The 11-Year Saga of the Litigation over the Cursed Bahia Emerald — the Largest Emerald Ever

Episode transcript:

Note: This transcript is generated from a recorded conversation and may contain errors or omissions. It has been edited for clarity but may not fully capture the original intent or context. For accurate interpretation, please refer to the original audio.

JOHN QUINN: This is John Quinn, and this is Law, disrupted. Today, we’re going to be talking about something a little bit different than the kinds of things we usually talk about. We’re going to be talking about the largest emerald ever known. The so-called Bahia Emerald, which is roughly 789 pounds. 

Nobody knows exactly what this stone is worth. Estimates from zero to nine hundred million dollars. Doesn’t really matter. It’s part of Brazilian heritage, and that’s what the litigation that we’re going to be talking about today was all about. 

Some people say this stone is cursed. It’s got a whole history, a ten-year legal saga associated with it. And we have the privilege of talking with John Nadolenco. Did I get that right, John? John Nadolenco and Kelly Kramer, both partners in the Mayer Brown law firm. John is managing partner of the Mayer Brown Los Angeles office. Kelly is a partner in the D. C. office. They represented Brazil in this saga, which, their goal, their client’s goal was to get this stone, this largest emerald in the history of the world, which was in Los Angeles to get it back to Brazil. And they’re on the verge of finally accomplishing that. But we want to hear the whole story. About this enormous cursed stone and how did it begin for you, John? How did you first get involved in this?

Do you have a background with Brazil? Do you have a background with emeralds and precious stones? How did they reach out to you? 

JOHN NADOLENCO: Yeah, no background with emeralds, diamonds, or any type of precious stones other than on a personal basis. I got a letter in 2014 that I literally thought was a hoax. It said, hey, we’re the government of Brazil. It’s supposedly from the attorney general’s office there. So we lost this stone. We lost the 740-pound emerald, and we think it’s the subject of litigation in Los Angeles. We’ve read about the case, and we’d like to get it back because it was stolen from Brazil. It belongs to us, and we’d like to interview a number of law firms who might be able to assist us. Let us know if you’re interested.

JOHN QUINN: Yeah, I mean, if I got that, I would probably file that away with these Nigerian schemes—these invitations to represent somebody in darkest Africa, which we all get from time to time. So, when you first got it, you thought it was a hoax. Did you throw the letter away or what?

JOHN NADOLENCO: I threw it right away, John, threw it right away and thought it was exactly the next iteration of the Nigerian prince scam. So, I didn’t really give it much mind. Then, about a week later, the managing partner of L.A. Optics, I was a managing partner then, he called me, and he said, Hey, I got copied on this letter. What are you going to do about it? And I was like, his name’s Phil Wright. I was like, Phil, I’m not going to do anything about it. Let me explain this to you. It’s a hoax. Like this isn’t real, they just want our money. So unless you want to just send them all our money, we should probably ignore it. And he said, yeah, of course, you’re probably right. But just do me a favor. We had just recently merged with a big Brazilian mob from Toe and Checker. So we’ve got a number of partners down there. He’s like, why don’t you just give them a call? See if it’s legit. Check it out. Do your due diligence and let me know what happens. And when I did that, I was just stunned to learn that it was a completely legitimate letter that we needed to take seriously.

JOHN QUINN: So your Brazilian partners told you, Yes, in fact, there is this huge emerald, which the Brazilian government has lost track of. And it’s the subject of litigation in Los Angeles, and it’s great that they’ve reached out to you, John. Was that basically what they told you? 

JOHN NADOLENCO: That was exactly the message.

JOHN QUINN: So what happened? What did you do then? 

JOHN NADOLENCO: So then this became a little bit more traditional law firm work. We said, okay, let’s put together some pitch materials. Let’s come up with some initial thoughts on a strategy that we thought might work, and we reached out to the different parts of Mayer Brown that we thought might have a role in whatever the strategy developed. We looked into the state court case, and there was, in fact, a pending litigation in Los Angeles Superior Court over the rights to the Emerald, the number of claimants were fighting over that, and then we submitted our pitch proposal essentially with our initial thoughts on strategy to the Brazilian Attorney General’s office. I was invited down there. I think this predated Kelly. So, I was invited to come down there and pitch. So I got to go to Brasília, and I may have visited some of the other cities in Brazil on that trip, but I did get to go to Brasília and met with the attorney general’s office, and we discussed for a better part of a day kind of how we are going to go about this? What’s the proposed strategy? How do you guys see this playing out some of the strictures that existed from the Brazilian side of it? And ultimately, I found out, I think, about a week later, we were retained and they said, okay go get the Emerald. 

