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The virtual miner - investigation

28 april 2017

ATTENTION! This journalistic investigation is directly related to the interview given to Rough&Polished by World of Diamonds, and we strongly recommend reading both texts to have a complete impression.

An opportunity to conduct journalistic investigation is a rare stroke of luck in the work of any journalist. People engaged in illegal activities usually behave very carefully, and to detect them is a big problem. Nevertheless, sometimes even scammers make a blunder. As a rule, they are let down either by greed and thirst for glory, or by pathological confidence in the stupidity of others. Today we will show you just such a case.

There are many diamond mining companies in the world. There are companies operating in Canada and Russia, in Africa and Australia. There are public companies that are traded on the stock exchange, and there are small-scale artisanal miners, who are panning gravel for diamonds using iron sieves. There are companies that comply with all the trade rules, and there are companies that violate the requirements of the Kimberley Process.

But we were lucky to discover a completely new kind of diamond mining company, and we are proud to present it to you. Ladies and gentlemen, meet a virtual miner. World of Diamonds led by Mr. Karan Tilani is the owner of a very large, but, unfortunately, non-existent diamond field in Russia.

We first discovered the website of this company last year, but at the time did not pay much attention to it, considering it an inept joke. However, it was sheer underestimation on our part: as it turns out the ‘joke’ has acquired an unprecedented sway in recent months. In April, several trading companies received “business propositions” from World of Diamonds - obviously, they were offered “stones” from that non-existent diamond field. And the company itself has given a dozen interviews in recent months, including the proposal to give an interview to Rough&Polished.

We consider it our duty to warn the market about this questionable activity. It's terrible to think how many illegal deals can be pulled off under the cover of a website describing non-existent projects and hiding behind a large number of laudatory publications in the media.

Below is a long enough narrative with a number of screenshots. We have checked all the information about World of Diamonds that we could find - from the photos on their website to the incorporation data on legal entities in this country, and tried to make our explanations as detailed as possible, so as not to leave any doubts.

Part 1. Photoshop and plagiarism.

Formerly, in order to position oneself as a solid company, it was necessary to rent an office and at least hire a secretary to answer phone calls and give smiles to people at the reception. Times have changed, and today any acquaintance with a company begins with its website. Well, it's even convenient: one may avoid spending money on renting an office and just upload a few webpages with photos, thus turning a businessperson.

There is one stumbling block on this way, however: if you are making a website of a production company, you have to show photos of its assets. But such a delicate situation can be circumvented.

This is the picture we see on the main page of World of Diamonds’ website. It depicts the "Tarskaya mine," which WOD calls its main asset. Impressive, isn’t it? It is immediately evident that you are dealing with serious people having rich experience in mining.

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Source: The "official" website of World of Diamonds.

You bet! The experience of the miners at this mine is really rich, because in fact the photo shows the Diavik diamond field in Canada, which is being developed by Dominion Diamonds and Rio Tinto. Dear staff of Dominion and Rio, how do you like the news that you, as it turns out, are working in Russia? Or the news that someone is misusing your photos?

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In this photo, you see the Diavik open-pit mines.

Let’s take another photo from the WOD website - this time, it is obviously depicting a workers village or something like that.

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Source: The "official" website of World of Diamonds.

Unlike the diamond field, the village on the photograph cannot be identified by eye. All workers settlements are similar to each other. But for such situations, major search engines (including Google, to whose "services" we have resorted) have introduced an image search. You upload a picture and immediately see where it was published before and to whom it belongs.

And this workers village belongs ...

analyt_27042017_4.jpg 

... belongs to a well-known photobank, which sells stock photos for money. By the way, the photo is not at all related to diamond mining, depicting just the "exterior of a plant".

Let's try one more photo. Here, apparently, we are shown the process of mining diamond ore at the Tarskaya mine.

analyt_27042017_5x.jpg

Source: The “official” website of World of Diamonds.

Whereas Google is somehow convinced that this photo belongs to Phillips & Stevens, a Canada-based land surveying company.

analyt_27042017_6.jpg

Shall we have another try? This is also a photo of an operating production asset belonging to WOD.

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Source: The "official" website of World of Diamonds.

Or not to WOD?

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World of Diamonds has many beautiful photos. I especially like this one.

analyt_27042017_9.jpg

Source: The "official" website of World of Diamonds.

