What led to the fraud allegations against Diamond Doctor. How did the legal battle unfold between David Blank and Brian Manookian. What were the terms of the settlement. Why did Diamonds Direct acquire Diamond Doctor.
The Rise and Fall of Diamond Doctor
Diamond Doctor, a once-prominent independent jewelry store in Dallas, found itself at the center of controversy and legal battles before ultimately being sold to a larger jewelry chain. This article examines the events surrounding Diamond Doctor, from fraud allegations to its eventual acquisition.
Fraud Allegations and Online Attacks
In May 2016, Nashville attorney Brian Manookian launched an aggressive online and billboard campaign against David Blank, the owner of Diamond Doctor. Manookian claimed that Blank was deceiving customers by selling overgraded diamonds. These allegations quickly gained traction and put Diamond Doctor’s reputation at risk.
What were the specific claims made against Diamond Doctor?
Manookian accused David Blank of duping customers by selling diamonds that were graded higher than their actual quality. This practice, if true, would allow the jeweler to charge inflated prices for inferior stones.
Legal Battles Ensue
In response to the damaging allegations, David Blank filed a lawsuit against Manookian in federal court. The legal battle that followed was tumultuous and filled with unexpected twists.
How did the court proceedings unfold?
The case took an unusual turn when a federal judge ruled that Manookian likely fabricated a client and committed abuse of the judicial process. This ruling was unprecedented, according to seasoned Dallas trial lawyers who observed the proceedings.
FBI Investigation and Settlement
As the legal battle raged on, the FBI opened an investigation into Manookian and his law firm. This added a new layer of complexity to an already contentious case.
What were the terms of the settlement?
After intense negotiations, Blank and Manookian reached a confidential settlement in the early hours of a Wednesday morning. While the exact terms remain undisclosed, it was revealed that Manookian agreed to a permanent injunction, prohibiting him from contacting or harassing Blank and his family in the future.
The Acquisition by Diamonds Direct
In November 2016, amidst the ongoing legal turmoil, David Blank sold Diamond Doctor to Diamonds Direct, a Charlotte-based retail chain looking to expand its presence in Texas.
Why did Diamonds Direct acquire Diamond Doctor?
Diamonds Direct saw an opportunity to enter the Dallas market, which they had been eyeing for years. The acquisition of Diamond Doctor provided them with an established location and customer base in a prime real estate market.
Impact on Diamond Doctor’s Operations
The sale to Diamonds Direct marked a significant change for Diamond Doctor, transitioning from an independent jeweler to part of a larger retail chain.
How did the acquisition affect Diamond Doctor’s day-to-day operations?
While the store began operating under new ownership, David Blank agreed to stay on for at least two years to ensure a smooth transition. Diamonds Direct also committed to maintaining Diamond Doctor’s philanthropic efforts in the local community.
Lessons Learned from the Diamond Doctor Controversy
The Diamond Doctor saga offers valuable insights for both consumers and businesses in the jewelry industry.
How can consumers protect themselves when purchasing diamonds?
- Always request and verify diamond certification from reputable grading laboratories
- Seek second opinions from independent appraisers
- Research the reputation and history of jewelry stores before making significant purchases
- Be wary of deals that seem too good to be true
What can jewelry businesses learn from this incident?
- Maintain transparent business practices to build trust with customers
- Implement strict quality control measures to ensure accurate grading and pricing
- Be prepared to address and resolve customer complaints promptly
- Develop a crisis management plan to handle potential reputation damage
The Future of Diamond Doctor Under New Ownership
With the acquisition by Diamonds Direct, the former Diamond Doctor store in Dallas entered a new era. The change in ownership brought both opportunities and challenges for the business.
How does Diamonds Direct plan to integrate Diamond Doctor into its operations?
Diamonds Direct intends to leverage its vertically integrated business model, which includes a buying office in the world diamond exchange in Tel Aviv, to enhance the offerings at the former Diamond Doctor location. This integration aims to provide customers with a wider selection of loose and mounted diamonds at competitive prices.
Will the Diamond Doctor brand continue to exist?
While the store now operates under the Diamonds Direct name, the legacy of Diamond Doctor may continue through its established customer relationships and community involvement. The retention of David Blank for a transitional period suggests a desire to maintain some continuity with the store’s history.
