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Jewelry-Fraud Scheme Netted $570,000 in Goods from Retailers and Wholesalers

The culprit was sentenced to seven years, eight months in prison.

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ATLANTA – An Atlanta man has been sentenced for defrauding more than a dozen diamond and jewelry dealers and wholesalers nationwide.

Over the course of his scheme, Cory Smith attempted to defraud thes companies of nearly $1.2 million in diamonds and jewelry and successfully obtained nearly $570,000 in merchandise, according to a press release from the U.S. Attorney’s Office for the Northern District of Georgia.

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Smith, 32, was sentenced to seven years, eight months in prison to be followed by three years of supervised release, and ordered to pay restitution of $567,669.70. He was convicted of interstate transportation of stolen property on May 13 after he pleaded guilty.

“Smith repeatedly exploited the trust of diamond and jewelry dealers to defraud them,” said U.S. Attorney Byung J. “BJay” Pak. “Identifying Smith took the collective effort and cooperation of the victim retailers and wholesalers, commercial shippers, and local and federal law enforcement, and I commend their work.”

“A lot of hard working citizens were victimized by Smith in his elaborate scheme that cost them over a million dollars,” said Special Agent in Charge of FBI Atlanta Chris Hacker. “His sentencing should serve as a warning that no matter how elaborate a scheme, investigating FBI agents are determined to protect American citizens against such crimes.”

“I am proud of the hard work and dedication that the Knox County Sheriff’s Office Deputies and detectives along with federal agents exemplified during this investigation. Make no mistake, the Knox County Sheriff’s Office will always cooperate with state and federal authorities to bring criminals to justice,” said Knox County Sheriff Tom Spangler.

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Pak, the charges and other information presented in court: Beginning by November 2016 and continuing until September 2018, Smith and others conspired to defraud diamond and jewelry retailers and wholesalers by taking advantage of the fact that many transactions in the industry are done by memo financing.

Smith was alleged to have contacted jewelry and diamond suppliers across the U.S. and falsely representing that he was employed or affiliated with a well-known or established diamond or jewelry dealer. Smith would then direct that the merchandise in question be sent to an actual jewelry store in Georgia or elsewhere and typically provide the actual address of the detailer/retailer he was falsely purporting to represent. After receiving the tracking information for a particular shipment, Smith would then contact the shipper (i.e., UPS, FedEx) and have the shipment re-routed to a residential address or a FedEx or UPS facility or retail store near where the actual diamond/jewelry dealer he was falsely purporting to represent was located. Smith would thereafter arrange to have “runners” pick-up the shipment from the FedEx or UPS location or residential address.

Smith was alleged to have facilitated this process by making travel arrangements for the runners to travel from Atlanta to out-of-state locations, including North Carolina, Oklahoma, South Carolina, Tennessee and Virginia, to pick up the packages containing the diamonds/jewelry. Over the course of the nearly two-year scheme, Smith defrauded more than a dozen diamond and jewelry wholesalers and retailers nationwide.

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