I hope all readers understand that this image is not real, as it is only the result of Photoshop witchcraft. However, it is an instance of quite mediocre witchcraft, I should say - many high school students would have coped better. To start with, the open pit (which, it would seem, is in the foreground) is disproportionately small in comparison with the buildings that are seen in the distance. Never mind the buildings – it does not match the bushes, which are supposedly growing on its sides! These growing bushes are higher than the height of one tier of the spiral road inside the open pit. And the dumper creeping up the road is exactly the size of an ant.

However, we should not find fault with the buildings - they are not real and are cut from some other photos. Actually, the only thing that exists on the original image is the hill, snow-covered grass and the house on the right side. All the rest is carefully added by the hands of a novice photoshopper from Latvia (yes, you can also get a country record from the source file). Gentlemen, if you paid him money for his work, then you spent it for naught.

In general, we tried very hard to find at least one real-production photo on the World of Diamonds website. We tried indeed, but could not. All of them are either stolen from other diamond mining companies or taken from publicly available photobanks.

Part 2. The non-existent mine.

However, the use of other people's photos does not prove anything by itself. No one knows, but what if the website of World of Diamonds is simply maintained by lazy and incompetent contractors? Instead of using original images on this website, they did not bother much and stole photos from the Internet. This, unfortunately, also happens. To accuse people of fraud, one should have more substantial arguments.

According to the information on the website of World of Diamonds and in their interviews, the company's main activity is carried on in the Srednekansky District of the Magadan Oblast (Magadan Region) in Russia. According to World of Diamonds, they have here the Tarskaya diamond mine, which was discovered in 2006 and is being developed since 2010. There are 6 kimberlite pipes (out of the existing 38!!!) with open pits dug to the depth of 100-490 meters, from which the company has already extracted 18.7 million tons of ore yielding about 35.4 million carats of diamonds, the WOD website says.

Let's start with a simple thing, typing in Russian “полезные ископаемые Магаданской области” (which stands for "minerals of the Magadan Oblast") in the search bar. This is a truly resource-rich area. According to the official information on the website of the Magadan Oblast government, there are "reserves of gold, silver, tin, coal, molybdenum, cobalt, tungsten, lead and zinc along with significant manifestations of copper and iron." There is not a word about diamonds in this long list.

In their interviews, the representatives of World of Diamonds often repeat that typical of Russian companies, the Group has not sought public exposure. This is an excellent argument for throwing dust in the eyes of foreigners, but, unfortunately, it does not correspond to reality. Despite the fact that many people abroad consider the Russian market closed and not completely civilized, in practice it is quite transparent. Under Russian laws, it is impossible to conduct any kind of business activity in this country without being registered with appropriate official agencies and without disclosing information about such activity. If, of course, we are talking about legal activity, and not about a criminal group.

It is especially true for diamonds. In Russia, it is impossible to own diamond deposits (the more so, large ones) without anyone knowing about it. The Russian Federal Agency for Subsoil Use (Rosnedra) regularly publishes and updates the list of subsoil plots of federal significance (which include all diamond deposits). In the list containing 373 items, there is not a single deposit, site or anomaly named "Tarskaya" (“Тарская” in Russian) or any of its variations. Moreover, there are only 5 sites in the Magadan Oblast having the status of "federal subsoil plots" and all of them are gold bearing. The list of Rosnedra does not contain a single diamond manifestation in the territory of the Magadan Oblast.

To make the picture complete, let's turn to the well-known service of Google Maps.

This is how the Nyurbinskaya and Botuobinskaya diamond pipes developed by ALROSA in the Republic of Sakha (Yakutia) look from above. Purposefully, we did not take huge diamond mines like Mir and Udachny for this demonstration. The Nyurbinskaya diamond pipes are much smaller in size, but they are still clearly visible. Looking from the satellite, it is difficult to confuse a diamond pipe with something else.

analyt_27042017_10.jpg

And now using the Google Maps service, let's have a look at the Srednekansky District of the Magadan Oblast. Specifically, let us inspect the right bank of the Kolyma River in the place where it turns to the left - it is exactly there, where, according to the map on the WOD website, there are “6 kimberlite pipes” of the Tarskaya diamond field.

analyt_27042017_11.jpg

There is nothing like a diamond open pit. The area is dotted with mountains and does not give any indication of the ongoing mining of minerals. Any reader can easily open Google Maps and scrutinize the whole Srednekansky District and even the entire Magadan Oblast - and will fail to find there anything like a diamond mining operation.

