Below is the first of five installments of The New York Inquirer's exclusive investigation into the largest Diamond District in the United States: 47th Street in Manhattan. In the face of a challenged industry, the utterly unique city block is changing rapidly, and the results of our legwork show that not everything emerging is glittering, glamorous or good.

Read also part one, part two, part three, part four and part five of the investigation.

by Andrew Bast found at nyinquirer

On a cold February day in 2004, Freddy Castro Garzon and Claudia Guerro walked up 47th Street, the heart of New York City’s Diamond District. Windowed storefronts, glistening with gold, silver and precious stones, line the block. Some are dark, empty and dusty. And a few glare green and blue with neon signs that read, “We Buy We Buy.”

Castro and Guerro climbed the stairs to Kim’s Jewelry. At a metal gate, they rang the buzzer. To the left, the store seemed barren with a single glass display case. Hurriedly, Nam Pyo Kim ushered them inside, unlocked an inconspicuous coffee-colored wooden door and the three disappeared into a small room.

Jewelry boxes stacked to the ceiling. A table, a chair and a giant safe left the three little room to work. Kim sat, and Castro unloaded his pockets. Wrapped in paper towels were clear, plastic baggies filled with rings, necklaces, gold and diamonds. On a black jeweler’s mat, Kim studied the wares. He peered through a loupe, sized up the diamonds and consulted the curved line of his price chart. He weighed the gold. He punched numbers into his calculator. And then he made an offer.

Guerro translated from English into Spanish for Castro. This wasn’t the first time he’d done business with Kim. They haggled. Kim disappeared, and when he rushed back into the room, he dropped two $10,000 stacks of cash on the table.

“Get out,” Kim told them.

They returned to Kim’s Jewelry the next week and every week after for the next three months; the scene repeated like a looped film. The reality was: Castro and Guerro had engineered an ingenious scheme for knocking over jewelry stores in suburban malls up and down the eastern seaboard. Kim was their fence, and during those months, together they moved more than $1 million worth of jewelry through the Diamond District, and it was all stolen.

The Diamond District occupies an utterly unique stretch of Manhattan asphalt. The block between Fifth and Sixth Avenues is said to be home to more than 2,600 jewelry businesses. Nine out of ten diamonds in the U.S. are first touched by a hand on 47th Street. It’s the largest hub in the country for diamond trading, and what’s more, along with Ramat Gan, Israel and Antwerp, Belgium, one of the three main international hubs.

During the day, undercover security agents canvas the street. U.S. Postal Service trucks arrive with armed guards. To an outsider, everyone seems to be constantly shaking hands with everyone else. On a short walk from one end to the other, at least twenty people will approach you. Pretty women will wave through windows, welcoming you into their stores. All of them ask what they can sell you, and more often than not, they ask what you want to sell them.

At five o’clock, the glitter and shimmer of the storefront windows disappear. Dealers pack up their shops and vacate their storefronts, leaving behind only a lamp and an empty display case. The street fills with lines of limousines and brigades of armored trucks. At the corner on Fifth Avenue, crowds of bearded Hasidic Jewish men in black hats load onto yellow school buses. Everyone heads home to rest, as do the diamonds.

Only, 47th Street is home to much more.

The fact is: the Diamond District plays just as instrumental a role in the criminal side of the jewelry industry as it does in the side laced with dreams, romance and the ubiquitous marketing tag line, “A Diamond Is Forever.” Finding a fence there is no more difficult than slowly strolling and answering a few questions from a nameless solicitor. It’s the biggest Laundromat for stolen jewelry in North America. What’s more, the liquidity of gold and diamonds have for decades made it a place to turn for international money laundering, and, of late, the consequences have turned deadly.

Regardless, few will speak on the record about the black market that has long thrived in the country’s largest diamond-trading outpost. And much to the detriment of New York’s future as a hub in the jewelry industry, little is being done to combat it.

Check Part II Diamond 47th for the story of the changing diamond industry . . .

(Neon photo from flickr and Diamond District streetlight photo from flickr.)