JOHN QUINN: So, you learned that there was a pending state court case involving this enormous emerald. So, you must have learned some of the background here. Could you bring our listeners up to date? What had been going on? How was it that this stone was in Los Angeles? How was it the subject of court proceedings? Who were the claimants?

JOHN NADOLENCO: Yeah, so what had happened is the emerald was mined in the province of Bahia in Brazil, and it was…

JOHN QUINN: I’ve been there. I know where Bahia is. That’s up in the northeast. It’s the part of Brazil that’s closest to Africa, and it still has a very heavily influenced African culture there. But anyway, that’s where the stone came from. 

JOHN NADOLENCO: Exactly. It was mined illegally, meaning it was excavated without having mining rights or mining permissions to be mining in the particular area where the mining was occurring. It was extracted. Eventually, I think one of the claimants came down to Brazil to see it. Obviously, word had gotten out among this subculture of folks who traffic in this stuff—invaluable gems—that there was a huge emerald, the largest in the world. One of the guys came down there to see it, and there’s pictures on the internet of him, like, hugging it, and then it was…

JOHN QUINN: First piece of advice you might give that guy if you’re going to steal the largest emerald ever. Don’t put pictures on the internet of you down there hugging the stone. 

JOHN NADOLENCO: Exactly. Hugging the stone reminds me of that movie, Romancing the Stone, in the 80s. So he’s hugging the stone, but eventually what happens to the stone is it is FedExed to San Jose, California and literally it’s declared as concrete, a piece of concrete worth no value. I think it says zero on the FedEx ticket and then once it hits San Jose. It changes.

JOHN QUINN: The customs people apparently never looked for an opening. This is not really, you know, confidence inspiring that they didn’t even bother to look. But go ahead. 

JOHN NADOLENCO: No one bothered to look. And truth be told, if they did look, there’s a part of this emerald is still in its original stump, that was excavated along with it. So depending on how it’s laying or whatnot, you may not even know it’s actually an emerald, it may just be the backside and it looks like a piece of rock. But it gets to San Jose, and then it embarks on what I can best describe as a number of the claimants trying to figure out a way how to monetize this. So it exchanges hands, one guy sells it to another, someone takes it to New Orleans, it ends up, and I think this is verified, it ends up being stuck somehow, and Hurricane Katrina. So then that’s an issue. They have to figure out how do we get it? 

JOHN QUINN: That’s part of the story of the curse, right?

JOHN NADOLENCO: So clearly that’s evidence that it is cursed, no doubt about it. It gets out of Hurricane Katrina. It keeps changing hands. Then one of the claimants, I’m not sure who, reports it as stolen to the L. A. County Sheriff’s Department, and the L. A. County Sheriff’s decide, okay, it’s reported as a stolen item, we’re going to go get it. I think at that time, the stone was physically in Las Vegas, but the folks who had taken it had dropped it off in Las Vegas, I think they’re like in Idaho or in some other states. Somehow the sheriff’s get them there. And they’re like, Hey, we’re here to get the emerald and they said, well, we don’t have it. And they said, well, where is it? And somehow the sheriff persuades them to go down to Vegas, and that’s when this sheriff seizes it. And since that moment, it’s been in the L. A. County Sheriff’s custody. I think they took it to one of their evidence lockers and until a little bit later in the story, it literally sits in L.A. County Sheriff custody. 

JOHN QUINN: So this is like 11 years ago, these events that you’re describing, and the L. A. County Sheriff went to Vegas to get this? 

JOHN NADOLENCO: That’s our understanding.

JOHN QUINN: I didn’t know they could do that.

KELLY KRAMER: Yeah, it’s always been one of my favorite parts of the story, it’s like the L.A. guys just go on an expedition and they’re like up in Idaho and then they’re down in Nevada and you end up with an emerald back. 

