By Pete Kotz
By Michael Musto
By Michael Musto
By Capt. James Van Thach told to Jonathan Wei
By Kera Bolonik
By Michael Musto
By Nick Pinto
By Steve Weinstein
The entrance to the 110-year-old brownstone at 2 East 12th Street, two blocks south of Union Square, isn't particularly dramatic or imposing. You have to step down to reach the front door. There's no doorman to wait on you.
Looking at it, you wouldn't imagine that the basement apartment there was at the center of a bitter court fight that ranged from the West 47th Street Diamond District deep into the Amazon jungle, and involved smuggling, bribery, corruption, a $20 billion corporation, Stone Age Indians, and a massacre.
Longtime New York diamond merchant Marco Kalisch and his wife, Mayra, owned the apartment, having lovingly restored it after combining it with the two adjacent units. They had a nice life—at least until Kalisch and his Brazilian partners tried to corner the market on rough diamonds being illegally mined on an Indian reservation in the Amazon.
"The story told by Marco [Kalisch] could be the basis of a screenplay," a U.S. bankruptcy judge noted in his surprisingly novelistic description of the case that was almost completely ignored by the media. "The background [swirls] with references to shady dealings and long journeys into remote areas of the Amazon jungle, describes an apparently illegal conspiracy to obtain rough diamonds from . . . Indians in Brazil and import those diamonds into the United States for ultimate sale in the diamond market of Antwerp."
That wild scheme, actually successful for a short time, ultimately blew up. And in the end, what the Americans involved in it were left to fight over was the basement apartment on East 12th Street—so far away from where the story starts, thousands of miles south, deep in inaccessible jungle.
The 1,300-member Cinta Larga tribe, whose name means "Wide Belt," lives on a 6.7-million-acre Brazilian reservation of dense jungle, limited roads, and almost impassable rivers. The land, about 2,100 miles northwest of Rio de Janeiro, is reachable only via 100 miles of poorly maintained dirt roads. Inside the reserve, travel is limited largely to narrow foot trails and the river.
The first extensively recorded encounter with white Westerners came during Theodore Roosevelt's historic expedition down the so-called River of Doubt, named for its extreme and dangerous conditions.
When Roosevelt and the Brazilian explorer Cândido Rondon, for whom the state is named, encountered them in 1914, the Cinta Larga had never seen a white man before. They were still living in the Stone Age, isolated by the river, and hadn't even thought to build boats.
War for the Cinta Larga was a cultural obsession. The tribe decapitated and eviscerated their enemy's dead and grilled the meat over an open fire before bringing it home for their wives to slice, cook with water, and consume.
Over the years, the tribe began to encounter outsiders more frequently—often, men who entered the forest to gather latex from rubber trees. In 1928, a gang of rubber-tappers slaughtered a Cinta Larga village. Battles between Indians, tappers, and mineral miners continued for decades after that. The violence and periodic epidemics the tribe blamed on outsiders took a toll.
In 1969, the tribe was about 2,500 strong. But by 1981, their numbers had dwindled to 500. From that low, the tribe's numbers increased to about 1,300 in 2003. And while some Cinta Larga still insist on traditional garb, many of their members have learned Portuguese, dress in modern clothing, and drive pickup trucks.
While diamonds had been found on the reserve from time to time over the decades, the major rush for the mother lode began in 1999, when a miner came out of the jungle with a gem the size of a baby's fist.
Brazilian rough diamonds are alluvial, which means they are close to the surface—most often found in riverbeds. All you need to find them is a good spot and a pan that sifts the river bottom.
After the 1999 discovery, thousands of subsistence-level prospectors—known as garimpeiros—descended like locusts onto the reservation.
By 2002, there were some 3,000 garimpeiros mining in the reserve. The government expelled them, but they kept returning, which created extreme tension with the Cinta Larga and led to at least 70 deaths on both sides.
Finally, the government set up roadblocks to prevent miners from getting to the reserve, but even that didn't work.
