“King of Diamonds” Lev Leviev just won a $209 million judgement against his former business partners in a case that was so bitterly contested it resulted in death threats and a smear campaign to the arbitrator initially assigned to decide the case.
A Manhattan federal judge on Tuesday ordered Leviev’s former partners, diamond dealers Julius Klein Group, to fork over $142 million to Leviev’s LGC USA Holdings in addition to more than $66 million that has already been paid.
The award, which may be record in size for the industry, comes after years of feuding between Leviev and Julius Klein Group in federal and state court over how to split their businesses.
The dispute initially went to arbitration, but it quickly turned ugly, including allegations that the arbitrator assigned to decide the case was not fit to do the job.
Among the dirt brought out against the arbitrator was evidence that he had been convicted of tax fraud and other offenses tied to a scheme to export diamonds from Belgium while actually reselling them on the black market, according to Tuesday’s ruling by Judge Jesse Furman.
The arbitrator also received death threats, Judge Furman said.
“The Leviev Group will take all steps available, including seizing corporate and individual assets, to collect this judgment after the lengthy legal procedures now have resulted in this final ruling,” said lawyer Charles Michael, who represented Leviev in the dispute.
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