Mauboussin and The Lawsuit
In 1922, George Mauboussin had become the named partner of "Mauboussin, Successeur de Noury," a French jewellery house that traced its roots to its founding by M. Rocher in 1827. In March 1927, the Duke of Westminster used US importers Mayers, Osterwald & Muhlfeld to sell the diamond to Parisian jeweller George Mauboussin, who was living in the United States at the time. Mauboussin's importation of the diamond into the United States was tax free, since the diamond was determined to be an artistic antiquity produced more than one hundred years prior to the date of importation. However, E. F. Bendler, an American wholesaler and dealer in diamonds and a rival of Mauboussin, filed a protest that resulted in a lawsuit to determine whether a tax should be imposed on the diamond's entry into the United States. By November 1927, Mauboussin considered selling the diamond to friends of General Primo de Rivera, who planned to give the diamond to the dictator on the occasion of his forthcoming investiture as marshal of Spain. That sale never materialised and the lawsuit continued. The diamond was nearly lost in a theft that occurred in January 1929, when four gunmen robbed the Park Avenue jewellery store where the Nassak Diamond was being kept. However, the thieves missed finding the diamond because it was being stored in a soiled envelope.
After the first robbery attempt, Mauboussin's jewellery firm opened a branch in New York City on 1 October 1929, only to be met by the Wall Street Crash of 1929 at the end of October. To compound matters, the same gang of international robbers tried to steal the Nassak Diamond again in May 1930, but once again missed it.
Prior to the outcome of the lawsuit, the insured diamond was valued between US$400,000 and $500,000 (allowing for inflation, this would now be $5.5 million and $6.87 million). At the time the lawsuit was pending, imported diamonds that were cut and suitable for use in the manufacture of jewelry, without actually being set as jewelry were subject to an ad valorem tax of 20% its value. However, artistic antiquities produced more than one hundred years prior to the date of importation could be imported into the United States duty free; that is to say, without having to pay a 20% tax. The final decision of the lawsuit was released on 4 June 1930. In that decision, the court determined that the unset 78.625 carats (15,725 mg) Nassak Diamond was not an artistic antiquity and was suitable for use in manufacture of jewelry. In particular, the court said that the 1930 Nassak Diamond was nothing more than "a large diamond, cut in an ordinary way." As a result, the importer owed an ad valorem tax of 20% of the diamond's value under US Tariff Act of 1922.
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