Foreign dealers in Tucson

Jewelry Discussion
1

Hey all Orchidians

May we have debate on the foreign dealers coming here to Tucson and
other shows, and they caring “two hoots” about our national local
laws and getting away with it. The involvement of finances are
enormous. Some of these dealers accept only cash. The implications
are just enormous. How do we find out who this money going to? being
used for?

How can we make the playing feild leveled for both of them, our
local dealers and these foreign dealers? Why we are not equal before
the law?

Who are the enforcing authorities?

Thanks in advance
Anil

2

Anil,

Unless you are dealing with an established dealer you have dealt
with before you will never know what the money is being used for.

What you should do to protect yourself is never buy without an
invoice describing what you purchased along with a statement that
all items are conflict free.

At this point all dealers should be marking their invoices in this
manner except they are not. I recently purchased some stones from
Rio and the invoice did not have a statement concerning this issue.

Good Luck
Greg DeMark
email: greg@demarkjewelry.com
Website: www.demarkjewelry.com
Custom Jewelry - Handmade Jewelry - Antique Jewelry

3

If I read the original post correctly, Anil is seeking not to protect
himself from unscrupulous dealers as a buyer, but to compel dealers
at the Tucson shows to conform to the various statutes and
regulations governing the gem trade so that conducting his own
business in a manner both legal and ethical does not place him at a
competitive disadvantage with those who do not respect such
constraints.

His question begs another question- exactly what suspect behaviors
are being observed, and what laws or regulations are they believed to
violate? It is necessary to know which law or regulation is being
breached in order to identify the agency responsible for regulatory
oversight and the mechanism of enforcement. It is most likely not
just a matter of the Patriot Act. For example, insistence on “cash
only,” while by no means illegal in its own right, is broadly
suggestive of an intent to avoid declaration of income and thus avoid
taxation, making it a potential issue of tax fraud as well as a
narrower area of concern under the Patriot Act.

Lee Einer
Dos Manos Jewelry
http://www.dosmanosjewelry.com

4

I am shocked! How did one get from selling gems to tax evasion and
the Patriot Act!

Is every foreigner present in the US suspect? If there are tax
issues, take it to the proper authorities and quit speculating.

Gloria F

5 
Unless you are dealing with an established dealer you have dealt
with before you will never know what the money is being used for.
What you should do to protect yourself is never buy without an
invoice describing what you purchased along with a statement that
all items are conflict free.

How do you ever know where your money will end up? I’m sure there
are still quite a number of respected US citizens who are covertly
financing the ongoing war in Northern Ireland and other such
long-standing hotspots who would never dream of publicising the fact.
I can’t for the life of me see how a statement on an invoice can
guarantee that your money will be kept ‘clean’ - truth has never been
a strong point with terrorists or their supporters. In their minds
they are not ‘terrorists’ but ‘freedom fighters’ on the side of right
as they see it and so the same is likely to apply to the people who
finance the conflicts. Both sides see the other as antagonists and
I’m sure there are those on this list who would see the financing of
the US government’s escapades in Iraq through taxes as wrong.

Best Wishes,
Ian
Ian W. Wright
Sheffield UK

6 
    For example, insistence on "cash only," while by no means
illegal in its own right, is broadly suggestive of an intent to
avoid declaration of income and thus avoid taxation, making it a
potential issue of tax fraud as well as a narrower area of concern
under the Patriot Act.

Possibly the folks you’re talking about in Tucson are big dealers,
but my tiny little concern can’t afford to take anything but cash.
I can’t even afford the risk of a bounced check. I hope to set up a
Paypal vendors account (I have a buyers account) but I’m not sure
this is even possible for me - I think you have to have a credit
card to set up a vendors account, and I haven’t had a credit card
for 15 years.