Brazilian authorities have estimated that the Cinta Larga lands contain the largest diamond reserves in South America. Some $2 billion in diamonds have been mined on the reserve since 1999. Another estimate says the country loses up to $800 million a year from diamond smuggling.
In 2003, as Marco Kalisch hatched a scheme to harvest diamonds from the reservation, the Cinta Larga were still dealing with the protracted struggle to control the steady theft of its vast diamond deposits.
Kalisch, then in his late fifties, had been running a diamond-importing business since 1983 out of a stall in the West 47th Street Diamond District.
There, on a block that thrums with activity, you'll find dozens of cramped stalls in one storefront after another, with dealers haggling, prodding, and beseeching each other in a dozen languages, cell phones surgically connected to their ears.
Kalisch was well-educated. He had earned an undergraduate degree from Lehigh University, had studied in the Hague in the Netherlands, and had technical training at the Gemological Institute of America. He was a longtime member of the New York Diamond Dealers Club.
He typically went to Brazil between two and 12 times a year on business, buying his gems from a handful of trusted brokers.
Kalisch was successful enough that he was able to buy a studio apartment with a small backyard on the ground floor of the co-op on East 12th Street, and then, gradually, purchase the other two apartments on the floor and combine them into a nice pad for himself, his wife, and their daughter, who attended a private elementary school.
And so it went for many years. A man who lived by his wits, and his ability to buy and sell, made a steady income for himself.
"Marco would go down to Brazil, pick up stones, work on 47th Street a lot, trade on 47th Street, and then come home, and we would have a normal evening," Mayra later testified. "And that was our life."
But Kalisch yearned for something more ambitious, something involving the Cinta Larga reservation. He just needed to figure out how to get around the Brazilian law that banned mining of any kind there.
Kalisch formed a corporation in Brazil with two other partners: Marco Suarez, a Brazilian police official, and Marcos Glikas. They called the company "M-3 Imports," because of the similarity in their first names.
A few years earlier, Glikas had been indicted and convicted of money laundering in New Jersey. He'd been delivering illegal drug proceeds to the former president of a Brazilian company with a U.S. subsidiary, and $8 million in cash was seized when the authorities moved in. He served almost three years in federal prison in Coleman, Florida, then was released in 2002 and returned to Brazil.
Glikas would be responsible for converting U.S. funds into Brazilian money. Suarez was in charge of moving the merchandise and paying the bribes necessary to get past roadblocks and checkpoints. In a place like Brazil, where official corruption is so widespread, things would never get off the ground without someone like Suarez handing out bribes liberally.
While Kalisch was excited about the new venture, his wife, Mayra, was nervous. Despite working on the margins, Kalisch had long been a diamond merchant, and now he was wading into the messy world of Brazilian diamond mining. And the couple had a daughter to consider. "He started to speak to this gentleman, Marcos Glikas, from the house, which was unusual," she testified. "So I'm not happy with this. . . . He is changing. I said to him, don't get involved, don't do this. What good can come from you doing business with Marcos Glikas and doing this thing that you're telling me is not clear with the Brazilian government?"
The marriage became strained, and the couple started joint therapy. "I would really let loose in couples' therapy," Mayra testified. "I would tell him, you're going to lose your business. There's no way that this could end in anything good."
In a business plan later produced for his investors, Kalisch claimed he started working with Cinta Larga leaders, along with "state and local authorities," in March 2003.
Kalisch could say that because Glikas had met with the governor of the state of Rondônia, Ivo Cassol, and a top lieutenant who was in charge of the state's mining company. Glikas later told investigators that Cassol, in essence, was well aware of the smuggling scheme.
And Kalisch may have imagined that he was actually helping the Cinta Larga take control of their diamond reserves. At one point, he told his investors that he was "helping local indigenous people."
With government officials taken care of, Kalisch and his partners needed financing. Kalisch borrowed $400,000 from a credit line with Merrill Lynch and wired it to Brazil, where it was used mainly to purchase mining equipment and machinery for Cinta Larga use.
