. Last Updated: 07/27/2016

Diamond Theft Suit Resolved

LOS ANGELES -- Closing a chapter in a scandal that cost a long-time Kremlin apparatchik his job, the Russian government said Friday it has settled a lawsuit against a mysterious San Francisco company it accused of stealing up to $171 million of the country's diamonds and precious metals.


The settlement gives the Committee for Precious Metals and Precious Stones ownership of all the remaining assets of Golden ADA, which was set up in 1992 by a group of Russian citizens purportedly to process rough diamonds consigned by Russia.


The committee, which supervises the processing and export of Russian diamonds and precious metals, charged that Golden's owners instead misappropriated virtually all the diamonds, gold and other valuables sent to San Francisco.


They allegedly liquidated most of the goods to finance a shopping spree for yachts, luxury cars, aircraft and real estate before disappearing, possibly overseas. Among their acquisitions was a four-story building in the San Francisco jewelry district, in which they installed a state-of-the-art diamond cutting factory.


The scandal forced President Boris Yeltsin last February to dismiss the head of the committee, Yevgeny Bychkov.


The disappearance of the Russian goods provoked a public uproar in Moscow, where it was seen as evidence that government officials were spiriting the country's natural resources overseas for their own profit.


This week's settlement gives the committee title to as much as $165.4 million in Golden ADA assets, most of which remain the subject of a worldwide search.


Left unresolved is a $63 million lien imposed on Golden's assets by the Internal Revenue Service, which moved against the company earlier this year on the theory that stolen assets are fully taxable.