Implications for the Jewelry Industry
The Diamond Doctor controversy and subsequent acquisition by Diamonds Direct highlight several trends and challenges facing the jewelry industry.
How are independent jewelers faring in today’s market?
Independent jewelers face increasing pressure from larger chains and online retailers. The acquisition of Diamond Doctor by Diamonds Direct exemplifies the trend of consolidation within the industry, as larger companies seek to expand their market share through strategic acquisitions.
What role does technology play in modern diamond grading and sales?
Advancements in technology have made it easier for consumers to research diamonds and compare prices online. This increased transparency puts pressure on jewelers to ensure accurate grading and competitive pricing. Some retailers are adopting advanced imaging and grading technologies to provide customers with detailed information about their diamonds.
Consumer Trust in the Diamond Market
The allegations against Diamond Doctor underscore the importance of consumer trust in the jewelry industry, particularly when it comes to high-value purchases like diamonds.
How can the industry as a whole work to maintain consumer confidence?
To maintain consumer confidence, the jewelry industry can take several steps:
- Support industry-wide standards for diamond grading and certification
- Promote transparency in pricing and sourcing practices
- Invest in consumer education about diamond quality and valuation
- Encourage third-party audits and reviews of grading practices
- Implement ethical sourcing initiatives to address concerns about conflict diamonds
What resources are available for consumers to verify diamond quality?
Consumers have access to various resources to help them verify diamond quality:
- Gemological Institute of America (GIA) reports and education materials
- American Gem Society (AGS) certifications and consumer guides
- Independent appraisal services
- Online diamond education platforms and price comparison tools
- Consumer protection organizations that focus on the jewelry industry
Legal Precedents and Ethical Considerations
The legal battle between Diamond Doctor and Brian Manookian raised important questions about legal ethics and the boundaries of aggressive marketing tactics.
How might this case impact future legal strategies in similar disputes?
The unusual developments in this case, including the judge’s ruling on potential client fabrication and abuse of judicial process, may serve as a cautionary tale for lawyers considering aggressive tactics in commercial disputes. It highlights the potential consequences of overstepping ethical boundaries in pursuit of a legal strategy.
What ethical guidelines should lawyers follow when publicizing allegations against businesses?
Lawyers must carefully balance their duty to advocate for their clients with ethical obligations to the court and the public. When publicizing allegations against businesses, attorneys should:
- Ensure all claims are based on factual evidence
- Avoid making false or misleading statements
- Respect the legal process and avoid trying cases in the court of public opinion
- Consider the potential harm to businesses and individuals before launching public campaigns
- Adhere to state bar association rules regarding attorney advertising and solicitation
The Role of Online Reputation Management in the Jewelry Industry
The Diamond Doctor controversy demonstrated the significant impact that online allegations and negative publicity can have on a jewelry business’s reputation.
How can jewelry businesses protect and manage their online reputations?
To protect and manage their online reputations, jewelry businesses can:
- Monitor online reviews and social media mentions regularly
- Respond promptly and professionally to customer complaints
- Encourage satisfied customers to share their positive experiences online
- Maintain an active and engaging social media presence
- Invest in search engine optimization (SEO) to improve visibility of positive content
- Consider working with reputation management professionals for complex issues
What legal recourse do businesses have against defamatory online content?
Businesses facing defamatory online content have several legal options:
- Send cease and desist letters to individuals or platforms publishing false information
- File defamation lawsuits against those responsible for spreading false claims
- Request removal of defamatory content from hosting platforms and search engines
- Seek court orders to compel the removal of false and damaging information
- Pursue legal action against competitors engaging in unfair business practices
The Impact of Consolidation on Local Jewelry Markets
The acquisition of Diamond Doctor by Diamonds Direct reflects a broader trend of consolidation within the jewelry industry, particularly the expansion of larger chains into local markets.
How does consolidation affect consumer choice and pricing in local jewelry markets?
Consolidation in the jewelry industry can have both positive and negative effects on consumers:
- Increased buying power of larger chains may lead to more competitive pricing
- Wider selection of inventory due to broader sourcing capabilities
- Potential loss of personalized service offered by independent jewelers
- Reduced diversity in product offerings as chains may focus on popular styles
- Possible standardization of pricing across markets, potentially eliminating local bargains
What strategies can independent jewelers employ to remain competitive?
