US judge issues restraining order in fight over giant emerald now held in Los Angeles

LOS ANGELES, Calif. – The fight over ownership of a giant 752-pound emerald isn’t over.

On Thursday, a federal court in Washington D.C. issued a restraining order that prevents anyone from transferring, selling or otherwise disposing of the so-called “Bahia Emerald” until a Brazilian criminal case involving it is settled.

The emerald was pulled from a mine in the jungles of Bahia state. It is one of the world’s largest uncut emeralds with about 180,000 carats.

Brazil contends the gem cluster — which has been appraised at $372 million — was illegally mined and smuggled out of the country. It has criminal proceedings pending against two alleged smugglers and contends the emerald is subject to forfeiture under Brazilian law.

The restraining order stands until the Brazilian case ends and any forfeiture judgment is presented to the U.S. court. It also requires the Los Angeles County Sheriff’s Department — which has been storing the emerald since 2008 — to keep custody.

The United States has a mutual legal assistance treaty with Brazil and the order was sought by the U.S. Department of Justice.

The restraining order comes about a month after Los Angeles County Superior Court Michael Johnson tentatively ruled that FM Holdings Inc. had established clear title to the gem.

That followed six years and millions of dollars in legal and other costs. At the time, Andrew J. Spielberger, an attorney for FM Holdings, said the ruling was expected to be finalized in a month or two. Spielberger said nobody was expected to object to the decision because other claimants had either lost in court or settled with the holding company.

Johnson earlier had refused Brazil’s request to dismiss or stay the proceedings.

An emailed request to Spielberger seeking comment on the federal restraining order was not immediately returned Thursday. However, the lawyer previously said that his clients were willing to work with Brazil but would want to be paid for the unique specimen.

The emerald came into the U.S. in early 2005 and was kept in San Jose, California. It was the subject of a torturous series of agreements that shifted ownership to various people and involved various moneymaking schemes.

The emerald was said to have been stored at a warehouse in New Orleans that was flooded during Hurricane Katrina, then supposedly was stolen from another warehouse in the Los Angeles suburb of El Monte. It was sighted briefly in Idaho before gem trader Kit Morrison, now a partner in FM Holdings, handed it over to Los Angeles County sheriff’s officials in 2008 in Las Vegas, where he was trying to sell it.