Events & Awards

From Conclave: JVC Shares Anti-Money Laundering Program Tips

Events & AwardsSep 22, 2021

From Conclave: JVC Shares Anti-Money Laundering Program Tips

Plus, jeweler Melissa Quick of Steve Quick Jeweler details what it was like to go through an AML audit.

20210922_Money Laundering.jpg
During a presentation at AGS Conclave in Dallas last week, Tiffany Stevens and Sara Yood of the Jewelers Vigilance Committee and Melissa Quick of Steve Quick Jeweler shared tips on how jewelers can set up and maintain an anti-money laundering program.
Dallas— Attorneys from the Jewelers Vigilance Committee headed to Dallas last week to school AGS Conclave attendees on the do’s and don’ts of creating an anti-money laundering program.

From scouring supplier lists to trade-in exceptions, JVC’s Tiffany Stevens and Sara Yood delved into the details.

And Melissa Quick of Steve Quick Jeweler in Chicago shared her personal experience of being audited as a cautionary tale for other jewelers.

Here are a few important things to keep in mind, per the presentation.

Know the law and if it applies to your business.

Money laundering is the process of making ill-gotten gains appear legal and any jeweler is liable to get tangled in its web.

Anti-money laundering (AML) laws were first enacted in the United States by the Bank Secrecy Act of 1970 and were later expanded to include jewelers by the USA Patriot Act of 2001.

The regulations apply to jewelers who purchase and sell $50,000 or more in “covered goods,” which refer to goods made of precious metal, precious gems, and jewels and jewelry that derive at least 50 percent of their value from those precious materials.

However, retailers who only buy from sellers who are compliant with U.S. anti-money laundering laws do not need to have an AML program in place.

If a retailer buys from a foreign supplier, estate sales, auction houses, government-sponsored sales, or from the public (not including trade-ins), then an AML program should be put in place.

(Regarding trade-ins, AML rules apply if a trade-in leads to a payment to the customer and retailers should ask to see an ID.)

Jewelers should name a compliance officer to take charge of the AML program.

This person needs to be an employee of the company who is knowledgeable about the business, capable of documenting actions related to the program, and has the authority to make decisions on behalf of the company.

Also, be sure all employees are aware of the program and trained on how it works.

If a business is not compliant, following investigations and legal proceedings, regulators could impose two different types of penalties, according to Jewelers of America.

A retailer could face a civil penalty with a fine up to $250,000 or up to two times the amount of the transaction (not to exceed $1 million), or a criminal penalty with a fine up to $500,000 and a maximum of 10 years in prison, or both.

Check on suppliers regularly.

It’s important for jewelers to perform a risk assessment, paying particular attention to suppliers.

The Office of Foreign Assets Control, a division of the U.S. Treasury, publishes a list of individuals and companies owned or controlled by countries U.S. citizens are not permitted to do business with by law.

It also lists individuals, groups and entities, like terrorists and drug traffickers, that are not country-specific. They are called “specially designated nationals” (SDNs) and U.S. citizens must avoid doing business with them as well.

Jewelers can also check the list of sanctions programs and the Financial Action Task Force’s list of non-cooperative countries.

JVC advises retailers to go through their supplier list and spot check regularly to see if any show up on these lists. Customers can be checked as well.

If there appears to be a match, verify before burning that bridge.

Jewelers should keep an Excel file or list to document when the list has been cross-checked.

If an auditor comes knocking, well-kept records could fend them off, or at least buy some time, said Yood.

 Related stories will be right here … 

Be wary of red flags.

Many jewelers have long-standing, trustworthy relationships with their suppliers and customers, but if something feels off,  examine the situation.

For example, if a supplier suddenly wants a jeweler to send payment somewhere other than the usual place, that’s a red flag, said Yood.

When jewelers encounter a red flag, they should speak with the supplier or customer and ask a few clarifying questions.

Make a risk assessment and consult with the AML compliance officer, then decide whether or not to proceed with the transaction and document the decision.

Stop accepting cash payments.

Cash transactions come with their own baggage.

Transactions over $10,000 paid in cash have to be reported to the IRS via a form 8300. Whether it’s one transaction or a related series of transactions, that form needs to be filled out.