In my case, “cash only” is a sign of how little margin I have for
error, not an attempt to defraud anybody. Just to keep from BEING
defrauded…

Sojourner

7

Ian,

    Unless you are dealing with an established dealer you have
dealt with before you will never know what the money is being used
for. What you should do to protect yourself is never buy without an
invoice describing what you purchased along with a statement that
all items are conflict free.

The statement I referred to on the invoice is not intended to make
sure where the money is going to. It is intended to protect the
buyer from the new laws that will soon be in place in the U.S.

Could this money still be used to finance wars, black markets and
elicit activities? Of course it can. The idea is to protect yourself
here in the U.S the best you can so you are not connected with any
illegal activity.

Greg DeMark
email: greg@demarkjewelry.com
Website: www.demarkjewelry.com
Custom Jewelry - Handmade Jewelry - Antique Jewelry

8

All,

While we’re still on the string of this topic I would like to point
out a few thoughts that have been bothering me. One is the assertion
that taking cash is a symptom of tax evasion. In actuality, cash is
the preferred method of dealing in Tucson primarily because a lot of
people have been burned by n.s.f. checks and/or stolen identity
credit cards. And, even with cash, there has been an occaisional
problem with counterfeit currency. Add this to the fact that many of
the dealers get ripped off by light fingered thieves and you have a
chary bunch of dealers who have to be extremely cautious. I wonder
also about how many buyers are using the Tucson shows as money
laundering venues for drug dealers.

Some of you have suggested also that the foreign dealers have taken
advantage of the rules by not observing the same proprieties as
domestic dealers. On the other hand, those who would not observe the
rules that are designed to create a level playing field can just as
easily be domestic dealers seeking advantage over their local
competitors.

Foreign dealers must be viewed as being much of the spice that gives
Tucson its special flavor. How else could we have such product
diversity ? Another thing that jumps out to me is the difficulty
that foreign dealers have, not only in getting themselves and their
goods to the show, but also in having to accomodate the
idiosyncracies of doing business in a foreign venue. They are not
likely to have a local bank account, have a good grasp of English,
know the intracacies of our commercial laws, etc. etc. Then, of
course, they have to get here ! International travel nowadays is a
pain in the rear.

I wonder if anyone has ever suggested that there might be a special
effort to encourage and assist foreign participants ? I would hate to
see the Tucson shows deteriorate into a highly introverted local
affair which doesn’t grow and change and has little diversity.

Ron Mills, Mills Gem Co. Los Osos, Ca.

9 
   I am shocked!  How did one get from selling gems to tax evasion
and the Patriot Act!  Is every foreigner present in the US suspect?
 If there are tax issues, take it to the proper authorities and
quit speculating.

No, this is not an off-topic xenophobic rant. It is in response to a
post by Anil Gupta, himself a dealer operating in Tucson. Mr. Gupta
strives to conform to US laws and regulations governing his trade,
but finds himself disadvantaged by unfair competition from foreign
dealers who fly in and out for the Tucson and who by his report
often do not conform to US law and regulation. You may read the
original post here-

This is not foreigner-bashing, Gloria, nor is it in any way
mean-spirited. Mr. Gupta should not suffer economic hardship or
unfair competition because he seeks to obey the law while others
flout it. His question is legitimate. As part of his question, he
wished to know what agency to contact to report bad or suspect
behavior. The answer to this question is in part dependent on what
laws are likely being broken, hence the observation about cash-only
sales and simple tax evasion vs possible money laundering.

The answers to Mr. Gupta’s questions do not just impact on gem
dealers. The Patriot Act now classifies any of us whose yearly
purchases of precious metals and gemstones total over $50,000 as
“financial institutions,” and requires that if we do fall within
this classification we have written policies and procedures in place
to avoid purchases which serve to launder money for terrorist
organizations. Consequently, an open and candid discussion of
suspect dealer practices and the appropriate response is not only
on-topic but quite timely.

So that is how we get from selling gems to tax evasion and the
Patriot Act. It is unfortunate that we need not travel far to get
from the one to the other.

