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

Set of four Patek Philippe “Star Caliber 2000” pocket watches
AuctionsSep 17, 2025
Mythical Set of Patek Philippe Pocket Watches Expected to Sell for $10M+

A set of four Patek Philippe “Star Caliber 2000” pocket watches is part of Sotheby’s upcoming auction in Abu Dhabi.

Journey of a Jeweler by Silvia Furmanovich
TrendsSep 17, 2025
Silvia Furmanovich’s Book Tells the ‘Journey of a Jeweler’

The Brazilian jeweler’s latest book marks her namesake brand’s 25th anniversary and tells the tale of her worldwide collaborations.

1978 Rolex Submariner Ref. 1680 Tiffany Dial
WatchesSep 17, 2025
Bob’s Watches Acquires Vintage Rolex Won on ‘The Price is Right’

The Submariner Ref. 1680 with a Tiffany & Co. dial came from the original owner, who won it as a prize on the game show in the 1970s.

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.

Jewelers Mutual Group logo
TechnologySep 17, 2025
Jewelers Mutual Launches Shipping Solution App for Shopify

The new integration allows users to manage shipments directly from the Shopify dashboard.

Weekly QuizSep 12, 2025
This Week’s Quiz
Test your jewelry news knowledge by answering these questions.
Take the Quiz
Shot of one of the pools at the Omni La Costa Resort & Spa in Carlsbad, California
EditorsSep 16, 2025
Out & About: 7 Great Quotes From Converge in Carlsbad

At Converge 2025, Editor-in-Chief Michelle Graff attended sessions on DEI, tariffs, security, and more. Here are her top takeaways.

Crime police cars
CrimeSep 16, 2025
2 Robbery Suspects Killed in California Pawn Shop Shootout

Six people were shot last week at an Oakland cash-for-gold shop as employees exchanged gunfire with individuals trying to rob the store.

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.

Chopard Ice Cube Modular Necklace
CollectionsSep 16, 2025
Chopard Adds New Designs to Its ‘Ice Cube’ Capsule Collection

The jeweler has expanded its high jewelry offering, which launched last year, with new pieces featuring its cube motif that debuted in 1999.

Natural Diamond Council Retailer Accreditation Program seal
SourcingSep 16, 2025
Natural Diamond Council Launches Retailer Accreditation Program

Ben Bridge Jeweler and Lux Bond & Green were a part of the pilot program. 

Kristen Bell, Angela Bassett, Lisa Manobal
EditorsSep 15, 2025
Skipping the Necklace, Embracing Snakes: The Best Jewelry From the 2025 Emmy Awards

Associate Editor Natalie Francisco shares eight of her favorite jewelry looks from the 77th annual Primetime Emmy Awards, held Sunday night.

Holiday presents in gift boxes
SurveysSep 15, 2025
Resilient Shoppers to Boost Holiday Retail Sales, Says Deloitte

It’s predicting a rise in retail sales this holiday season despite economic uncertainty and elevated inflation.

Buffalo Emerald
SourcingSep 15, 2025
Gemfields Achieves $32M at High-Quality Emerald Auction

It included the sale of the 11,685-carat “Imboo” emerald that was recently discovered at Kagem.

8.33-carat emerald-cut no-oil Brazilian emerald, A. Kleiman & Co.
SourcingSep 15, 2025
AGTA Elects 8 Members to Board of Directors

The newly elected directors will officially take office in February 2026 and will be introduced at the organization’s membership meeting.

Rough montana sapphire
EditorsSep 12, 2025
Out & About: Mining Sapphires in Rock Creek, Montana

Associate Editor Lauren McLemore headed out West for a visit to Potentate Mining’s operation hosted by gemstone wholesaler Parlé Gems.

Arunashi Fordite and Rhodolite Earrings
TrendsSep 12, 2025
Piece of the Week: Arunashi’s Fordite and Rhodolite Earrings

Fordite is a man-made material created from the layers of dried enamel paint that dripped onto the floors of automotive factories.

Supreme Court stock image
Policies & IssuesSep 11, 2025
Supreme Court to Hear Tariffs Case in November

A decision likely won’t come until January 2026 at the earliest, and the tariffs remain in effect until then.

Tabayer’s Nordstrom Shop-in-Shop
MajorsSep 11, 2025
Tabayer Opens Nordstrom Shop-In-Shop

Located in the revamped jewelry hall at the retailer’s New York City flagship, this opening is Tabayer’s first shop-in-shop.

De Beers education app on mobile phone
SourcingSep 11, 2025
Need to Sell More Natural Diamonds? De Beers Has an App for That

The new, free app offers accessible educational content, like games and podcasts, for U.S. retailers.

Gold jewelry on a scale
MajorsSep 10, 2025
Stuller to Swap Gold Scrap for Full Credit to Account

As the gold price rises, the manufacturer is offering a 100 percent payout through Sept. 30 for gold clean scrap.

Jacob and Co Loewe headphones
SourcingSep 10, 2025
Tech Meets Style in the New Loewe x Jacob & Co. Headphones

Jacob & Co. partnered with the German technology company on two pairs of headphones, one set with diamonds and the other with sapphires.

Tiffany & Co Favrile Beetle Necklace in Frankenstein
TrendsSep 10, 2025
Tiffany & Co. Archival Jewels Bring Life to ‘Frankenstein’

Guillermo del Toro’s 2025 “Frankenstein” will feature 27 jewels and objects from the storied brand, including pieces from its archives.

24 Karat Club banquet
MajorsSep 10, 2025
24 Karat Club of New York’s Banquet to Return to Waldorf Astoria

The Waldorf Astoria New York’s grand reopening this past summer means a homecoming for the industry group’s annual event.

Anglo American’s Quellaveco copper mine in Peru
SourcingSep 09, 2025
Anglo American to Merge With Canadian Copper Miner

Anglo plans to merge with Teck Resources Ltd. to form Anglo Teck. The deal changes nothing about its plans to offload De Beers.

The Mellon Blue diamond
AuctionsSep 09, 2025
‘The Mellon Blue’ to Return to Auction, This Time at Christie’s

The 9.51-carat fancy vivid blue diamond, which set two world auction records at Sotheby’s in 2014, is estimated to fetch up to $30 million.

Dianne Batista Phillips Auctions
AuctionsSep 09, 2025
Phillips Names Dianne Batista Head of Jewels, New York

The industry veteran joins the auction house as it looks to solidify its footprint in the jewelry market.

Anastacia Lauren, Elle Jerge, Logan Nye
MajorsSep 09, 2025
MJSA Education Foundation Announces 2025 Scholarship Winners

The nonprofit awarded four students pursuing a professional career in jewelry making and design with $2,250 each.

×

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