Everyone and Brazil Fight Over 840-Pound Emerald

A Los Angeles judge said today he will move forward with a trial to establish whether members of an investment group are the rightful owners of the 840-pound Bahia emerald, but he first must deal with a recent claim to the gem made by the nation of Brazil.

The cluster, mined in Brazil in 2001, has roughly 180,000 carats of emeralds in nine gigantic crystals, one about as big around as a man’s leg. At one point, as many as eight parties laid claim to the find.

Los Angeles Superior Court Judge Michael Johnson said he will begin hearing testimony on FM Holdings’ claims on May 11. The stage for the non-jury trial was set after Johnson previously tossed out the claims of two other men competing for the emerald, Anthony Thomas and Mark Downie.

Downie’s lawyers brought a motion for reconsideration of Johnson’s Oct. 14 ruling that the gem investor has no interest in the Bahia emerald. But the judge today denied the motion and upheld his previous decision that Downie can only seek about $81,000 to compensate him for a January 2005 loan made to another group to ship the gem to the U.S.

Downie’s lawyer, Steven Haney, told Johnson he may appeal.

The Sheriff’s Department has custody of the emerald, which is estimated to be worth as much as $400 million.

In court papers filed in September, the nation of Brazil asked Johnson to dismiss all remaining claims among U.S. parties to the emerald and allow the South American country to try and have it returned.

“The emerald is literally a piece of Brazil that belongs to Brazil and in Brazil,” lawyers for the country state in their court papers.

The lawyers for Brazil argue that the gem should be put to cultural and scientific use, including allowing it to be examined by researchers and students. They also say it should be displayed at the National Museum of the Federal University of Rio de Janiero, the largest museum of natural anthropological history in Latin America.

A hearing on the motion by the nation of Brazil is scheduled Jan. 28.

FM Holdings is comprised of Kit Morrison, Todd Armstrong and Jerry Ferrara, who say they paid for a shipment of diamonds and took the emerald as collateral in case the diamonds were not delivered.

The case was initially filed by miner Kenneth Conetto in January 2009. Thomas filed his court papers as a claimant to the emerald three months later. Conetto later reached a settlement with FM Holdings.

• City News Service
• Photo: 840-pound Bahia emerald
• Photo Credit: Youtube Screengrab