Independent jewelers can adopt several strategies to compete with larger chains:
- Focus on personalized service and building long-term customer relationships
- Offer unique, custom designs not available from large retailers
- Specialize in niche markets or specific types of jewelry
- Leverage local community connections and support local causes
- Invest in online presence and e-commerce capabilities
- Collaborate with other independent jewelers to increase buying power
- Emphasize expertise and education to differentiate from mass-market retailers
The Future of Diamond Retail in the Digital Age
The Diamond Doctor case and its aftermath occurred against the backdrop of significant changes in the diamond retail landscape, driven by technological advancements and shifting consumer preferences.
How is e-commerce changing the diamond buying experience?
E-commerce is revolutionizing diamond retail in several ways:
- Providing consumers with access to a global marketplace of diamonds
- Offering detailed imagery and 360-degree views of diamonds online
- Enabling easy comparison of prices and specifications across retailers
- Introducing virtual try-on experiences using augmented reality
- Streamlining the custom design process through online tools
What emerging technologies are shaping the future of diamond retail?
Several technologies are poised to impact the diamond industry:
- Blockchain for tracking diamond provenance and ensuring ethical sourcing
- Artificial intelligence for personalized product recommendations
- 3D printing for rapid prototyping of custom jewelry designs
- Virtual and augmented reality for immersive shopping experiences
- Advanced imaging technologies for more accurate and consistent diamond grading
As the diamond industry continues to evolve, businesses must adapt to changing consumer expectations and technological advancements. The Diamond Doctor case serves as a reminder of the importance of maintaining ethical practices and building consumer trust in an increasingly transparent and connected marketplace.
Dallas-based Diamond Doctor sold to Diamonds Direct, a jewelry chain looking to expand in Texas
By Cheryl Hall
3:45 PM on Nov 2, 2016 CDT
David Blank has sold his independent jewelry store, Diamond Doctor, to Diamonds Direct as part of the Charlotte, N.C.-based retail chain’s aggressive expansion plan.
You may recall that Blank, aka the Diamond Doctor, became the target of an online and billboard attack in May by Nashville attorney Brian Manookian, who claimed that Blank dupes customers with overgraded diamonds.
Blank countered with a suit in federal court.
But Blank said Wednesday that the sale had nothing to do with this ongoing legal battle. Rather, it is the perfect handoff of his company for a good (and undisclosed) price to like-minded, consumer-oriented people.
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“I’ve been at this for nearly 13 years, and I’ve been approached by hundreds of companies in the past wanting to buy my business,” Blank said Wednesday. “And candidly, it was never ever for sale.
“But Diamonds Direct is the most dynamic jewelry company in the country at the moment. They’re the darlings of the industry. I think these guys are the perfect fit for my business and my staff.
“The great thing about this company that pushed me over the edge was a shared value system. They’re extremely philanthropic. They’re going to step into my shoes with all the charities.”
Diamond Direct president Itay Berger concurs.
The Dallas store, which began operating under the new ownership Wednesday, is Diamonds Direct’s 10th U.S. location and its third in Texas. It also has a store in Austin and one that opened in San Antonio two weeks ago. Diamonds Direct has been aggressively acquiring companies since it was bought by an investment fund owned by Blackstone Group last November.
“We’ve been looking at Dallas for a few years but never found the right timing and the right location,” Berger said.
“The opportunity came up through a mutual acquaintance. We saw a great location and decided to move forward. It was quicker than finding a freestanding locations in Dallas, which is a wonderful [read: expensive] real estate market.”
Diamonds Direct is a vertically integrated jewelry business with a buying office inside the world diamond exchange in Tel Aviv. Berger lives in Israel and heads up that operation. The company offers loose and mounted diamonds ranging in size from under half a carat to 20-plus carats.
Amit Berger, Itay’s brother and the company’s senior vice, is moving here from Birmingham, Ala., to oversee the Dallas operation.
But Blank will be at the store for at least two more years. “I will be here day to day. I want to make sure this is a very smooth transition for everyone.”
Cheryl Hall, Business columnist. Cheryl, a journalism graduate of SMU, has covered business for more than 45 years and gets her phone calls returned. She’s won numerous awards including several Katies from the Press Club of Dallas and a lifetime distinguished achievement award from the Society of American Business Editors and writers.