For those who have any doubts, we would like to bring to their notice the following. In response to the request from Rough&Polished, Liliya Lazareva (Лилия Лазарева), the official spokesperson of the Magadan Oblast Government said that the authorities of this region "do not know such an enterprise” and added that “diamonds in the Magadan Oblast have never been mined." You are free to draw your conclusions yourself.

Those for whom words are not enough may be convinced by numbers. In their interview, WOD claim that they produce about 7 million carats of diamonds annually.

According to the Ministry of Finance of Russia (which oversees the country's diamond industry), the country produced 41.9 million carats of diamonds in 2015 and a similar figure is given in the Kimberley Process report. Of this volume, ALROSA produced 38.3 million carats and Grib Diamonds about 2 million carats. And where are the "7 million carats" produced by WOD?

Part 3. " The Boss of It All."

Honestly, until the last moment we cherished a hope that an interview with World of Diamonds would clarify something. Despite the obvious facts, it was difficult enough to realize that right under the nose of everybody there is an evident forgery, which for some reason no one sees. We believed that we could communicate live with someone from WOD’s management and understand the essence of this company’s business.

Instead of communicating live with their CEO, our correspondent received written answers to her questions. And a photo of Boris Voronov, CEO of World of Diamonds. Here it is:

analyt_27042017_12.jpg

In fact, even with the naked eye you can see that something is wrong with this photograph. The strange blurred background making your dizzy and a very sharp, contrasting figure on it with a strange face whose right side is shaved and the left side is not.

But let's refrain from guessing about the man’s appearance. For such cases, there is the Error Level Analysis (ELA) of photographs. This program analyzes the areas with different compression levels on the photo and based on this draws a conclusion about whether any sections of the photo were added new elements or edited. This is a very convenient service, recently gaining momentum to combat fake news.

The results of Error Level Analysis can be seen here. Judging by the analysis, the man’s figure is inserted into the photo of the interior, and the figure itself was also subjected to a significant correction – its entire face (especially the eyes), neck, tie and the contour of hands were edited.

And if you turn to the already familiar search for the original source of photo in Google, you can find the man himself. Meet Patrick Mathiew, CEO of Armacell.

Only for the photo in the interior of World of Diamonds, they gave him other eyes (without much respect for the proportions and their arrangement on the face), edited his mouth (finally spoiling the location of shadows in the photo), inserted another tie, and at the same time drew new hands, since the original was only a chest photo. Incidentally, the fact that the hands are "borrowed," is very noticeable in the photo: the color of the skin on these hands is much darker compared with the face color.

So, for the publication of their interview World of Diamonds provided a photograph of a non-existent person, saying it was their CEO. I have exactly two options: either Chief Executive Officer Boris Voronov is hiding and does not want to be photographed, or Boris Voronov, CEO of World of Diamonds does not exist in this world at all.

This caused big questions about the management of World of Diamonds. We checked all the people listed on the company's website in the sections "Senior Management" and "Board of Directors". None of them has profiles in social networks or LinkedIn. Which is strange in itself - if they are such well-known professionals in their field, as it is described on the WOD website, why are they not known to anyone and do not have a network of business contacts?

We also checked all these people through the SPARK system (Russia's integrated data base on legal entities and their management) and did not find any of them mentioned on the WOD website. The only coincidence was Sergey Anosov (he is listed as a member of the board of directors of WOD). However, we cannot be sure that we found the right Sergey Anosov and not his namesake (there is no data on his birth or patronymic on the WOD website). But if we are not mistaken, and this is the right person, the result will surprise you. The individual entrepreneur, as well as OOO TZK incorporated under the name of Sergey Anosov do have licenses for the trade in diamonds and precious stones, their processing, production and sale of jewelry. And in general, Sergey Valentinovich Anosov is mentioned in an unofficial (and sarcastic) "Rating of Russia's Greatest Entrepreneurs" as a man who established about 300 shell companies and was the CEO of more than 150 of them.