JOHN QUINN: You know, this really is a movie I can just hear. I don’t know we all have ideas of who we’d cast in those roles as the sheriffs and I’m sure they had a good time on this trip. They’re chasing the stone. Anyway, so they bring it back to L.A.. And the client, so somebody files a lawsuit trying to quote the title essentially to the stone. Is that what happened? 

JOHN NADOLENCO: That’s exactly right. And so they’re all fighting. There’s a big trial where the claimants are making their case saying we get title, we get title. And that’s when Brazil comes on the scene. I think one of the first things we found out when we got brought in, was that there was actually a tentative decision in favor of one of the claimants. And so the first kind of legal issue was okay. Well, what happens now? The judge tentatively issued his ruling. He was about to have a hearing to hear from the very side, you know, typical tentative ruling, and say what did I get wrong? Tell me what you guys think I’m going to hear from the parties and that’s when we got brought in. The tricky issue about the Los Angeles County case is I mentioned one of the strictures that we talked about with the Brazilian government. It’s a national sovereign. Brazil’s view is that it deals with the United States federal government. It doesn’t see itself as subject to the jurisdiction of the Los Angeles County Superior Court nor will it submit to that jurisdiction So I don’t know what the trial judge wanted us to do But certainly I think he was thinking one of the options we might pursue was to intervene in the case that may have helped him because brazil really does have a good legal…I mean it has a rock solid—pardon the pun—legal claim to the emerald itself. But, it wouldn’t do that because it’s a national sovereign and it was going to be working with the United States federal government 

JOHN QUINN: So you did not appear in the L. A. County court, but the judge knew Brazil had an interest and that you were out there?

JOHN NADOLENCO: Yeah, we especially appeared, and I remember seeing pictures of me on the news, to tell him that he shouldn’t issue any ruling in favor of any of these parties because they didn’t actually own it and we made Brazil’s case. But, we technically did not appear as a party, and I think the judge ultimately just looked at it and you know, whether he wished we appeared or not, we’ll never know, but he said look I gotta decide the case on the parties in front of me that did appear and he ultimately made his ruling final.

JOHN QUINN: Yeah, and what was his what was his ruling? 

JOHN NADOLENCO: He awarded it to kim worsen and he had a a group who had basically said it was a security interest for a loan that he had extended and was not repaid.

JOHN QUINN: Oh, okay. So he wasn’t one of the guys hugging the stone that actually took it out of Brazil.

JOHN NADOLENCO: He had loaned money on it

JOHN QUINN: So from the Brazilian standpoint, did they have some understanding that there was this ghost stone that had been stolen and it was missing and they really didn’t have the trail of it? Or did the existence of this stone only come to their attention from news reports regarding this litigation in L.A.?

JOHN NADOLENCO: That’s right. They learned about it from news reports about the litigation in L.A. When they learned about it, they did their due diligence and tried to figure out, wait a minute, how did this happen? How did it get out of here? And when they figured that out, they realized that it was illegally mined. 

And under the Brazilian Constitution, tt addresses mining, the United States Constitution doesn’t, at least not expressly, theirs does. And it basically says, unless you have absolute permission to mine in the designated area, anything that is extracted from Brazilian ground belongs to the government of Brazil. So because no one had permission, to demonstrate permission, their view was we owned it.

JOHN QUINN: Alright, so you represent a sovereign that’s made a decision, which I think is completely understandable. They have sovereign immunity, and don’t want to jeopardize that. You’ve made a strategic decision. We’re not going to intervene in this case which is pending, which the state court judge is going to award title and apparently does award title.

Does he enter a judgment? 

JOHN NADOLENCO: Yes, he did. 

JOHN QUINN: All right. So what was your strategy and what were you gentlemen going to do? 

JOHN NADOLENCO: Yeah, this is where it gets really interesting because my blood pressure spiked, and Kelly came in. So we had to figure out what to do when the state court judge does, in fact, issue a final ruling and enter a judgment in favor of one of these folks.

And the answer to that was, I’ll let Kelly talk about the particular specifics here. We were dealing behind the scenes and killing particularly with the Department of Justice on behalf of the government of Brazil. They were aware of the state court case. We were keeping them updated. I went to Washington, D.C., and met with them and Kelly and we’re telling him what was happening in the case. We were asking them basically to file their own litigation against the Emerald, and to seize it.