In the middle of 2003, the scheme began to pay off. Kalisch started buying and importing rough diamonds from the Cinta Larga lands.
Kalisch knew that he was on to a major new market, and he needed real money behind the venture. For financing ideas, he turned to his close friend, Victor Janovich, a man in the coffee trade in Nicaragua and Louisiana who had a summer home in Greenport, New York. Kalisch and his wife would often spend weekends with Janovich and his wife.
Kalisch and Janovich spoke at length about the scheme, and Kalisch would later testify that Janovich understood that paying bribes for unauthorized mining was involved.
During one of those summer weekends, Janovich suggested that Kalisch seek financing from the Maple Trade Finance Corp., an investment firm with a $100 million portfolio. Janovich had another old friend there named James Culver, who happened to be the president of Maple Trade. Those discussions began around June 2003.
Maple Trade was already "familiar" with the Brazilian marketplace, having done large business deals in Brazil, including a $40 million venture with a Brazilian sugar manufacturer.
Culver had an interesting background himself. He was an investment fund manager, and had worked as chief economist for the House Agriculture Committee and as a visiting professor of economics at Baruch College in Manhattan. (Culver, Kalisch, and their lawyers did not respond to repeated calls for this story.)
"When I originally sought money from Maple Trade as a backer, the arrangement was not merely professional, but friendly," Kalisch said in a 2005 affidavit. "The financing was certainly entered into by everyone in good faith. . . . Jim and I—we all believed that this business opportunity had the potential for enormous success."
That collegial environment would eventually fade into recrimination, bitterness, and litigation. Lots of litigation.
Despite its dull name, Maple Trade was no minor player. The New Jersey firm was a subsidiary of the Maple Finance Group, Inc., a $20 billion Toronto-based company that was the second largest residential mortgage lender in Canada.
That meant that the National Bank of Canada, the Ontario Teachers' Pension Fund, and a large Hong Kong investment company were about to, indirectly, get into the business of smuggling diamonds out of an Indian reservation in Brazil. Whether they knew it was illegal or not was a matter of great contention much later.
"Marco's attitude was kind of like he was hanging with the big boys," Mayralater testified.
Kalisch prepared a business plan that would entice Maple Trade to loan him money so he could buy the diamonds. "Since March 2003, M-3 has been working with state and local authorities and elected leaders of the Indian bands to devise mutually beneficial ways to exploit these resources," the business plan said. "After much work and roughly $400,000, M-3 is in a position to buy from the Indians their monthly production of rough diamonds."
Kalisch wrote that between August 27 and October 2, 2003, he and his partnershad purchased 3,600 carats of diamonds from the Cinta Larga for a total of $650,000.
He claimed that he could accelerate the process, buying up to 3,000 carats a month for up to $400,000, and earn a net profit of 15 to 20 percent. That meant that Kalisch imagined he could earn $4.3 million a year from Cinta Larga diamonds in gross revenue.
In the business plan, Kalisch didn't indicate that the venture was technically illegal under Brazilian law, but he did note that he had a "silent partner who was a Brazilian government official." Whether that hint should have made Culver aware of the venture's black-market nature became a major issue when the whole thing soured.
A simple Internet search, however, should have made it clear that exporting diamonds from the Cinta Larga was a subject soaked in controversy that had received much attention in the international media.
But, at least according to Kalisch, Culver didn't ask many questions: "I explained to Culver what the function of M-3 was, and he accepted that explanation, apparently, because he didn't ask me any further questions," he testified.
Kalisch explained that he would hand-carry the diamonds to the U.S. because they couldn't use a commercial carrier, like the security company Brink's, until the process was "officialized." Once he was through U.S. customs, the diamonds would be shipped on to Antwerp, where they would be sold on the open market.
Lastly, the plan noted: "The prospect of the Bonus Stone (large gemstones, fancy colored diamonds, etc.) is a prime motivator in this process. These stones represent potential windfalls."
