Back issues
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Legal Tangle Over|230-Carat Diamond

LOS ANGELES (CN) - A diamond dealer claims a buyer reneged on a deal to buy the world's 12th-largest diamond for $23.5 million, which caused her longtime friend, casino magnate Steve Wynn, to fire her.

Diane Breitman dba Queen of Diamonds sued Brett Stettner and Winston-Stettner, in Superior Court. The claim involves "a 230-carat white pear-shaped diamond Cartier necklace known as the Wynn Diamond and the ill-fated $23,500,000 private sale agreed upon in June 2011," the complaint states.

Breitman claims Stettner strung her along for the better part of 5 months, though he had "no intention or ability to consummate the sale" of the diamond, owned by Wynn Resorts. And she says Stettner interfered with her attempts to sell the diamond to other buyers.

"The world renowned Queen of Diamonds brokered a sale of the Wynn Diamond to a Texas 'large diamond dealer' named Brett Stettner, who despite what he promised, and despite his representations that he was the actual buyer, couldn't pull it off," the complaint states. "Not only did Stettner renege on his contract, he misrepresented both his ability to pay the price in the first place, and also that he was the true buyer, when, in fact, he was only acting as a broker. Then he reneged on his settlement agreement. Then he lied about being the new owner of the diamond, casting an air of suspicion and mistrust over the whole transaction and those involved, and making it much more difficult for Diane Breitman to sell the Wynn diamond to any of several qualified buyers who were interested. Finally, he then conspired with others to send 'fake' buyers to Diane Breitman in a successful scheme to waste her time, and discredit her and cause Steve Wynn, the seller, to fire Diane Breitman as the exclusive selling agent."

Starting with a 581-carat rough-cut stone, diamond cutters in Antwerp worked on the stone for more than 2 years, fashioning the final 230.17 carat stone, with color H and clarity grade VSI, Breitman says. The stone was set in a Cartier necklace which itself cost more than $1 million. Two other stones also came from the original rock, of 6 and 2 carats.

Breitman says she arranged for the sale of the big diamond at a silent auction at the JCK Las Vegas jewelry show.

On June 4, 2011, Stettner said he wanted to buy the necklace, put down a 20-carat diamond as a deposit, and said he would deliver a $2 million nonrefundable deposit within a week, according to the complaint.

"In reliance on Stettner's representations that he was the buyer, that he had the funds available to complete the purchase, that he would deposit the $2 million non-refundable deposit within a week, and that he would close the purchase transaction within 30 days, Breitman stopped the auction, and turned away several very interested buyers," the complaint states.

But Stettner never paid the $2 million deposit and didn't close the deal, Breitman says. She claims he dragged his feet until early September, then asked to renegotiate the agreement, and said he had secured an investor to help him put up the money.

But after the deal was renegotiated, Stettner again failed to follow through, Breitman says. She says she declared Stettner in default of the agreement, and kept the 20 carat diamond as liquidated damages.

In October 2011, Breitman says, she found two interested buyers, both of whom asked to remain confidential. She says the first buyer was represented by a dealer named Zaki Salame and the second by an E Diamond lawyer, Cindy Malloy.

The complaint states: "In October Cindy Malloy contacted Reid Breitman [Diane Breitman's son, an attorney] who said that she just received an email with a picture of the necklace, with that day's newspaper, from Stettner, stating that he owns the necklace, and that Wynn does not, and that anyone saying that they can sell the necklace is lying to her. Stettner offered the fact that he was presently in possession of the Wynn Diamond as proof that he was the true, current owner of the Wynn Diamond. Molloy expressed her deep concern that something funny was going on, and that her client was very concerned that someone was trying to defraud him.

"It turns out that Zaki's buyer was actually E Diamond's client. Zaki had met Stettner in NY, and Stettner had told Zaki that Stettner owned the necklace. Stettner provided photoshopped pictures of the necklace with a current newspaper as proof that he owned the necklace and had possession of the necklace.

"The photo came from Zaki who gave it to Stettner; Stettner had the picture altered to make it look like he owned the diamond."

Breitman says she sent proof to Molly that the diamond was still at the Wynn Encore, but the "buyer got spooked and the deal died."

"As a result of Stettner's actions and the second deal falling through, Wynn was very disturbed and angry with Breitman for bringing such an unstable buyer as Stettner, and for causing so much trouble," the complaint states. "Wynn blamed Breitman for the hassles that were being caused by Stettner. To complicate matters, Stettner continued to contact Wynn Resort personnel, including Wynn's lawyer, Kim Sinatra, and others, which was disturbing to Wynn."

Breitman says Wynn fired her, which was "personally devastating."

"This also caused Breitman to suffer damage to her professional reputation, as it is known throughout the diamond industry that Wynn had retained Breitman to sell the famous Wynn Diamond, and that she failed and was fired by Wynn due to complications.

"At some point, Breitman is informed and believes that Wynn gave the 20 carat diamond back to Stettner (the earlier deposit) in exchange for a release from Stettner. Wynn washed his hands of the whole sordid affair in disgust," the complaint states.

She says she lost her commission from "the first aborted sale with Stettner which would have [been] $1,410,000," and the 20-carat diamond given on deposit, which was worth $420,000.

"To say the very least, Breitman has been distraught over the loss of her commissions and her good name, reputation and her long standing, profitable relationship, both business and personal, with one of the richest men in the world - Steve Wynn," the complaint states.

Breitman seeks $2.8 million in damages for breach of contract, intentional interference with contractual relations, intentional interference with prospective economic relations, fraud, and intentional infliction of emotional distress.

She is represented by Timothy Umbreit and by her son, Reid Breitman, with Corporate Legal Services of Pacific Palisades.

The law firm did not immediately respond to an emailed request for comment, sent Thursday after business hours.

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