JOHN QUINN: I mean, you were trying to get the Department of Justice to do that. 

JOHN NADOLENCO: Correct. They were considering it. When the state court judge entered the judgment, I personally didn’t know whether the DOJ was going or not. 

JOHN QUINN: At that point, you’ve got to assume you have a clock ticking and, they may show up to collect the emerald and then it’s lost again. 

JOHN NADOLENCO: Exactly. And so then I’m sitting, I remember this vividly, I’m watching my daughter play soccer. I’m at one of her soccer games, and my cell phone rings. It’s Kelly saying the state court judge entered the judgment the DOJ has agreed to file. They’re obtaining a TRO, they got it. We need to serve it on the claimants so that they don’t get the emerald. I’m, like but it’s a tie game 

JOHN QUINN: Okay, Kelly, tell us about what was going on in your discussions with the Department of Justice. And how did you get them to take action, and what really was the legal basis for it?

KELLY KRAMER: Yeah, so there’s a statute, it’s virtually unknown, and it’s very rarely used. It was part of the Patriot Act, actually back in 2001, that gives the federal government the ability to get a restraining order to preserve property pending forfeiture abroad. Oddly, I had litigated a case under that statute, maybe 10 years earlier on the other side. I had been representing a private party whose funds had been frozen at the request of Brazil, ironically, and ultimately secured a win. We got the training where the vacate went up to the D. C. Circuit fascinating argument with Kevin Garland and Judith Rogers, had no idea which way the ruling was going to go.

We got a 3 0 result. So, what happened after that is that Congress voice changed the law so that you could use it in exactly this kind of circumstance. I happened to write an article, which is how the Mayer Brown team even found out that I knew anything about this issue.

Once we got it, we had to make a pitch to the DOJ, and there were two options, really. They can bring their own forfeiture action, basically saying, look, you brought this into the United States. You did not declare it as an 800-pound emerald. You called it a rock and said that there was no value. So we’re going to bring a customs forfeiture action, or, and this is what the DOJ ultimately decided to do.

 you could get a foreign restraining order, lock up the emerald basically through a U. S. restraining order that’s based on the foreign order, and then wait for the foreign procedure proceeding to reach conclusion, complete all of its appeals, and then you could move to forfeit the, forfeit the emerald. And that’s exactly what happened here.

JOHN QUINN: All right. So the Brazilians had to get a restraining order. 

KELLY KRAMER: Correct. 

JOHN QUINN: Against the parties who were claiming the emerald, the parties who exported the emerald?

KELLY KRAMER: Yeah, great question. 

So, they sort of looked around and said, “Look, we can make a case against the guys who excavated the Emerald illegally and exported it illegally, and we can bring a forfeiture action against the Emerald as part of that case.” So, we worked very closely with the Department of Justice to come up with language, essentially, to take to the Brazilian court. It’s kind of tricky because the Brazilian legal system and the US legal system don’t match perfectly. So a lot of what we’re trying to do here is help with the translation, not the words, but like the systems to get an order from Brazil that’s going to be acceptable to DOJ, and the DOJ can then turn around and take it to a court and so working all this out, this is all happening is, as John was saying, against this ticking time, time bomb in the state court proceeding, because we can see it moving towards conclusion, and we just didn’t know whether we were going to have an order in place. 

We finally got the DOJ to make the motion, which was filed in district court in Columbia, and we were then just waiting for the court to rule and it’s the next part in motion. So, you know, there wasn’t an opposition at that time, but we just didn’t know which was going to happen first. There’s a weird little doctrine too, because a quiet title, I don’t know the quiet title action, and a forfeiture action are both in REM proceedings.

There’s a doctrine that two courts can’t have REM jurisdiction over the same object at the same time. So we had to wait. The way we had to structure that order was to basically set it up so that it took effect the moment that the California case ended. So we didn’t need the case to end as soon as it happened; it then became subject to the federal restraining order.

JOHN NADOLENCO: And that’s what stressed me out because Kelly basically said we have to wait for the California court judgment because that’s what dispossesses that court of jurisdiction and the timing of that was like, okay, everything has to happen exactly right otherwise someone else gets in trouble. 