[email protected]/cheryl.hall.5015CherylHall_DMNCheryl_Hall_LinkedIn IconCheryl Hall
Diamond Doctor RICO Lawsuit’s Crazy Settlement
Randy Johnston
Aug 23, 2017
Blog, Trial Lawyers
Comments Off on Diamond Doctor RICO Lawsuit’s Crazy Settlement: ‘Baby Did a Bad, Bad Thing’
(Aug. 21) – Two seasoned Dallas trial lawyers say they have never seen anything like what they witnessed last week in federal court in the fraud and racketeering case between the Diamond Doctor and a Tennessee lawyer.
Never, says Randy Johnston, has he seen a federal judge rule that a lawyer likely fabricated a client and committed abuse on the judicial process, and then a lawyer representing the first lawyer “almost begged the judge” in open court to postpone a trial so they could try to settle the dispute.
Randy Johnston
At the heart of the case, David Blank, the former owner of the Diamond Doctor, accused Tennessee trial lawyers Brian Manookian and Brian Cummings and their law firm of engineering a $3. 6 million scheme to extort money from the Dallas-based jeweler. Manookian countersued, claiming that Blank and his company committed diamond fraud and cheated customers.
Adding intensity to the litigation, the FBI has opened an investigation of the Nashville lawyers and his firm and has been actively following the Diamond Doctor case, according to lawyers familiar with the case.
Blank and Manookian settled their litigation in the wee-hours of Wednesday morning after the federal judge handling the trial ruled that Manookian acted in bad faith in key parts of the case. Terms of the agreement are confidential, but The Texas Lawbook has learned that Manookian agreed to a permanent injunction to leave Blank and his family alone for good.
“David spent millions of dollars in legal fees and expert services for two reasons: he wanted his reputation back and he wanted peace,” says Johnston, who is the managing shareholder of Dallas-based Johnston Tobey Baruch. “He got both.
“There is zero evidence – not one shred of evidence – that David or his family did anything wrong, and we were ready to prove that in court,” Johnston says.
Efforts to obtain a comment from Manookian and his Dallas lawyers were unsuccessful.
Blank sold the Diamond Doctor business to Diamond Direct last year.
Dallas trial lawyer Bruce Steckler, who also represents Blank and Diamond Doctor, says his clients are pleased with the settlement agreement.
Bruce Steckler
“I cannot tell you how difficult this has been on David and his family,” Steckler says. “This case was 24/7, non-stop work. One day, we were dealing with a non-profit set up to attack our client. The next day, we faced robocalls targeting our client’s customers. The next day, there were Facebook sites and posts falsely attacking our clients.
“I’ve never seen a case like this before in my life,” he says.
The last few weeks – indeed, even the last few minutes – of the case proved fascinating.
Lawyers in the case conducted jury selection last Tuesday morning and chose eight jurors to hear the case.
During the lunch hour, the lawyers learned that U.S. District Judge Amos Mazzant had adopted a sanctions order by U.S. Magistrate Kimberly Priest Johnson that was devastating to Manookian and his firm.
Blank’s lawyers filed an emergency motion on June 27 contending that websites, a Facebook page and robocalls were targeting Diamond Doctor customers with false, inflammatory allegations against the jeweler. The plaintiff’s lawyers claimed that the group behind the effort, Diamond Integrity Standards Foundation (DISF), was actually a fake organization operated by Manookian and the firm.
One of the websites proclaims, “IT’S TIME TO PUT NOTORIOUS FRAUDSTER DAVID BLANK BEHIND BARS.” The site, which plays the Chris Isaak song “Baby Did a Bad, Bad Thing” states, “We now know that he was also perpetrating a massive tax fraud on the State of Texas and the citizens of Dallas. ” Another website encourages people to sue Blank and states that DISF has created a victims’ fund.
Court records show that Manookian testified under oath that he was merely a lawyer representing DISF and that his client is Felipe DeMase, who he says is a joint citizen of Italy and Argentina who contacted Manookian through the firm’s website about setting up the foundation.
When asked for specific details about DeMase, Manookian claimed he could not answer because the information was protected by attorney-client privilege.
Lawyers for Diamond Doctor say Manookian testified that DeMase visited his office once, but that no receptionists or other law firm staff could verify his existence because none were working that day and that the firm’s security cameras were not working either.
