Dealing in Diamonds: A Case Study of a Multimillion-Dollar Investment Fraud and Ponzi Scheme

It all began when Federal Bureau of Investigation (FBI) Special Agent Sarah Halleran received a complaint through the Internet Crime Complaint Center (IC3), a public hub for reporting crime. The complaint was from a financial advisor against Adam Lowe, the owner of a Florida company called The Diamond Desk Corporation. Lowe claimed to be a supplier of natural, fancy-colored diamonds, but an FBI investigation team that included Halleran, forensic accountant Lavderim Hysa, CFE, CPA and Assistant U.S. Attorney Marc Anton revealed him to be the mastermind of a complex multi-million dollar investment and Ponzi scheme. 

The $13 million scheme involved over 100 investors. Lowe supplied the diamonds, Murray Todd Petersen sold them and Scott Schafer appraised them. Hysa, Halleran and Anton gave session attendees an overview of the case and how their teams came together to conduct the complex criminal investigation. 

The Defendants 

Like most Ponzi schemes, the defendants betrayed their clients’ trust. Lowe claimed he had connections in the international market and lied about knowing Israeli Prime Minister Benjamin Netanyahu and declining a dinner with Henry Kissinger. Petersen was a former army colonel and pastor. Many members of his congregation ended up becoming victims of the scheme because they trusted him.  

Their Promises 

Hysa, Halleran and Anton showed a marketing video uncovered during the investigation of Petersen, promising clients unique diamonds tailored to their individual ideas of “love, luxury and legacy.” The defendants told investors they could purchase fancy-colored diamonds from their alleged preexisting inventory and convinced them to hold onto them before selling them to make a profit. They promised investors interest rates as high as 27%. 

Misrepresentations 

Anton explained that “proving a fraud case based on investment is an uphill battle.” He said that in order to prove a fraud occurred, you need to “look for material misrepresentation.” The defendants told individuals their diamond investments were safe and secure. They also said the diamonds were worth more than what investors paid for them and that they came directly from diamond mines. Hysa, Halleran and Anton revealed that Schafer often didn’t look at the diamonds when he appraised them. 

Collaborative Investigation 

As Hysa asserted, “numbers don’t lie.” Halleran found more victims through the IC3 system that had interacted with Petersen, leading the team to investigate him as well as Lowe. They had about 75 victim interviews. The FBI performed a case assessment and collected evidence through direct emails and text messages from Petersen demonstrating his misrepresentations. They followed the money trail through bank accounts and commission payments summaries to help prove the charges: Conspiracy to commit wire fraud, wire fraud, mail fraud and money laundering.  

The FBI collaborated with FINRA to investigate and sanction Petersen and with the SEC to charge Lowe with investment fraud. Hysa, Halleran and Anton said Petersen’s trial involved almost a dozen civilian witnesses, and he was convicted of conspiracy to commit wire fraud and wire fraud.  

Real Victims 

Hysa, Halleran and Anton concluded their session with a reminder of the vulnerability of victims in restitution and the real loss they experience, both financially and emotionally. They said the impact on victims is why they do what they do. It motivates them to investigate and pursue justice, and everyone on the team plays an important role. “We all make an impact,” said Hysa.