While Culver and other Maple Trade officials liked the project, the company's Patriot Act compliance officer expressed some concern.
In September 2003, Maple Trade committed to loan up to $3 million to the Kalisch venture.
On November 7, 2003, Kalisch met with Culver. Kalisch, in his 2005 affidavit, claims Culver told him, "I expect to make good money on this."
"It was somewhat cloudy to me whether to consider Maple an investor or a lender," Kalisch would say later in an affidavit. "The money was critically important to me," he added. "It was needed to use for operations in Brazil, and because of the nature of the enterprise we were attempting to get started, timing was enormously important."
Maple Trade, though, needed time to make a decision. On December 17, 2003, the firm cut its loan offer of $3 million back to $1.5 million.
Culver wrote an e-mail to Janovich, which said, in part, "We were making it up as we went along."
"I got the impression that the business would grow dramatically," Culver later testified. "Because this was a new source . . . there was probably lots of opportunity."
Two months passed, but Kalisch was not idle. He continued to travel to Brazil and buy diamonds.
Already owning 20 percent of possible profits and the option of becoming a direct partner in the scheme, Culver and Maple Trade insisted then that Kalisch add additional guarantees that he could pay them back.
The main remaining asset Kalisch owned was the sprawling apartment at 2 East 12th Street. He and his wife had slowly purchased and combined three ground-floor apartments into one, giving it a value of well over $500,000. He added the apartment as loan collateral, but he hid this fact from his wife.
"The financial pressure of starting this business required me to lease out the apartment so I could take a cheaper place and live off the income," he said in his affidavit. "Despite the pressure I was under, I certainly did not intend to defraud anyone. If I intended to keep secrets from anyone, it was an intent to keep a secret from my wife that I had signed papers concerning our apartment."
With his apartment on the line, and a major North American company on the hook, Kalisch headed south to move diamonds with his own hands.
Then, on January 12, 2004, Kalisch suffered a setback. He had just flown back from Brazil with another shipment mined on the Cinta Larga lands. He had been in Brazil for six days.
In his suitcase, he carried 1,170 carats of rough or uncut diamonds inside a plastic bag sealed with tape. At John F. Kennedy Airport, he declared the diamonds during a customs inspection, and claimed they had a value of $165,000. He also turned over a piece of paper that claimed to "guarantee" that the diamonds had been purchased from "legitimate sources not involved in funding conflict."
Inspectors, though, seized the diamonds because Kalisch was not carrying a so-called Kimberley Process Certificate, which formally vouches that the gems are not "conflict diamonds"—a phrase for black-market gems used to finance civil war, largely in Africa.
The Kimberley certification process was created in 2002 to prevent export and import of rough diamonds that have not been vetted by a national authority. Congress adopted the measure as part of the Clean Diamond Trade Act in 2003.
Brazil began officially complying with the Kimberley Process Certificate in 2003, records show. But the system has been plagued with problems. "It is a system fraught with systematic leaks and failures in oversight, a system that encourages smuggling and contraband," writes Ian Smillie, a researcher with Partnership Africa Canada (PAC), a nonprofit that has written several reports on the illegal diamond trade. "Despite the government's good intentions, it actually hides the source of Brazil's diamonds."
Initially, Kalisch tried to persuade customs inspectors to allow him to take the diamonds back to Brazil, or on to Antwerp without formally entering the United States. The inspectors refused.
Subsequently, federal prosecutors in Brooklyn filed a lawsuit to force Kalisch to forfeit the diamonds. In a case that took more than three years to resolve, Kalisch fought to reclaim the diamonds.
Kalisch argued in court papers that he had declared the gems in good faith, and the diamonds were from Brazil—not Africa—and, as a result, did not need a Kimberley Certificate. He also claimed he had done his best to determine whether a certificate was needed, and concluded that it was not.
