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New York--Lazare Kaplan International Inc. has filed a lawsuit against two Belgian banks claiming that the entities stole more than $135 million in rough diamond sales from the company to make up for a series of “improper” loans to a prominent Antwerp diamond dealer.

The filing of the lawsuit comes on the heels of a three-year investigation by Lazare Kaplan, which claims that the alleged scheme has resulted in, among other issues, financial losses and the delisting of the company’s stock on the American Stock Exchange (AMEX) as well as lost sights from the Diamond Trading Co.

According to a 163-page complaint filed Dec. 23 in U.S. District Court for the Southern District of New York, between 2008 and 2010 Antwerp Diamond Bank N.V. and its parent company KBC Bank N.V. worked in concert with a “complex web of individuals and entities controlled by or associated with [their] customer, Erez Daleyot.”

Daleyot is not a defendant in the lawsuit but is named, along with a number of Daleyot “entities,” including his Antwerp-based diamond manufacturing company DD Manufacturing N.V., as being implicit in the scheme.

The suit alleges that the banks and Daleyot planned the theft of the diamonds, transferred the stones through a series of legitimate and sham transactions that made them difficult to trace, and laundered the proceeds through a network of legitimate and illegitimate businesses and accounts.

The banks then used the proceeds to repay “certain financially disastrous loans” that the banks had made to Daleyot beginning around 2006 for speculative real estate transactions in Central and Eastern Europe and for loans that Daleyot had used for his personal expenses, including the purchase of private airplanes, fine art and a yacht, court papers state.

In a statement posted on its website and emailed to National Jeweler, KBC Bank called the lawsuit "without merit" and said it deplores the steps taken by Lazare Kaplan and will do everything it can to defend it rights and the interests of its stakeholders.

"The dispute relates to legal proceedings before the Antwerp Commercial Court regarding a credit contract between LKI (Lazare Kaplan International) and ADB (Antwerp Diamond Bank)," the statement reads. "As a rule and in order to respect customer confidence, KBC and ADB don't release information on specific customer files. KBC and ADB emphasize that in the LKI case all normal procedures and measures have been respected."

Daleyot did not respond to request for comment.

According to court papers, it was around 2008--the onset of the global financial crisis when both diamond prices and the value of real estate in Central and Eastern Europe declined sharply--that the banks realized that the Daleyot entities wouldn’t be able to repay their “improper” loans, which totaled more than $118 million at that time.

Not being able to recover these funds would cause Antwerp Diamond Bank--which, during the global financial crisis, received a total of about $15 million in emergency funding from the U.S. and Belgian governments to keep it from failing--to crumble and expose the wrongdoing of senior management, court papers state.

In order to cover their tracks, the banks “seized upon” $135 million in rough that Lazare Kaplan and its subsidiaries and affiliated companies had purchased or financed through credit facilities maintained with the two banks as well as ABN Amro Bank N.V.

It is also alleged that senior officers at the banks accepted bribes from the Daleyot entities to participate in the scheme.

In court papers, Lazare Kaplan claims that when it brought what was happening to the attention of the banks, the banks sought to intimidate Lazare Kaplan with “false and manufactured” claims that the company had defaulted on its lines of credit and threatened to force the company into involuntary bankruptcy and urged other lenders to join them.

When another of Lazare Kaplan’s lenders refused to participate in the bankruptcy plan, the banks simply terminated Lazare Kaplan’s lines of credit, which had a “devastating effect” on the diamond company’s ability to conduct business, court papers state.

Antwerp Diamond Bank also has filed its own lawsuit against Lazare Kaplan in Belgium seeking payment on a line of credit. That case is pending, with the hearing postponed until September 2012 at the request of the bank.

Lazare Kaplan is seeking $500 million in damages in the case, as well as a full accounting of the missing diamonds and sale proceeds, and a declaration that the alleged defaults by Lazare under its loan agreement with Antwerp Diamond Bank are invalid.

As previously announced by Lazare Kaplan, it has already settled two related cases. In October 2010, the company settled its case with ABN Amro, including the claims related to ABN Amro’s participation in alleged scheme.

In July, Lazare Kaplan settled certain claims related to the theft and misappropriation of its diamonds with two of its insurance carriers.