A New York diamond dealer pleaded guilty on Thursday to stealing more than $400,000 worth of diamonds from two sellers and replacing them with cheaper lab-grown stones in a scheme he operated out of a Manhattan storefront.
The dealer, Manashe Sezanayev, 41, who owned Rachel’s Diamonds, a jewelry store in the heart of the borough’s diamond district, admitted to taking three diamonds he claimed to be interested in buying and surreptitiously swapping them with counterfeit versions while the sellers weren’t looking.
Mr. Sezanayev was indicted in Manhattan criminal court in July on charges of grand larceny, scheming to defraud and criminally possessing a forged instrument for his role in the scheme.
He pleaded guilty to grand larceny, which is a felony, and is expected to receive five years of probation and no prison time, according to the Manhattan district attorney’s office. Mr. Sezanayev has paid $200,000 in restitution and returned one of the stolen diamonds to the victim, the office said.
Alvin L. Bragg, the Manhattan district attorney, said in a statement on Friday that Mr. Sezanayev was now facing accountability for his crimes.
“We will continue to prosecute those who take advantage of consumers and conduct business deals in a dishonest manner,” Mr. Bragg said.
Mr. Sezanayev’s lawyer, Boris R. Nektalov, declined to comment on Friday.
The diamond district, a hectic pocket of commerce along 47th Street in Midtown Manhattan, is among the busiest hubs in the United States for diamond importing and exporting. The district, which still largely operates based on Old World systems of credit and interpersonal trust, can be particularly susceptible to scammers and fraud.
In February, two men in another case were accused in a federal indictment of reselling stolen jewelry and luxury goods at a store in the district. The goods had been taken by South American gangs, prosecutors said, and one defendant appeared to be linked to a group that is believed to have broken into the home of Joe Burrow, the Cincinnati Bengals quarterback.
The Gemological Institute of America, a nonprofit that researches and grades gemstones, said in 2021 that it had noticed an increase in the number of lab-grown diamonds bearing counterfeit inscriptions of authenticity.
Mr. Sezanayev’s diamond-swapping scheme began in February 2024, prosecutors said, when a seller visited his office with two diamonds — one worth $185,000 and the other $75,000 — that Mr. Sezanayev said he was considering buying.
During the meeting, Mr. Sezanayev brought the two stones to his scale, turning his back on the seller, and secretly swapped them with two lab-grown stones that had been cut to resemble natural diamonds and inscribed with a fake marking from the gemological institute.
The following month, Mr. Sezanayev told another diamond merchant that one of his customers was interested in purchasing a $200,000 stone from the seller. Later that day, prosecutors said, Mr. Sezanayev bought a lab-grown stone and had it cut and inscribed to resemble a natural diamond.
On April 2, Mr. Sezanayev met with the seller and the customer, and while Mr. Sezanayev was examining the $200,000 diamond, he switched it with the lab-grown stone, which he then gave to the seller.
The diamond frauds were not Mr. Sezanayev’s first brush with law enforcement. In May 2017, he was indicted in Manhattan federal court alongside 11 other merchants for running a multiyear scheme in which they swindled diamond wholesalers out of more than $9 million.
Mr. Sezanayev pleaded guilty in that case and was sentenced to one year in prison. He was also ordered to pay just over $510,000 in restitution to one of the victims of that scheme.
