Crime pays for bidders

It seems to be common these days for police departments to promote their crime-fighting prowess by displaying the proceeds of crime, as they are usually described on television news.

Weapons, stacks of cash and jewellery are usually presented to the cameras as trophies. So where do these proceeds end up? In the case of jewels, possibly being worn by the public.

First State Auctions is the auction house contracted for various government departments, including the Australian Federal Police and Customs agencies. Managing director Mervyn Levine is diplomatic when asked if the jewellery and watches he sells include proceeds of crime. "We are not given any idea of where the police goods come from," he says.

These are generally described as lost or recovered (stolen) goods, but not likely to be ones stolen recently. "We understand that it is a very rigorous process before they auction off the items, and can take up to eight years to get to market," Levine says.

Customs goods are usually those claimed when GST and duties have not been paid. First State is also a commercial clearance house, so most of the jewellery sold is liquidated stock from manufacturers, importers and gemstone dealers.

These are usually companies closing down or going down the gurgler. Which means there could well be some bling bargains out there. As an example, Levine mentions a pre-owned Cartier Maillon Panthere diamond ring set in yellow gold with an estimated diamond weight of 1.80 carats. It came in the Cartier box with Cartier valuation certificate. The retail price was $14,000, it sold for $3000 at auction. In November, First State sold the largest tanzanite stone ever offered in Australia for $95,000 at its sale in Chatswood, Sydney. The stone was set in an 18-carat gold necklace with diamonds totalling 6.31 carats. In August it sold a 10.03-carat round diamond ring in Singapore for $130,000.

The recent record for a ring is $195,000 for a 5.01-carat diamond of exceptional clarity.

Levine suggests even those prices are lower than retail. First State sale estimates are prepared by in-house gemologists, based on what a similar item sold for at a recent auction. These are a realistic guide to the auction value but items sometimes sell lower. There is an element of risk with any auction purchase but First State's policy is that all diamonds over one carat will have either a GIA or GSL laboratory report and all items with a price expectation above $3000 will be accompanied by a certificate of authenticity.

This is also a good place to get designer watches. New watches are sold with a 12-month manufacturer's warranty, while used branded watches (including big names such as Rolex, Cartier and Breitling) carry a three-month warranty from First State Auctions. Used Rolex Oysters typically sell for between $3000 and $5000.

The previous owner's identity is not disclosed but some might like the idea that whoever he or she was, the previous owner is doing time.

First State holds about 80 auctions a year, not all including the proceeds of crime - in all Australian capital cities and many regional centres. It also hold auctions in New Zealand, Hong Kong, Singapore and Taiwan. Coming sales are listed on the First State Auctions website. At the moment it holds only live auctions, although there are plans to introduce online bidding. It is also considering separate online-only auctions, although many jewellery buyers still prefer to view items before investing.

Levine says there is a vibrant market for jewellery at auction, with international vendors seeking to do business in the land of the strong Australian dollar.