He also argued successfully that his deposition in the forfeiture case should be sealed, because it would expose him to criminal prosecution. Federal prosecutor Laura Mantell argued against that motion, because Kalisch had already voluntarily disclosed damaging information in bankruptcy court.
In 2008, a federal judge ruled for the government. The diamonds were donated to the Smithsonian Institution for research. But Kalisch was never charged in criminal court.
As the forfeiture case began winding its way through the courts, Kalisch returned to Brazil to obtain another shipment of diamonds from the Cinta Larga lands.
But Kalisch did not tell Maple Trade about the seizure of the diamonds at Kennedy. And he became increasingly desperate to get the seed money from the company. He was deeply in debt and unable to pay for more diamonds. The couple had already moved out of their beloved apartment, and were sub-letting it to make enough money to pay their bills. He wrote Janovich to say he was "drowning in quicksand."
On February 3, 2004, responding to unease from another Maple Trade employee, a company official named Pablo Marino wrote, "No offense, but we're all pretty grown up here. . . . I thought that we all understood what the key of the transaction is, and I absolutely think we are trying to do everything to mitigate the risk."
Two weeks later, Maple Trade entered into a loan agreement for up to $1.5 million with Kalisch, and provided $950,000 for the venture.
On February 24, Kalisch sent a $600,000 invoice to Maple Trade for the sale of 2,400 carats of diamonds to a São Paulo–based seller named Lapidacao Estrela Do Sul. Kalisch admitted later in court that that venture never existed.
Instead, Kalisch gave the money to Glikas and Suarez, presumably to buy more diamonds from the Cinta Larga. That money later disappeared.
In March 2004, Maple Trade advanced Kalisch $400,000 to pay off his Merrill Lynch loan used to buy the mining equipment for the Indians. The company loaned him another $500,000 to buy rough diamonds.
Kalisch wired the money to Brazil and then flew to São Paulo to pick up the diamonds. Almost as soon as he arrived in the country, however, his partner, Glikas, and 15 other people were arrested in connection with the diamond smuggling ring. In addition to Glikas, a Cinta Larga leader, three police officers, and several officials from the Bureau of Indian Affairs were arrested on illegal mining and money-laundering charges.
News coverage referred to the group as "one of Brazil's top diamond smuggling rings." The investigation took a year and involved 100 police officers. Federal police uncovered one transaction in which Glikas sold $1.85 million worth of diamonds to a Belgian buyer.
"We've got the leaders of the gang, those that had the funds to finance the crime," Brazilian Federal Police Agent Marcos Pereira in Rondônia told reporters at the time. Cassol, the governor of Rondônia—the state that includes the reservation—also fell under investigation for his ties to illegal mining on the reserve.
Kalisch himself somehow escaped arrest. He called Mayra and initially told her he couldn't return because of business delays, but finally admitted there had been arrests, she testified.
"He hadn't been arrested, but he was nervous to leave the country," she testified. "I was kind of sick, you know, and nervous."
He went into hiding in Brazil for several weeks, fearing both arrest and for his life, court records show. He finally slipped out of the country and returned to New York. The diamond shipment that he had flown to Brazil to collect had disappeared. It was another huge setback, but, initially, he hid word of the arrests from Maple Trade.
Then the venture finally fell apart. On April 7, 2004, a Cinta Larga band attacked a large group of prospectors with firearms, clubs, spears, and arrows. At least 29 garimpeiros were massacred, many of whom appeared to have been tortured or mutilated and buried in shallow graves. Some of the victims had their stomachs sliced open.
Authorities charged 28 Indians in connection with the attack, but the case has dragged on for years over the question of whether the semiautonomous indigenous people should be bound to Brazilian law.
Shawn Gerald Blore, a journalist who has written extensively about diamond smuggling and the Cinta Larga, reported in 2004 that right before the attack, a miner was overheard threatening to shoot Indians. Three days after the attack, miners dragged a Cinta Larga teacher, tied him to a post, and threatened to kill him. Not long after that, miners fatally shot a 14-year-old Indian youth.
