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.
Lenore Fedowis the senior editor, news at National Jeweler, covering the retail beat and the business side of jewelry.

The Latest

Korman jewelry store Austin
IndependentsSep 08, 2025
Take a Look Inside the New Korman Store in Austin

The Texas-based jeweler has also undergone a brand refresh, debuting a new website and logo.

Logos for Manufacturing Jewelers & Suppliers of America and Jewelers of America
MajorsSep 08, 2025
MJSA Is Officially Now Under JA’s Umbrella

The two organizations have finalized and signed the affiliation agreement announced in May.

Sothebys JAR and Suzanne Belperron jewels
AuctionsSep 08, 2025
Sotheby’s To Auction ‘Exceptional’ Collection of JAR, Suzanne Belperron Jewels

The single-owner sale will headline Sotheby's inaugural jewelry auction at the Breuer building, its new global headquarters, this December.

reDollar-fine-jewelry-department.jpg
Brought to you by
reDollar.com Is Rolling Out the Next Level Jewelry, Diamond & Watch Consignment Program

With their unmatched services and low fees, reDollar.com is challenging some big names in the online consignment world.

National Jeweler columnist Peter Smith
ColumnistsSep 05, 2025
Peter Smith: A Lasting Lesson From Maurice Tempelsman

Smith recalls a bit of wisdom the industry leader, who died last week, shared at a diamond conference years ago.

Weekly QuizSep 04, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Jamie Turner Victoria Labradorite Necklace
CollectionsSep 05, 2025
Piece of the Week: Jamie Turner’s ‘Victoria’ Necklace

The “Victoria” necklace features a labradorite hugged by diamond accents in 18-karat yellow gold.

Stock image of the U.S. Supreme Court
Policies & IssuesSep 05, 2025
Trump Takes Tariffs Case to the Supreme Court

Two lower courts have moved to block the import taxes, which will remain in place as the legal battle continues.

japac-btyb.png
Brought to you by
Rallying Call for the Jewelry Industry on Tariffs and Other Key Issues

Jewelers of America is leading the charge to protect the industry amidst rising economic threats.

Patrick Mahomes Hublot campaign
WatchesSep 05, 2025
Patrick Mahomes Is the New Hublot Brand Ambassador

The Kansas City Chiefs quarterback shares Hublot’s dedication to pursuing greatness, the Swiss watchmaker said.

gia-edu main image.png
Supplier BulletinSep 04, 2025
A Brilliant Future Is Here

Sponsored by GIA

Lucara pink diamond
SourcingSep 04, 2025
Lucara Unveils Unusual 37-Carat Pink Diamond

The Type IIa stone, recovered from Botswana’s Karowe diamond mine last month, features unique coloration.

Shot from Breitling new NFL campaign
WatchesSep 04, 2025
Breitling Takes Its NFL Game to the Next Level

Breitling is now the NFL’s official timepiece partner, a move that puts the brand in front of the millions of Americans who watch football.

Fabergé x Gemfields Malaika Egg
SourcingSep 03, 2025
Gemfields Confirms Completion of Fabergé Sale

U.S.-based investment company SMG Capital LLC is the new owner of the luxury brand.

Claire’s storefront
MajorsSep 03, 2025
These Are the Nearly 300 Claire’s Stores Set to Close

A new court filing details the locations of the stores that will close, as well as the 830 that will remain open.

Stuller’s Tools, Equipment, & Metals and Findings & Metals Catalogs
MajorsSep 03, 2025
Stuller Releases 2 New Catalogs

The new catalogs are “Tools, Equipment, & Metals” and “Findings & Metals.”

Effy Jewelry Multicolor Sapphire Bangle
TrendsSep 03, 2025
Amanda’s Style File: A Perfect Birthstone

Sapphire’s variety of colors make it the perfect birthstone for September.

Woman with hands crossed wearing jewelry
FinancialsSep 02, 2025
Lab-Grown Diamonds, Lower-Priced Fashion Jewelry Drive Signet Jewelers’ Q2 Sales

The retailer has raised its guidance after seeing total sales increase 3 percent in the second quarter, beating expectations.

Jean-Christophe Bédos Birks
MajorsSep 02, 2025
Birks CEO Jean-Christophe Bédos Steps Down

Niccolò Rossi di Montelera, executive chairman of the board, was appointed as interim CEO.

Harry Winston Ginza Flagship Exterior, Interior
MajorsSep 02, 2025
Harry Winston Opens Its Largest Flagship in Japan

The three-floor space also features the jeweler’s largest VIP salon in Japan and offers an exclusive diamond pendant.

All Hours: Stephanie Gottlieb Fine Jewelry x Oak and Luna Campaign Imagery
CollectionsSep 02, 2025
Stephanie Gottlieb Debuts Silver Designs in ‘All Hours’ Collab

The collection is a collaboration between Stephanie Gottlieb Fine Jewelry and Oak and Luna, focusing on understated essentials.

Sothebys The Desert Rose orangy pink diamond collectors week
AuctionsAug 29, 2025
Sotheby’s UAE Sale to Feature 32-Carat Fancy Vivid Orangy Pink Diamond

The highlight of a single-owner jewelry and watch collection, it’s estimated to fetch up to $7 million at auction this December.

Calvin Klein watch and jewelry campaign
FinancialsAug 29, 2025
Movado’s Q2 Sales Rebound Despite Tariff Impact

CEO Efraim Grinberg noted a resurgence in the fashion watch market.

Mark Davis Bullseye Necklace
CollectionsAug 29, 2025
Piece of the Week: Mark Davis’ ‘Bullseye’ Necklace

The “Bullseye” necklace, with vintage bakelite and peridot, August’s birthstone, is the perfect transitional piece as summer turns to fall.

Image #1_Resized.png
Supplier BulletinAug 28, 2025
Clientbook Is Helping Jewelers Turn Clienteling Challenges into Wins with Hands-On Training and Coaching

Sponsored by Clientbook

GIA’s new report for lab-grown diamonds
GradingAug 28, 2025
GIA’s New ‘Quality Assessment’ for Lab-Grown Diamonds Is Coming

It will classify lab-grown stones into one of two categories, “premium” or “standard,” in lieu of giving specific color and clarity grades.

Botswana President Duma Boko
SourcingAug 28, 2025
Botswana Declares Public Health Emergency Amid Diamond Sales Slump

President Duma Boko addressed the country’s medical supply chain crisis in a recent televised address.

Afton Robertson-Kanne Borsheims
MajorsAug 28, 2025
Borsheims Names New Jewelry Buyer

Former Free People buyer Afton Robertson-Kanne recently joined the retailer.

×

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