Lee Einer
Dos Manos Jewelry
http://www.dosmanosjewelry.com

10 
  I am shocked!  How did one get from selling gems to tax evasion
and the Patriot Act! Is every foreigner present in the US suspect? 
If there are tax issues, take it to the proper authorities and
quit speculating.

I believe part of the issue is, it is hard to compete on a proverbial
level playing field, when dealers from overseas take cash and might
not be paying taxes. Not too hard to make an assumption from prices
that a U.S. dealer can’t compete with.

Evidently, us Americans have a strange economic plan for the future,
sending our money and jobs overseas.

11 
 I think you have to have a credit card to set up a vendors
account, and I haven't had a credit card for 15 years. >>

I don’t have a credit card, either. But I do have a card from my
bank that can be used as a credit card; I “pay” for something with
the card, tell the clerk it’s “credit”, I get the receipt to sign,
and then 2 or 3 days later, the transaction is processed by my bank
and the money is withdrawn from my account. I have an account from
Paypal and can send and receive money with it; I’m not sure if a
“vendor’s account” is something difrerent.

Now, I lost all my credit cards through bankruptcy many years ago.
I’m pretty sure I’ve passed the magic 10 year point and could get
another now if I wanted. I’ve been thinking about it. Despite the
occasional inconvenience, I love not having a credit card.

I know a woman who operates a very successful vintage clothing
store. In talking to her about her business and how she runs it, I
was so happy to hear that she doesn’t accept credit cards! Just cash
and checks! It proves to me that it is at least possible to conduct
business without accepting credit.

Christine in Littleton, Massachusetts

12

Dear All !

If there is a concern about accepting checks, money orders or bank
drafts, what do ‘we’ Canadians do in the future??? I know that if I
accept one of the above. I “MUST” wait 20 working days to have the
banking system clear each check. My very own bank manager said even
one of these “money order” and “bank drafts” are no longer
trustworthy !!..:>(

Ever hear of the words? …“photo-copy, fraud”. How many folks carry
wads of money in their pockets to these shows? How many of us have
connections with "PayPal "? If I am to sell an item next year, of
great literary and technical value, how should a client pay me?

I need to know!..Gerry!

13

Hello Greg,

In compliance with the Kimberly Accord and other conflict-free
diamonds guidelines, Rio Grande maintains assurances in written form
from all our diamond suppliers that the diamonds they are providing
us are conflict-free.

It’s true that up to this point we have not provided disclaimers on
every invoice to our customers. Our focus had been to establish
correct documentation from our vendors and maintain it.
Diamond-buying customers have requested letters from us to keep in
their files, which we are happy to provide immediately.

Clearly it’s time to put a disclaimer on all our invoices. I’m
sorry if you were made uncomfortable by the lack of disclaimer in
your recent experience. If you would like a letter from us to keep
on file, please contact me off-line and I’ll be happy to make sure
you get one. Otherwise, we will now decide how to get the disclaimer
on all the appropriate invoices – and not on the rest of them! –
and start making it easier for our customers.

Thank you,
Andrea Hill
Chief Executive Officer
The Bell Group
7500 Bluewater Road NW
Albuquerque, NM 87121
505.839.3033 ph
505.839.3032 fx
andrea.hill@riogrande.com

14

Dear Mr. Mills

“Foreign Dealers” I agree are the spice of the Tucson, and they are
not PER SE the problems.

The problem is their non-following of our laws, and their taking dis
advantage of the non-compliance.

I do empathise and sympathize with their ordeal and trouble of
making it through to the show, but you still have, will always have
all the problems, that you cited even if we had all the dealers that
were from foreign country and in midst of them you were alone a
domestic dealer.

One thing has nothing to do with the other. The problems you cited
are in no way, shape or form are related to absence or presence of
foreign dealers.

What we are primarily concerned is that their following, complying,
adherence, acceptance and respecting our local laws of our land.