Blore alleges in the article that Cassol, the governor of Rondônia, was involved in illegal diamond mining, along with the mayor of Espigão d'Oeste, the hard-edged boomtown nearest to the Cinta Larga lands.
Blore says Cassol promised to improve the roads, schools, and clinics in exchange for moving 20 diamond-extracting machines onto the reservation. When the Indians refused, he pulled the roadblocks and allowed the miners back on the land, sparking the conflict, Blore says.
A Cinta Larga chief told the Associated Press days after the killings that some members of the tribe were furious that the miners had ignored their demands that they leave the reservation.
"We told them we didn't want them here, and they kept coming back," the chief said. He went on to deny any link to the incident, but said, "We are warriors."
After the massacre, Kalisch finally told Janovich about the arrests that had happened earlier. Janovich warned him not to mention it to Culver. But after the killings, and the ensuing international media coverage, Kalisch felt he could no longer hide the truth. Some—including a bankruptcy court judge who looked into the matter later—believed that Kalisch's mining operation helped trigger the mass killings, which was reported internationally.
"There's no way to keep a lid on this any longer," Kalisch told Janovich.
Even so, Maple Trade subsequently advanced Kalisch another $500,000, including $150,000 to pay off Janovich's bridge loan.
It was not long after that the company declared Kalisch in default of the loans, and moved to seize the couple's East 12th Street apartment. The diamond mining, the bribes, and the horrible massacre of the garimpeiros had finally come home to roost in the lovely million-dollar East Village domicile.
The Kalisches declared bankruptcy. Their filing listed $2 million in debts. And so began the years of litigation that wound its way through five New York courthouses.
In 2005, Mayra Kalisch sued in state court, arguing that Maple Trade shouldn't receive the fruits of an illegal venture, and sought a court injunction against the seizing of the apartment. But a state judge dismissed the lawsuit, and a higher state court dismissed their appeal. The conflict over diamonds moved to the federal bankruptcy court.
In July 2008, the bankruptcy trial took place in the august Custom House building in the Financial District. Once again, the issue was whether Maple Trade was aware of the illegal nature of the Kalisch venture.
Kalisch was in a tricky situation: He knew that the only way to hold on to his apartment was to argue that what he had leveraged it for was a highly unlawful enterprise—and one Maple Trade should have known was illegal when it lent him the money to engage in it.
In essence, instead of arguing that he should not be punished because his intentions were good, Kalisch needed to argue that he should not be punished because his intentions were completely dishonest.
An astonished Judge James M. Peck was clearly struck by the irregularities of the case: "It is hard to imagine that any rational witness under these circumstances would make up something so personally incriminating if it were not mostly the truth," he would write later.
When Culver took the stand, he admitted he had been aware that the venture was acquiring diamonds from "indigenous people." But he denied he knew that trading with the Indians without government approval was illegal. He also testified that he did not personally make an effort to check whether the scheme was legal.
"We were not financing an illegal diamond venture," Culver testified. "Our interest was to finance a diamond importer and hopefully make a substantial yield out of it."
Kalisch's lawyer, Max Folkenflik, argued that Kalisch's business plan was peppered with "red flags," including the fact that Kalisch had a silent partner who was a government employee.
Curiously, neither side called on the two people who would presumably know quite a bit about how much Maple Trade knew of the diamond scheme: Pablo Marino, a Maple Trade employee, and Victor Janovich, the man who brought Culver and Kalisch together. One more intriguing note: A significant number of Maple Trade files disappeared or were mistakenly thrown away.
Judge Peck, in the end, found in favor of Maple Trade, noting that the "ethically challenged" Kalisch's testimony about the diamond venture was credible, but his claims that Maple Trade knew the scheme was illegal were not credible. Maple Trade was focused on the collateral—the apartment—and "had no duty to inquire any further than it did."
