June 13, 2022

‘The Emerald Is Wrapped in Myth and Legend’: Mayer Brown Nears Rare Repatriation Order for Brazil


Mayer Brown is closing in on a rare forfeiture order from the U.S. Department of Justice on behalf of the government of Brazil, which wants a colossal green stone known as the Bahia Emerald repatriated.

Litigation & dispute resolution partner John Nadolenco got involved with the emerald in 2014, when a letter showed up at the Mayer Brown office in Los Angeles. The stone was being held by the Los Angeles County Sheriff’s Department at an undisclosed location amid lawsuits in California over its ownership.

The letter was from the government of Brazil, which was seeking proposals from law firms to help recover the emerald.

“I frankly thought it was a hoax,” Nadolenco told Law.com International. “I checked with our lawyers in Brazil, and they said we think this is actually legit.”

Nadolenco flew to Rio de Janeiro to consult with Gustavo Fernandes de Andrade, a partner in the litigation & arbitration practice of Tauil & Chequer Advogados, a large Brazilian law firm that has been associated with Mayer Brown since 2009. Then Nadolenco traveled to Brasilia, the capital of Brazil, to outline a strategy for the Brazilian government.

Mayer Brown got the job.

Fernando Filgueiras de Araujo, a federal attorney in Brazil’s foreign disputes unit, said Mayer Brown was hired because of the firm’s strong track record, the key team members it proposed putting on the case and its fee.

“Mayer Brown was and is key to the success of the case so far,” Filgueiras told Law.com International.

So far, cautions Filgueiras, because the quest to reclaim what’s believed to be the world’s largest emerald has been full of twists and turns, as well as dubious characters.

The 752-pound gem has changed hands multiple times. Some experts place its value at hundreds of millions of dollars, while others see a brittle, worthless rock. Several claimants allege it was stolen from them.

The gem is actually a big, rough rock that contains nine separate crystals. One of these crystals is thought to be among the largest single emerald crystal ever unearthed. The whole mass weighs nearly as much as an adult bison.

Intriguing Puzzle

For the Mayer Brown team, the case was an intriguing puzzle—both due to its legal complexity and the mythos surrounding precious stones.

“You have to be fascinated by the world’s biggest emerald,” said Kelly Kramer, the Washington D.C.-based co-head of Mayer Brown’s white-collar defense and compliance practice and co-counsel with Nadolenco on the emerald case.

“The emerald is wrapped by myth and legend.”

Since being pulled from a mine in northeastern Brazil in 2001, the Bahia Emerald has allegedly survived a panther attack, the floods of Hurricane Katrina in New Orleans, and was nearly sold to disgraced financier and fraudster Bernie Madoff. Some believe the rock is cursed.

The first skirmish in Brazil’s efforts to claim the stone was to establish that the emerald was illegally mined. Here, Mayer Brown’s international partners in Brazil came in handy, as they were able to answer technical questions related to Brazilian law.

For starters, Brazil’s Constitution states that all mining assets in the country belong to Brazil. As such, mining in Brazil requires a permit that the miners of the Bahia Emerald lacked.

Brazil had to prove the merits of the case and show that it was determined to pursue it through to the end in order to convince the U.S. Department of Justice to dedicate resources toward recovering the stone. Mayer Brown secured a restraining order in 2015 to keep the stone safe in the U.S. while criminal charges proceeded in Brazil.

The Brazilian criminal trial and ensuing appeal process concluded in 2021.

In April 2022, the U.S. Department of Justice filed a motion with the U.S. District Court for the District of Columbia under a mutual legal assistance treaty with Brazil asking the court to order the emerald’s forfeiture. That motion was fully briefed in May, paving the way for the emerald to be returned to Brazil.

Under the treaty, Brazil was allowed to request the stone’s return after the Brazilians, who assisted with its illegal export to the U.S., exhausted their appellate rights following their criminal convictions in Brazilian courts.

“The Bahia Emerald proceeding is a textbook case of how difficult it is to enforce decisions through international cooperation, especially in asset recovery cases,” said Filgueiras, the Brazilian prosecutor.

The alternative to appealing directly to the U.S. Department of Justice would have been for Brazil to litigate its claim individually with each of the claimants in the U.S.
Brazil plans to display the massive stone in a museum. Neither Nadolenco nor Kramer have ever seen the Bahia Emerald in person.

Reprinted with permission from the June 13 edition of Law.com International © 2022 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.

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