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. Last Updated: 07/27/2016

Russia Seeks Assets of Diamond Firm

SAN FRANCISCO -- A San Francisco-based diamond company's assets -- which include a $20 million jet, luxury cars and a jeweled Faberg? egg -- have become the object of a court fight between the Russian government and U.S. tax authorities.

Russia's Committee for Precious Metals and Precious Stones filed papers in a San Francisco federal court Monday claiming that the assets of Golden ADA should go to Russia.

The Russian government has accused Golden ADA of stealing $400 million in diamonds, gold and cash.

The legal action at least temporarily blocks the auction of Golden ADA's assets, which was being carried out by the U.S. Internal Revenue Service, the federal tax collection agency.

The IRS raided Golden ADA last November after the Russian government filed a suit against the company claiming it had stolen $178 million worth of diamonds and other property.

The U.S. government also has claims of up to $63 million against Golden ADA for unpaid back taxes.

Mark Beck, an attorney for the Russian government, claimed in the court papers that the company's assets were held in a trust and should be turned over to Russia. He also asked the court to stop any further IRS actions.

IRS spokesman Larry Wright said he had not seen the legal papers and could not directly comment on Golden ADA, other than to say the government has claims of $63 million against the company.

He noted, however, that if a person or agency can prove to the IRS that they own property seized from someone else, the case never gets to court.

"We return the property if we think any claim is valid,'' he said. "But if someone is claiming that they're a creditor, that puts them in a whole different category.''

In that case, he said, they have to wait in line and the IRS would likely have first crack at the assets.

In the first auction, the IRS received about $850,000 from the sale of some Golden ADA assets, Wright said.

The Russian suit said Golden ADA was supposed to cut the diamonds and ship them back to Russia for marketing. But instead, Moscow said, the company sold the gems and then refused to pay the Russian government for them.