Patek Philippe

Hello darma,

Are you referring to this Fred Cuellar as your source?

from the Houston Business Journal

The high-profile owner of Diamond Cutters International has been convicted of first degree felony theft for taking a group of investors for more than $1 million.

A jury last week sentenced jeweler Fred Cuellar to 30 days in jail, 10 years probation and 600 hours of community service. As part of the verdict, he was ordered to repay $100,000 a year for 10 years to 70 investors involved in the attempted purchase of two diamonds.

Cuellar is appealing the verdict, which he calls unjust.

The case could take years to make its way through the court system. In the meantime, Cuellar is out on bond, and his punishment has been put on hold. He returned to work this week for the first time in a couple of months.

The publicity-prone businessman is known for designing the official championship rings for the Dallas Cowboys football team and the last three National Hockey League championship teams. When Cuellar was first trying to break into the championship ring business, he made free rings for the 1994 Houston Rockets championship basketball team.

Cuellar also designed a $1 million Rubik's Cube made of jewels that landed him a spot on the "NBC Today" show.

Seventy investors, most from the Houston area, put up anywhere from $100 to $50,000 each in 1995 to finance the purchase of two large diamonds. The sale fell through, and Cuellar didn't return the money.

Beyond that, however, prosecutors and Cuellar disagree over exactly what took place. Harry Lawrence, the Harris County assistant district attorney who tried Cuellar's case, says Cuellar stole the money that was collected between March 1995 and June 1995.

According to Lawrence, Cuellar was seeking to sell a 51.5-carat diamond and an 88.9-carat diamond that he said were owned by the Royal Saudi family. Investors believed Cuellar was also putting up a large sum of his own money to acquire the gems.

Lawrence also says Cuellar, Michael McDonald and others solicited investors in the transaction. McDonald, who is now self-employed as a commercial loan broker in Houston, was the main investor in the deal. Cuellar met personally with only eight of the investors, according to Lawrence.

The money was raised as a deposit on the two large diamonds, the prosecutor says, and when the investors failed to raise the full amount of money needed to purchase the diamonds, Cuellar refused to refund their money.

The DA's office began investigating the transaction in April 1996. In August 1996, investigators raided Cuellar's office and home to confiscate bank records and other documents.

Lawrence says evidence showed that the two large diamonds were actually owned by New York-based William Goldberg Diamond Corp., not the Royal Saudi family as Cuellar had told investors. And Lawrence says the $1 million raised to buy the diamonds was spent by Cuellar.

For his part, Cuellar tells a far different story about what happened in 1995. First and foremost, he says he committed no crime.

Cuellar says McDonald approached him three years ago for help in locating and purchasing two large diamonds. At the time, McDonald was working as a stock broker and had a client who wanted to buy the diamonds.

Cuellar says he told McDonald he would have to put up a 5 percent, non-refundable deposit when the diamonds were located. The purchase price for both diamonds was $13.4 million, so the deposit was $670,000.

When Cuellar found the diamonds in New York, he says McDonald was unable to come up with the rest of the purchase price, even though he had brought in additional investors. He asked Cuellar to find another buyer for the gems. And he paid Cuellar to go to Saudi Arabia and try to sell the diamonds to the royal family, who weren't interested.

An investor later complained to the Harris County District Attorney's office that Cuellar had not earned the money he collected as a non-refundable deposit. But Cuellar says it was a sale, not an investment. And a non-refundable deposit is simply non-refundable.

"What I did was legally right to do," says Cuellar, who adds that he spent $500,000 on his defense.

If the investors wanted their money back, they should have sought restitution in civil court, not criminal court, says Cuellar, who called no defense witnesses during his trial.

In addition to his appeal, Cuellar says he is considering his legal options for retribution.

"The only victim in all of this was me," Cuellar says.