“Based on the record before the court, it is more likely than not that the DISF is an alter ego controlled by defendants, and Felipe DeMase is a fictitious individual,” Judge Johnson ruled.
“At the very least, defendants have deliberately obstructed the Court’s efforts to determine how the DISF came into possession of the Diamond Doctor customer information, and defendant Manookian has offered disingenuous testimony and untrustworthy documents in response to the court’s efforts to establish the nature and scope of his alleged representation of the DISF and Felipe DeMase,” Judge Johnson wrote.
“Furthermore, the creation and publication of the DISF websites appears to have been deliberately timed to interfere with or improperly influence potential jurors and witnesses,” the judge wrote. “Accordingly, the court finds Defendants’ bad faith behavior constitutes an abuse of the judicial process that warrants the imposition of sanctions under the court’s inherent powers.”
It was that order, according to Steckler and Johnston, that motivated Manookian’s desire to settle the case.
Johnston said he stood at the lectern before Judge Mazzant in Sherman on Tuesday afternoon to deliver his opening statements when defense counsel sought a delay in the trial in order to discuss a settlement with the plaintiff.
The judge responded that he enjoyed trials, that he believed the jury was eager to hear the facts in this dispute and that the parties could negotiate a possible settlement at the end of the day, after opening statements were finished, according to lawyers in the courtroom.
But lawyers for Manookian stressed that his client was interested in settling at that moment and that it would be too late after opening statements.
“They knew I planned to put serious allegations in the record in my opening and that I planned to call Manookian as my first witness, and they could not afford for Manookian to be forced to answer questions under oath,” Johnston said in an interview with The Texas Lawbook.
“They almost begged the judge to stop the trial so the two sides could negotiate,” Johnston says.
Judge Mazzant finally agreed. The two sides officially reached their settlement agreement at 1:30 a.m. on Wednesday.
Johnston says his clients did not file a complaint with the FBI, but that they are cooperating.
“Every time the FBI calls, we answer their questions,” he says.
The case is Diamond Consortium, Inc. et al v. Manookian, case number 4:16-cv-00094, in the U.S. District Court for the Eastern District of Texas.
© 2017 The Texas Lawbook. Content of The Texas Lawbook is controlled and protected by specific licensing agreements with our subscribers and under federal copyright laws. Any distribution of this content without the consent of The Texas Lawbook is prohibited.
If you see any inaccuracy in any article in The Texas Lawbook, please contact us. Our goal is content that is 100% true and accurate. Thank you.
Original article written by: Mark Curriden of http://texaslawbook.net
Sourced from: http://texaslawbook.net/diamond-doctor-rico-lawsuits-crazy-settlement-baby-did-a-bad-bad-thing/
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ProfStroySnab is an official dealer of the Dr. Schulze GmbH (Dr. Schulze) – Germany
In 1984, the company “Dr. Schulze Diamond Tools and Machines” was founded, and since then it has been manufacturing a complex of diamond tools, together with the equipment necessary for it. We would like to draw your attention to the fact that under the full complex we mean equipment and tools for construction and for stone processing and industrial use, or rather discs for stressed concrete, sand-lime bricks and refractories.
ProfStroySnab provides its customers with a relatively wide range of tools from the German company dr.schulze gmbh diamond tools and machines, which is engaged in their manufacture and production, which is carried out at four factories. Let’s take a look at them next.
– First Plant Bollenberg 10, D-57234 Wilnsdorf. Brazed diamond tool management and production are drill bits, discs, cutters, etc.; small-scale production of individual diamond segments, which also takes place under the order of specific customers.
– Second plant Stahlstraße 16, D-57234 Wilnsdorf. Production, including equipment warehouse. There is a test site here.
– Third plant Straße D Nr. 3, D-39245 Gommern. Production of tools with laser-welded segments is carried out – these are discs up to one meter, drill bits, as well as large-scale production of diamond segments, which have a high level of automation.
– Fourth Plant Willhelm-Fressel-Straße 5, D-21337 Lüneburg. In this plant, the production of disk cases is carried out, which allows the production of any form of disks, completely different sizes and according to individual requirements of customers, which takes place in a short period of time. Also here is the production of diamond rings required for drill bits.
A huge number of professionals are currently working at the above mentioned dr.schulze gmbh factories for diamond tools and machines.
In 2007 significant investments were made to expand the production of discs and segments in Lüneburg and Wilnsdorf.