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Jeweler charged with trying to sell 'hopeless' diamond

At 73 carats, the fake diamond is much larger than even the famed Hope diamond, which measures just 45.52 carats.

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WASHINGTON (CNN) -- A Virginia jewelry store owner accused of trying to sell a phony 73-carat diamond to undercover federal agents posing as Colombian drug traffickers is facing grand larceny charges.

Authorities said Yee Wai Yam, 41, admitted purchasing the inch-wide "diamond" for $125 at a flea market. He negotiated a $12 million deal with the federal agents before being arrested.

"This scheme was unique for its sheer audacity," said Allan Doody, head of the U.S. Customs Service office in Baltimore, Maryland.

When Yam met with the agents at a hotel near Dulles International Airport on Wednesday, he said the diamond had been smuggled from South Africa and that he didn't want to leave a paper trail or affect the world diamond trade, according to authorities.

The undercover officers, including customs agents and detectives from the airport police, told Yam they were Colombian drug traffickers and money launderers who needed the gemstone to launder drug proceeds.

Although Yam initially asked for $14 million, he and the agents agreed on $12 million, according to law enforcement officials -- at which point Yam, who owns a jewelry store in Harrisonburg, Virginia, was arrested and turned over to Virginia authorities, who charged him with grand theft.

At 73 carats, the fake diamond was much larger than even the famed Hope diamond, which measures just 45.52 carats.

"This gemstone was portrayed as nothing less than the Hope diamond, but, as we expected, it turned out to be just a hopeless diamond," Doody said.

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