KELLY KRAMER: Right, and it also creates a complicated question on appeal, right?

Because one of the things we had to decide was do we want to try to appeal the ruling of the rejection of Brazil’s special appearance? But, had we done that it would have preserved the California court’s jurisdiction over the emerald. So we had to make a tactical decision here. Do we take the appellate route and preserve this option or do we basically decide that we’re going to go with the federal option instead?

JOHN QUINN: So John, which I guess you tried, they rejected your special appearance. That’s what I’m saying, but you got to make your pitch.

JOHN NADOLENCO: We got to make the pitch. The judge knew that we were out there. I don’t know what he thought we could do or not do. 

JOHN QUINN: Right. And so you’ve got a restraining order, which basically restrains anybody from doing anything, tendency, a final judgment in the case pending in Brazil. Is that essentially right? 

KELLY KRAMER: Yeah, that’s basically right. So what we had to do once the restraining orders were in place, was preserve the asset pending potential forfeiture, but you can’t actually move to enforce a foreign forfeiture order until all the appellate procedures are completed. So, then what happens from 2015, basically, to 2022, we were just waiting.

We were waiting for the Brazilian proceedings to work their way through the system and they have a complicated level. I think they have a four-level appellate system there and so it definitely took some time before we finally got a final order of forfeiture. 

JOHN QUINN: Did the defendants in Brazil contest that proceeding? Did they show up?

KELLY KRAMER: They did. Yeah. 

JOHN QUINN: They claimed they had a right to excavate it or did they say it wasn’t us? 

KELLY KRAMER: No, they claimed that they had a right to excavate. They basically put on a defense as it related to how they were trying to, you know, that it wasn’t false to say that the rock had been mined, or sorry that it was just rock and it wasn’t a gem, but there were no damages from a customs perspective because there was no duty, et cetera, et cetera.

But at the end of the day, they were both convicted and the appeals were ultimately sustained and as part of the orders to conviction was this forfeiture order, but we were then in a position to try to go forward on, but what complicated it even then is that there were multiple collateral actions involving challenges that what we call the Morrison group, the group that has won in the state court in California, we’re pursuing in the Brazilian cases and collateral actions that were being pursued by the defendants themselves. 

JOHN QUINN: What sentence did the defendants get in Brazil?

KELLY KRAMER: Initially they were both sentenced to some prison time.  but neither one of them, I think ultimately had the prison sentence set aside because of his age. There’s a doctrine in Brazil that if you reach a certain age, you don’t have to go to jail, basically. So one of them, I think actually did serve some time and there were some fines that were associated with this. And of course, the forfeiture was part of the sentence as well. 

JOHN QUINN: Right. Okay. So the judgment in Brazil becomes final appeals are exhausted. And then what happens? 

KELLY KRAMER: So then we have to go back to the DOJ because on both of these, the fourth, the restraining order in the first place and ultimately enforcing it, it’s a two-part process.

The first thing you have to do is get the attorney general or his or her designee to certify that enforcing these orders is in the interest of justice. So there’s an administrative, you know, executive branch decision that has to be made on the front end. So we spent a bunch of time working with the Brazilians and the US DOJ to satisfy them that what happened in Brazil was fair, that due process was respected, all of those kinds of things. And then we set to work preparing a declaration to submit as part of the motion to enforce, which is what was important to the court, right? The court would take the motion and then look at the declaration for the Brazilian officials to understand whether or not the judgment had been entered through a system that respected due process that it was, there was no fraud, all those other kinds of things. So it’s pretty extensive. I think it turned out to be about a 20-page declaration recounting the history of the case explaining how the Brazilian system works, explaining procedurally all the different appeals that have been taken, what happened to the sentences, and ultimately explaining that there’s now a final forfeiture order, no longer subject to appeal, and that it should be enforced pursuant to the mutual legal assistance treaty between the United States and Brazil.

JOHN QUINN: And once you have that, and I take it the judge granted that. And so they turned it over to the Brazilian authorities in the U. S., is that essentially what happens? 

KELLY KRAMER: Well, that remains to be seen. So we have now a final order from the judge, and the time to appeal has run. So, at this point technically what’s happened is that the Emerald is now owned by the United States.