A retailer will need a customer’s tax ID and address to fill out that form, so be sure to collect that.

A foolproof way to avoid the problems attached to cash payments is to stop accepting them, said Yood.

“If someone really wants to buy something, they will figure out a way to pay you that is not cash,” she said.

While getting rid of paper money, ditch the paper invoices too, said Yood, noting digital ones are easier to sort through and manage.

Stress test the program.

Those looking to create a program have a few options.

Jewelers can hire an attorney to draft one, purchase JewelPAC, an automated software program from JVC and Jewelers Mutual, or buy JVC’s hard copy AML kit.

Once a program in place, be sure that it works. JVC recommends annual testing by a third-party auditor.

The stress test should include a full review of the AML program and documents as well as a review of three months of transactions.

Ledger entries should be matched to invoices and then to payments to suppliers or from customers.

Yood recommends holding onto all documents for seven years, as per the usual legal standard.

A word from the wise

Melissa Quick shared her experience of being audited with the session attendees, recounting a harrowing tale of nonstop paperwork and hefty legal fees.

The IRS contacted her seemingly out of the blue, showing up just ahead of the holiday season, an inopportune time for any retailer. Thankfully, her lawyer was able to negotiate a postponement until after the holidays.

The auditor dragged Quick along on a 9-month long journey that cost her $25,000 in legal fees.

“I didn’t do anything wrong, but it was a great expense to prove I didn’t do anything wrong,” said Quick.

Time and money aside, the experience was a drain on her mental health.

Quick reached out to JVC for guidance on how she and her lawyer should navigate the auditing process.

Looking to avoid this ordeal again in the future, Quick heeded Yood’s advice and stopped taking cash payments entirely, concluding she’d rather pay the 2.5 percent credit card processing fee and avoid another five-figure legal bill.

She also no longer works with international vendors to lower her risk level.

Quick said she doesn’t know any other jewelers who have gone through this process, though Yood was aware of a few in the Midwest and on the West Coast.

The likelihood of an audit is low, said Yood, but it’s always good to be prepared.

The Latest

LIM-401 2024 National Jeweler Supplier Bulletin- iD100 Web and Eblast FINAL (1).jpg
Supplier BulletinApr 24, 2025
Protect Your Customers and Your Business

Sponsored by the Gemological Institute of America

Wolf CEO Simon Wolf
EditorsApr 24, 2025
Q&A: Wolf’s CEO Talks U.S. Expansion

Simon Wolf shares why the time was right to open a new office here, what he looks for in a retail partner, and why he loves U.S. consumers.

Iowa jeweler Herman Ginsberg
IndependentsApr 24, 2025
Longtime Iowa Jeweler Herman Ginsberg Dies at 99

A third-generation jeweler, Ginsberg worked at his family’s store, Ginsberg Jewelers, from 1948 until his retirement in 2019.

gia1d100 btyb.jpg
Brought to you by
Protect Your Customers and Your Business

The risk of laboratory-grown diamonds being falsely presented as natural diamonds presents a very significant danger to consumer trust.

Charles & Colvard moissanite ring
FinancialsApr 24, 2025
Charles & Colvard Delisted From Nasdaq Due to Noncompliance

The company failed to file its quarterly reports in a timely manner.

Weekly QuizApr 18, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Young Diamantaires
SourcingApr 24, 2025
Young Diamantaires Transition to Nonprofit

The organization also announced its board of directors.

Mined + Found "Hope" Matchbox Locket
TrendsApr 24, 2025
Amanda’s Style File: So Charming

Charms may be tiny but with their small size comes endless layering possibilities, from bracelets to necklaces and earrings.

gia-topimage 0325.jpg
Brought to you by
A Brilliant Future Is Here

Get online education from GIA experts.

Bulgari’s expanded factory in Valenza, Italy
MajorsApr 23, 2025
Bulgari Doubles Size of Jewelry Factory in Italy

Located in Valenza, the now 355,000-square-foot facility includes a new jewelry school that’s open to the public, Scuola Bulgari.

1999 Cosmograph Daytona, Ref.16516
AuctionsApr 23, 2025
Rare Custom Rolex Daytona Heads to Auction

A platinum Zenith-powered Daytona commissioned in the late ‘90s will headline Sotheby’s Important Watches sale in Geneva next month.