At the same time, we also checked ООО «Мир Бриллиантов», which WOD mentioned in an interview with Rough&Polished. According to Boris Voronov (it is hard to say to what extent you can believe a person existing as a drawing), ООО «Мир Бриллиантов» was established in 2001 and is the backbone of the whole World of Diamonds Group.

Unfortunately, the SPARK database has pay access, so instead of a link, we have to submit a screenshot.

analyt_27042017_13.jpg

According to Russia’s integrated register of legal entities, there is only one company bearing the name of ООО «Мир Бриллиантов» in this country. It was incorporated in 2013 and not in 2001. Its CEO is not Boris Voronov, but Roman Murashov (though, most likely, he is also a "dummy," because under his name, besides this company, there are incorporated a dozen of others selling everything from construction materials to bed-clothes). The company is said to have a staff of up to 5 people (and what about the 9,000 employees mentioned on the World of Diamonds website??) and the authorized capital of 100,000 rubles (which is the average salary of one resident of the Magadan Oblast for 2 months).

Eventually, we could find neither any real legal entity, nor almost anyone of the World of Diamonds management. Almost nobody, except one person. This person is called Karan Tilani.

analyt_27042017_14.jpg

On the WOD website, he is named the head of the company for the Asian market, while in social networks and LinkedIn, he is mentioned as the director of the entire World of Diamonds Group. He is the only person whose photos can be found on the Internet in publications about WOD (and he is indeed often photographed). Actually, a letter asking for an interview came to us on behalf of his assistant, Elena Garbellini (who, judging by LinkedIn, lives in Romania, and not in Russia or any other "diamond" country). By the way, the request from the "Russian" company for this interview was not directed to the Moscow office of Rough&Polished, but to our correspondent in India.

Lars von Trier has a wonderful comedy, "The Boss of It All." In it, a flaccid business owner comes up with an imaginary "big boss from America" in order to dump all unpopular decisions on him and thus avoid unpleasant conversations with employees and eventually any responsibility for his own actions. On behalf of this ghostly boss, he fired people, made deals, and even corresponded with counterparts.

I have a big suspicion that World of Diamonds does not just resort to a similar scheme, but even improved it. Why conduct real business, if you can invent a diamond mine in a far-away place of snowy Russia, about which no one knows anything? For greater substantiality, it is possible to invent a row of "directors", and even give interviews on their behalf in various publications. And all this is quite easy to do alone, or well, with the help of a very small group of people.

Part 4. Creating added value

In their numerous interviews, World of Diamonds and Karan Tilani emerge before us as ambassadors of the world of luxury, and I would even say, "extra-luxury." For example, they are widely promoting a swizzle stick graced with diamonds worth $ 1 million - but it will only go to someone ready to buy from their partner, Dreammaker, an exclusive expensive travel tour for $ 14 million. Another project is a ring with a blue diamond worth $ 2 million, named after actress Jane Seymour - which, however, is not sold separately, but is included in the "most expensive dinner in the world." In all these projects, WOD appears as the company that extracted those diamonds, cut them and set them in jewelry pieces. And its representatives in all their interviews say that they try to confine their work to exclusive orders only and never deal with mass retail.

We have already found out that World of Diamonds does not mine anything. It remains only to find out what it is trading in. And their interview was really helpful to understand this. Here's what WOD told Rough&Polished about their business activities:

“We streamline operations with some of our affiliate companies where the lower value diamonds we mine get manufactured and traded through them, while the higher value diamonds evolving from their mines passes through us. <…> World of Diamonds Group specializes in supplying polished diamonds as we have the capacity and expertise to cut, polish and distribute finished stones. <…> Polishing diamonds are a value added service to our clients, and so we do not have plans to offer rough diamonds.”

It is really very convenient to trade polished diamonds, because unlike rough diamonds, polished diamonds do not require a bunch of documents and KP certificates. If you are deft enough, you can buy several polished diamonds in one corner of the globe, and the next day resell them to jewelers in quite another part of the world – this time saying they are your own independently mined product. Do you still have some doubts? But we have a website, and there are publications about our company in the Internet! An article floating on the Internet, too, you know, gives some added value to a diamond.

