Birmingham jeweler sentenced for $12M diamond fraud scheme

A Birmingham jewelry buyer, auctioneer, and appraiser is facing 151 months in prison for carrying out his scheme to defraud a client out of $12 million.

Joseph Gregory Dumouchelle, 61, was sentenced July 28 in federal court after pleading guilty to devising and executing the plan.

According to court records, Dumouchelle owned Joseph Dumouchelle Fine and Estate Jewelry Buyers, Sellers, Appraisers, and Auctioneers, a company operating in Michigan and throughout the United States. At his guilty plea hearing, it was made known that in late 2018 Dumouchelle began negotiating the purchase and sale of a diamond known as the Yellow Rose. He proposed the diamond as an investment opportunity to a client, claiming it could be purchased for $12 million and quickly sold for substantially more. The client was lulled into a wire transfer of $12 million to what he was told was the seller's account, but actually Dumouchelle gave the client wire transfer directions to his own account. Dumouchelle then withdrew the funds and used them to pay personal and business expenses and debts.

As part of his plea agreement, Dumouchelle's sentencing guidelines and restitution amount were to be determined by losses incurred by all the victims of his fraud scheme. Judge Mark Goldsmith determined the total fraud loss was $25,308, 216 and restitution owed was $25,206, 401. The court also ordered Dumouchelle to forfeit $12 million for the fraud.

Once he's released from prison, Dumouchelle will have three years of supervised release.

"White collar criminals may use sophisticated methods and apparently legitimate businesses, but their crimes amount to nothing more than lying to get money," U.S. Attorney Dawn Ison stated in a news release. "Victims were often targeted because of their involvement in the jewelry investment, purchase, and auction trade, or were family members and friends of Dumouchelle. Victims were lulled into believing Dumouchelle's false promises because he held himself out to be an expert with valuable connections that would provide them substantial profits."

James Tarasca, special agent in charge of the FBI's Detroit Division, also weighed in, stating: "This defendant defrauded investors by convincing them he was buying and selling rare jewelry for big profits. Instead of actually conducting those transactions, Dumouchelle used the victims' money to help maintain his expensive lifestyle."

Tarasca credited the investigation's success to "a strong partnership between the Birmingham Police Department and the FBI's Detroit Metropolitan Identity Theft and Financial Crimes Task Force."

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