Carmelo Anthony and Jaylen Brown David Yurman campaign
MajorsApr 23, 2025
David Yurman’s New Campaign Stars Carmelo Anthony, Jaylen Brown

The basketball stars wear men’s jewelry from the “Curb Chain” collection.

Woman wearing Zales jewelry
MajorsApr 22, 2025
Zales’ Rebrand Takes Playful Approach to Fine Jewelry

The Signet Jewelers-owned retailer wants to encourage younger shoppers to wear fine jewelry every day, not just on special occasions.

JAR Apricot Blossom bracelet
AuctionsApr 22, 2025
Christie’s to Auction JAR Jewelry Collection

The 21 pieces, all from a private collector, will be offered at its Magnificent Jewels auction next month.

National Jeweler columnist Lilian Raji
ColumnistsApr 22, 2025
The PR Adviser: Building Buzz Through Word of Mouth

Lilian Raji answers a question from a reader who is looking to grow her jewelry business but has a limited marketing budget.

Avi Levy
GradingApr 22, 2025
Avi Levy Is GCAL By Sarine’s New Chief Growth Officer

GCAL by Sarine created the new role to sharpen the company’s focus on strategic partnerships and scalable expansion.

Scottsdale Fine Jewelers store exterior
IndependentsApr 22, 2025
Brinker’s Jewelers Acquires Fellow Independent

The Indiana jeweler has acquired Scottsdale Fine Jewelers in Scottsdale, Arizona.

Bill and Birdie Levine of Van Cott Jewelers
IndependentsApr 21, 2025
New York Jeweler to Close After 111 Years

Van Cott Jewelers in Vestal, New York, is hosting a going-out-of-business sale.

IJO Director Samantha Larson
IndependentsApr 21, 2025
IJO Names New Director of Vendor Relations, Merchandise Strategy

Industry veteran Samantha Larson has held leadership roles at Borsheims, McTeigue & McClelland, Stuller, and Long’s Jewelers.

Events & AwardsApr 21, 2025
Jewelers of Louisiana, Mississippi Jewelers Association to Co-Host Convention

The two organizations will hold the educational event together this fall in Mississippi.

Daymond John
Events & AwardsApr 18, 2025
Daymond John to Give Keynote at JCK Las Vegas

The entrepreneur and “Shark Tank” star will share his top tips for success.

Dukachi Easter Bread Pendant
CollectionsApr 18, 2025
Piece of the Week: Dukachi’s ‘Easter Bread’ Pendant

The Ukrainian brand’s new pendant is modeled after a traditional paska, a pastry often baked for Easter in Eastern European cultures.

Bremer Jewelry
IndependentsApr 18, 2025
Bremer Jewelry to Reveal Renovated Store

The jeweler has announced a grand reopening for its recently remodeled location in Peoria, Illinois.

Tiffany & Co. Strong Like Mom campaign
MajorsApr 18, 2025
Tiffany & Co. Employees Star in Mother’s Day Campaign

The “Strong Like Mom” campaign features moms who work at Tiffany & Co. and their children.

Athena Calderone x John Hardy Collection
CollectionsApr 17, 2025
John Hardy, Athena Calderone Partner on Art Deco Decor-Inspired Collection

Interior designer Athena Calderone looked to decor from the 1920s and 1930s when crafting her first fine jewelry collection.

Movado Connect 2.0 watches
FinancialsApr 17, 2025
Movado Group to Increase Prices to Offset Tariffs Impact

During a call about its full-year results, CEO Efraim Grinberg discussed how the company is approaching the uncertainty surrounding tariffs.

Natural Diamond Council Diamond Learning Center Graphic
Lab-GrownApr 17, 2025
NDC Launches Its Diamond Learning Center

The free program provides educational content for jewelry salespeople and enthusiasts to learn or refresh their diamond knowledge.

Jewelers of America logo
Policies & IssuesApr 17, 2025
Jewelers of America Requests Tariffs Testimonials from Members

The feedback will be used to prepare other jewelers for the challenges ahead, the organization said.

×

This site uses cookies to give you the best online experience. By continuing to use & browse this site, we assume you agree to our Privacy Policy