Nevertheless, if you position yourself as a Russian diamond mining company, you will probably need to have some quantity of Russian rough diamonds with KP certificates stating that the "country of their origin is Russia" - just to show them to your counterparts for more authenticity. And if you do not have your own mining operation, then you will have to buy these diamonds somewhere. Do you follow my thought?

When our correspondent Aruna Gaitonde sent questions for the interview, she asked only about the company's production activities. However, World of Diamonds, on their own initiative, added another question to the interview, which apparently seemed to them important. This one:

"World of Diamonds Group only sought visibility through internationalization in early 2013, about the time Alrosa went public. Both mining consortiums have interests in Africa and WOD Group’s registered entity, OOO «Мир Бриллиантов» takes after the famous “Мир” (Mir) mine owned by Alrosa. WOD Group seems to have resource sharing arrangements with a leading Russian diamond mining company and Russian media noted that some of WOD’s key employees have been spotted at Alrosa’s offices. How is World of Diamonds Group related to Alrosa?"

As a person working in the “Russian media,” I can say with confidence that no one ever wrote about "WOD’s key employees spotted at Alrosa’s offices." It is your egotism that betrays you, gentlemen: even with all their interest to Alrosa, Russian media do not keep vigil at the door to the office of this company, looking out for all visitors. And even more so, a visiting foreigner would not cause any excitement among the local public: overseas customers come to the company every month by hundreds.

Nevertheless, World of Diamonds deemed it necessary to mention this and disown any connection with the company, although in previous interviews they never raised this issue. I have only one assumption: it is most likely that quite recently some market stakeholders saw the gentlemen from World of Diamonds at a trading session of ALROSA, buying diamonds.

However, if WOD in engaged in reselling rough and polished diamonds produced by ALROSA, this is not the worst option. WOD has time and again repeated that it has "interests in Africa" - and it means that under the guise of diamonds from their Tarskaya mine they can sell, for example, rough coming from Zimbabwe, or some other country that does not comply with the KP requirements at all. And Karan Tilani in his recent interviews spoke very warmly about synthetic diamonds and confirmed that World of Diamonds was producing them as well, although in small volumes. I wonder if the diamond set into the mentioned $2 million ring is natural?

One of the market stakeholders told us about his little experience in communicating with World of Diamonds. According to him, the sale offers made by WOD looked, to put it mildly, very strange and questionable for a serious member of the diamond market, and were safely thrown into the basket. However, such an offer to buy an exclusive polished diamond may seem attractive to people who do not understand the market well enough - for example, for novice jewelers or for wealthy people who want to buy an exclusive piece of jewelry. Under the cover of media support, one can sell anything to such people.

P.S.

While preparing this article, I had to give up journalistic ethics not allowing World of Diamonds to comment on the results of my investigation. First, I am almost sure that they would have answered "there is some mistake", or "we are a small private company, so nobody knows about our business." Secondly and much more importantly, I did not want to scare them away - probably, having received such a request, World of Diamonds would immediately delete their website and hide for a while. However, my task is first of all to warn diamond market players about the danger and show them this danger (by the way, if WOD still decides to delete their website, we have screenshots of its pages).

However, we will certainly listen and publish all the arguments of Mr. Tilani in his defense (although something tells me that he will not have any desire to enter into a dialogue). If he wants, Mr. Tilani can even file a claim against Rough&Polished for damaging his business reputation. We will eagerly respond to his offer to meet in court, because according to the laws of this country, the actions of World of Diamonds in terms of "conscious distortion of the truth" are qualified as fraud.

P.P.S.

Frankly, the current situation turns me into bewilderment and mild horror.

Requesting for an interview, World of Diamonds sent a list of publications about their company to Rough&Polished. Among others, this list also mentions large and usually trustworthy media, like Forbes, Mining Global and even some diamond industry portals. According to these media, World of Diamonds is "one of the world’s largest privately held diamond corporations." Dear journalists, what's the matter with you? Why did it not occur to anyone to check the information on this company? Okay, you do not have correspondents in Russia. But why not send a request to those who work in Russia? Russian media, or at least to the press service of ALROSA, which, perhaps, could give you some answer. It is this journalistic negligence - posting press releases without paying attention to their content or publishing articles for money – that helps people like World of Diamonds to conduct their dishonest business.

Elena Levina for Rough&Polished

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