"The only sound conclusion is that Marco finessed the subject, made incomplete, vague, and evasive disclosures and kept the truth to himself," Judge Peck wrote.
If anything, Kalisch was too good at smuggling—even his own business partners didn't know what he was up to. That, at least, was the conclusion of the court.
Meanwhile, the Kalisches tried a second strategy to hold on to the apartment: While Marco Kalisch may be liable for the debt, his wife, Mayra, was not. And she still had an ownership interest in the apartment. So, in a contorted legal maneuver, Mayra sued not only Maple Trade, but her husband as well. That tactic also failed.
The Maple Trade lawyers saw the litigation in part as a delaying tactic. The Kalisches were still banking $9,000 a month in rent from the 2 East 12th Street apartment, and they would continue to earn it as long as the court case went on.
In the years since the massacre, the clashes between the prospectors and the Indians have not abated. Nor has the government been able to come up with a system to mine the diamonds without controversy.
In 2006, Brazilian authorities suspended diamond exports for six months because of rampant smuggling and corruption, says Smillie, the PAC researcher who has written several reports on the issue. "They revamped their system, fired a lot of people, and arrested some, but just how good the controls are is unknown," he says. "One of their solutions was to have the prospectors register online, but a lot of them are illiterate and don't have computers."
Venezuela, PAC reported, declined in 2007 to comply with the Kimberley certification process. The PAC reported that Venezuelan diamonds were being openly mined and smuggled into Guyana and Brazil, even though the government claimed not to have exported any diamonds.
In December 2007, Cinta Larga Indians took a United Nations human rights official and three other people hostage to once again demand better government services and that the government expel miners from their lands. The hostages were held for four days and released.
Blore, the journalist, says federal police are stationed on roads leading to the reserve: Mining continues, but on a smaller level. "Miners bring in supplies after dark, and have trails through the bush to bring out the diamonds," he says.
A bill currently winding its way through Brazilian Congress would sell licenses to mining companies to exploit the diamond reserves. In exchange, the tribe would receive a small payment. The Indians oppose this bill, Blore says. "More militant tribes have given notice that the bill is a formula for violence and conflict, but Brazil is still very much an elitist government-knows-best kind of place," he says. "Actual discussions with actual stakeholders are not something the government knows how to do."
As for Kalisch's former partners, arrested in the 2004 raids—well, the Brazilian justice system seems to move extremely slowly.
An article in the magazine Carta Capital reported in mid-2008 that Glikas was assisting the federal police in its investigation. Cassol, the governor of Rondônia, was being probed for vote buying and illegal diamond trafficking. Blore says an indictment is unlikely because the supreme court has never convicted a sitting politician of corruption.
Last year, Mayra Kalisch took one last shot at preventing Maple Trade from selling the apartment at auction. Having lost in federal bankruptcy court, she appealed to civil court and U.S. District Judge Kevin Castel.
Her lawyer, David Wander, argued that Maple Trade knew about the illegal nature of the business, and shouldn't profit from those acts. Doing so, he wrote, would "contradict established precedents by the Supreme Court and over 100 years of jurisprudence of the New York State courts."
Maple Trade's lawyers, Mark Frankel and Tom Berry, argued that Maple Trade was simply unaware of the illegality of the venture. The Kalisches, they claimed, just didn't want to part with the apartment: "This is the latest chapter of the Kalisches' four-year effort to avoid the consequences of Mr. Kalisch's loss of the money he borrowed from Maple."
But Wander retorted that Maple Trade's claim that they weren't aware of the illegality of the venture was "not based in reality": "What legitimate business would secretly hire a government official to transport $400,000 worth of diamonds from an Indian reservation to an airport?" he wondered.
In the end, Judge Castel refused toprevent the sale of the apartment, anddismissed the appeal.
So ended the case of the diamond merchant who would be king. And what is Kalisch doing now? Well, he's out of the diamond business, according to a friend of his who still works at the old Diamond Exchange on West 47th Street. He's working with special-needs children, the friend said.
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