The laws have a purpose and an aim to achieve.

As per your argument we can empty our jails, because they are also
undergoing tremendous hardships in there.

I do not know how many from Orchidland would agree that it is
incumbent upon the show organisers to make sure that the exhibitors
do comply with the local laws.

When they ask me my credentials for exhibiting they make sure that I
am eligible to exibhit, but I do not think the foreign dealers are
held to such high standards, one of the reasons could be that they
(organizers) get away with charging them double the amount for the
booth.

What we are debating is the anamoly in compliance of the law, and
this non-compliance has multi-faceted and far reaching consequences
for ALL of us including the very dealers who do not
comply.

I am not anti or pro any business or dealer or immigrant or local. I
am pro - business

15 
  It proves to me that it is at least possible to conduct business
without accepting credit.

I resisted accepting credit cards at retail shows for years. Since I
hardly ever had people change their minds about buying when they
found I could not take their card, I didn’t think it was harming me.
But, as my prices have increased, I felt I had to start taking
credit. Personally, I have no doubt that people are more willing to
buy, and to spend more, when they can use credit cards. I hate the
cost, but I truly believe that unless you are staying under $100 per
item, it really is a handicap not to accept credit.

–Noel

16

Mr. Gupta-

We are currently discussing this issue in a very broad and general
manner. I believe we would be better able to offer constructive
comment if you would describe the specific behaviors which you
observed at the Tucson show and which you believe to be in violation
of US law and/or regulation.

Lee Einer
Dos Manos Jewelry
http://www.dosmanosjewelry.com

17

Dear Anonymous,

You write that you have no quarrel with foreign dealers…you
simply resent their “non compliance with the law” The inference is
that foreigners regularly disobey the law and that domestic dealers
always uphold the law. I guess you haven’t noticed the national
creative accounting debacle ! In any group of merchants, regardless
of their citizenship, there will be many who skirt the law and some
who flaunt it. It has little to do with where they come from.

Another problem that I have with your communication is that nowhere
do you ever specify what laws are being broken. Presumably the
collection of taxes is one arena of fudging, but if you think that
domestic dealers always report every sale you are sadly mistaken.
Large corporatuons regularly seek every conceivable crack and
loophole so that advantage may be gained. Lawyers and accountants
are often essentially tax avoidance professionals.

If you think that foreign dealers are flaunting our laws and that
these actions are confined primarily to a specific group of people
then let us bring it out in the open and find ways to deal with it.
However, let us be quite sure that we are not castigating legitimate
competitors in order to maximise our own opportunities. A level
playing field has just as much to do with enforcement of laws as is
does with the rules of the game; ergo, let’s apply enforcement to
all who are playing the game !

Ron Mills, Mills
Gem Co. Los Osos, Ca.

18

Gerry,

Sorry I have not yet met you. I recently heard an ad for American
Express. I really do appreciate my long association with them. I
carry their card with great respect, and am unhappy when it is not
accepted for some sort of “higher charge” excuse.

I hear they are starting an American Express cash card. Instead of
carrying a large amount of currency when traveling, convert it into
this card and use it as cash when purchasing. The ad says if stolen,
the amount held will be protected and returned to you.

As an aside, I have recently had an ongoing battle with HP. I now
have two. Both items were purchased with my AMEX card. Although HP
refuses to help with a printer they warned me may malfunction as it
is now out of warranty, Amex will cover that under their automatic
extended warranty beyond the manufacturers.

I found this out by contacting them with another problem with an
iPods I had bought for Christmas gifts for my grandsons. One has
malfunctioned and HP is not helpful at all, the other was stolen and
would have been covered by AMEX product liability clause, except it
was stolen from my grandson’s car.

In chatting with AMEX I found out how well protected I am by them.
You can be sure next time I travel I will carry their cash card. It
sounds like wonderful protection.

Terrie