That’s the way the forfeiture reads. Now, the United States, pursuant to the treaty, is going to repatriate the Emerald to Brazil, and the mechanics of that are a little bit unknown. It could be the case that we end up packing the Emerald up in L.A. and then shipping it back to Brazil.

It could be the case that the DOJ decides that they want to use the Emerald for the ceremony in DC for the ceremony in Brazil, however, it may play out that stuff is still up in the air so the details of the return are still in question, but it’s going to end up in a museum in Rio hopefully soon.

JOHN QUINN: In a museum. That’s where it’s destined. 

KELLY KRAMER: Yep. That is. 

JOHN QUINN: So, the 10-plus-year saga will end with the emerald being displayed publicly in a museum in Rio or São Paulo or Rio. 

KELLY KRAMER: It’s going to be in Rio. 

JOHN QUINN: And have either of you gentlemen actually seen the emerald? 

JOHN NADOLENCO: No, I don’t think Kelly has seen it. I certainly haven’t. There was a time when it was pending state court litigation when we were communicating with the L.A. County Sheriffs, and when we were about to get the TRO, there was an opportunity to actually go and see it when there were certain papers. I didn’t take that opportunity, and Kelly didn’t either.

It wasn’t because it was cursed; it was just that I understood logistically. It is a big pain for the sheriffs to make it available. It’s 800 pounds. It’s not easy to move around, and they can’t just give you access to where it’s sitting. So I decided I’d take it easy on the sheriffs, and they could just keep it. So I haven’t seen it yet 

JOHN QUINN: Well, it’s a fascinating story. What will you do? This was years and years in the making. What will you remember most about this case Kelly? 

KELLY KRAMER: So the thing that stuck out for me the most was the probably 3 or 4-week period after we had gotten the DOJ’s agreement to move forward with this motion. We were sort of finalizing it, working through it with the Brazilians, and securing that restraining order while the California state court case was just about to end.

And, you know, the thing that really stuck out for me was, when Mary Butler, who was a Prosecutor over at the money laundering asset recovery section now,  called me up to say the judge just granted the motion because then I can pick up the phone and call John and tell him, I guess it is a soccer game. Hey, this is what this is what this is what just happened. And, you know, it was just one of those moments where you really just didn’t know. We were very much concerned that the order was not going to come in time and we were going to have to try to track this emerald down someplace, or god forbid that it’d be broken up. That was those were genuine worries that we had 

JOHN QUINN: And John, what will you remember most? 

JOHN NADOLENCO: Well, for sure, being on the receiving end of Kelly’s call is something that’s going to stay with me. The other real highlight for me was that after the federal government seized the Emerald, we actually had the opportunity to take some discovery of these claimants.

And we had to be deputized basically as assistant U. S. attorneys to be acting on behalf of the federal government. And so we got to actually meet some of the claimants that we had read about for years and years and years and always had wondered

JOHN QUINN: Did they come across as kind of shady unsavory characters or were they like bankers in pinstripe suits?

JOHN NADOLENCO: It was more the former than the latter. No question about it, some of them took the fifth day, which you expect would not answer any questions. Some of them were a little bit more candid in their version of events, but it was fascinating and it’ll stick with me to a) be able to act on behalf of the United States government in an official capacity and b) to actually meet some of these people that we have read about for years and years.

JOHN QUINN: Well, it’s a great story. Thank you very much for sharing it with us. 

We’ve been hearing the story, the 10-plus-year saga of the Bahia Emerald, the largest emerald in the history of the world, which ended up in the United States. Traveled apparently to New Orleans, Las Vegas, has been in the custody of the Los Angeles County Sheriff’s Department for many, many years, and thanks to John Nadolenco and Kelly Kramer of the Mayer Brown Firm who we’ve been speaking with, it’s going back to its home in Brazil.

So thank you very much for joining us. This is John Quinn. This has been Law, disrupted.

Thank you for listening to Law, disrupted with me, John Quinn. If you enjoyed the show, please subscribe and leave a rating and review on your chosen podcast app. To stay up to date with the latest episodes, you can sign up for email alerts at our website, www.law-disrupted.fm, or follow me on X  @jbqlaw or @quinnemanuel.

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Published: Mar 14 2025