Christie's auctioned a $62 million diamond. Was it stolen?

Ownership of the Princie Diamond, cut from a mine in India several centuries ago, is the subject of a civil trial about to begin in New York. Photo / Christie's via The New York Times

The diamond was bought by a member of the Qatari royal family, but the descendants of an Italian politician say it belongs to them. They have sued the auction house and its client, a gems dealer.

This is the story of one of those diamonds so exquisite it was given a cute little name: the Princie.

Yet despite its diminutive moniker, the Princie is a big stone — 34.65 carats — that sparkles in the cheerful colour of a flamingo and is valued at US$40 million ($62 million). It was last known to be packed away in a storage facility in Switzerland, where it was sent by a member of the Qatari royal family after he bought it.

But is that where it should be?

That question is the subject of a trial about to begin this week in New York Supreme Court, where an Italian family has accused Christie's, the auction house, of selling the diamond despite accusations that it had been stolen.

The descendants of a once-powerful Italian senator said the diamond is rightfully theirs, and that their stepbrother absconded with it after his mother died. But the stepbrother has insisted the diamond was his to sell. Christie's said the family members have no proof the diamond belongs to them and that, regardless, its client, who bought it from the stepbrother, had every right to sell the stone.

It is a case sprinkled with royalty and rich people, the nuances of Italian law and with questions about the responsibilities of auction houses when there is a dispute about who owns a sale item.

The diamond, cut from the Golconda mines in India, made its first recorded appearance in the 1700s as part of the collection of the Nizam of Hyderabad, an Indian monarch. The plaintiffs said the diamond, about the size of a Cerignola olive, was bought by Senator Renato Angiolillo at Van Cleef & Arpels in 1960, the same year he married his second wife, Maria Girani Angiolillo. It had been named "Princie" in honor of the 14-year-old Prince of Baroda, a former state of India, who came to a party that year at the Van Cleef & Arpels store in Paris, along with his mother.

The senator was a man who liked — and could afford — nice things. He owned fabulous real estate, one of Italy's largest newspapers, Il Tempo, and a stable of thoroughbred horses. A family member said he used to carry small diamonds around in his pocket so he could fiddle with them throughout the day.

He died in 1973, and here, things get complicated. Under Italian law at the time, as court documents explain, all of his possessions should have gone to his children, not his spouse, unless they were explicitly left to her. His will said his wife should keep their home near the Spanish Steps in Rome and its lavish furnishings. But nothing else was mentioned. So the lawsuit argues that the rest of the estate, including the diamond, belongs to his descendants; his surviving son and four grandchildren are the plaintiffs.

But the auction house and its co-defendants said that the diamond, set in a ring, was a gift to his wife and so was owned by her, not her husband, when he died. And even if the transfer of ownership was not official, the defendants argue, the way she kept control of the ring in the decades that followed his death made it legally hers.

No one disputes that she held onto the diamond for more than 35 years after she became his widow, but the senator's descendants said it should have been turned over to them after she died as part of their inheritance.

Instead, the whereabouts of the diamond became something of a mystery. Amedeo Angiolillo — the senator's remaining son — tried to contact his stepbrother, Marco Milella, to ask for the diamond back. He had no luck. Eventually, Milella responded through a lawyer who said, in essence: Diamond? What diamond?

"My client has informed me that he is unaware of the existence of the assets of the type that you have indicated," the lawyer said.

Italian authorities opened a criminal investigation into the missing diamond and some other expensive jewellery . In 2013, they raided the home of Milella and that of his girlfriend and found some of it: a necklace and earrings from Van Cleef & Arpels. They didn't find the diamond.

Milella told authorities that he had legally inherited the jewellery, including the diamond, from his mother, according to court records, and — in a bit of a departure from the defendants' argument — that she had inherited it from her husband.

But by that point, the diamond was long gone. He had sold it years earlier for nearly $20 million to a prominent gems dealer in Switzerland named David Gol.

The Italian courts dismissed the claims against Milella on statute of limitations grounds. (He is not a defendant in the current lawsuit, but Gol is, along with several others involved in the transactions.)

Gol, who has said he believes Milella had clear title to the diamond, then worked with Christie's to sell it as part of a jewellery auction in 2013.

Emily Reisbaum, a lawyer for the gems dealer, said that the Angiolillos have no evidence that the senator owned the diamond "when he died, that they inherited it, or that they owned it at any time thereafter."

The buyer, who paid US$39.3 million ($61.2 million), was Sheikh Jassim Bin Abdulaziz al-Thani of Qatar. His wife, Sheikha al Mayassa bint Hamad bin Khalifa al-Thani, chairwoman of the Qatar Museums, is one of the most influential people in the art world, spending a fortune on building a top-flight collection for the country, basically from scratch.

The plaintiffs have argued that Christie's should not have gone forward with the sale because the auction house understood that there had been an Italian investigation into whether the diamond had been stolen. In an email cited in the court records, a Christie's official said that she told a representative of the sheikh — Guy Bennett, an art adviser — about the ownership dispute. In court papers, Bennett said Christie's told him there was a legal issue, but said before the sale that it had been resolved.

The plaintiffs said they did not know where the diamond was until shortly before the Christie's auction and that they approached Christie's then, saying the diamond was most likely theirs. But Christie's threatened to file suit if the sale was blocked, and the plaintiffs did not try to stop the auction.

According to court documents, the auction house spent at least US$120,000 ($187,000) to investigate the provenance of the diamond, and they said they found no evidence the senator's children had inherited it. Indeed, the defendants have argued in court that his descendants did not declare that they had inherited the diamond on their taxes (though a judge noted that no evidence has been presented to show that Maria Girani Angiolillo or Milella paid taxes on it either). The auction house has argued that its client bought the gem in Switzerland, where property can be acquired legally if a good-faith purchaser is not aware of any accusations of theft.

But a New York judge ruled that Christie's could not claim the benefit of Swiss law, saying that the sale had been administered in New York by a New York auction house and that the diamond had had "de minimis" contacts with Switzerland.

Scott Balber, a lawyer who is representing the Angiolillos, said Christie's was more concerned with using Swiss law to argue that its client could safely sell the diamond rather than to establish who really owned it.

He said he believes that Christie's "objective was not to find out the truth as to who owned the diamond, but to create a basis to argue that it could take advantage of a legal defense under Swiss law."

Christie's described the matter as an "inheritance dispute among family members."

"Prior to the 2013 auction of the diamond," Christie's said in a statement, "the two main representatives of the family expressly withdrew any objection to the sale; then two years after the successful sale, they sued to claim inheritance rights to the proceeds without providing any significant new information to support a title claim."

The plaintiffs said that Christie's earned a commission of more than US$3.8 million ($5.9 million). The auction house said it took in less than US$1 million ($1.5 million).

Written by: Elizabeth A. Harris

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