Investments in diamonds "appear to be the latest national lie-by-day and fly-by-night scheme," Commodity Futures Trading Commission Chairman William Bagley has warned.

In an obvious appeal to federal and state agencies to take action on potential diamond swindles that have developed rapidly in the past four months, Bagley sent letters to all state attorneys general and securities commissions as well as the U.S. Securities adn Exchange Commission.

Bagley's agency is studying whether it can assert regulatory authority over such transactions but, in any event, it lacks the manpower necessary for broad surveillance and quick enforcement steps.

A nationwide survey by the CFTC staff uncovered what Bagley described as "disturbing" evidence that diamonds as well as copper, foreign currencies and platinum are being sold fraudulently with fast sales pitches across the country.

Indeed, many of the same boiler room sales tactics that characterized the sale of London commodity options - and led to a ban on such trading that started yesterday - are being used to sell diamonds as investments, Bagley said.

He revealed in his letter that the agency is considering whether such sales are subject to CFTC regulation as "futures contracts."

Even if the agency decides it cannot act, states have "absolutely clear" authority to move against fraudulent operations, Bagley added in an apparent invitation to state enforcement authorities to become engaged in surveillance of the new investment schemes.

To his letters, Bagley attached copies of newspaper advertisements with such headlines as: "Need a 25% Return"; "31% Growth Per Year"; "Diamonds with Leverage"; "Diamond Fever Seminar" and "Investment Quality Diamonds vs. Gold and the Dow Jones."

The diamonds and other commodities cited by Bagley as subject to fraudulent sales schemes are being sold on a "leveraged" basis, with agreements to buy a specific gem or commodity for delivery at a later date.

The costs of these purchases are "leveraged," or spread out over a period of time. A buyer makes a down payment and pays interest and other carrying charges over the life of a contract. Customers are "totally dependent" upon the continuing financial integrity of their dealer, a CFTC staff report stated.

"Such total dependence without any required segregation of funds or backing of the contract can only encourage the less savory elements to move into a legitimate enterprise using the now typical fraudulent and hyped-sales activities as we have seen in the sales of Florida swampland, aluminum siding and most recently in the sales of London options," Bagley said.

In his letter to SEC Chairman Harold Williams, Bagley said various SEC staff members across the country have contacted the CFTC about "this latest scam activity in diamonds." He called on the SEC to take immediate action under its authority to halt trading of diamonds as investments, "so that once again, innocent members of the public will not be victimized."

A letter to Ohio Attorney General William Brown noted that some states have complained that jurisdictional contraints prohibited them from taking action against options frauds.In this case, Bagley told Brown, "this new area of apparent scam activity in diamonds affords you a jubilee opportunity to effectively assert and implement all of you reinforcement powers."

In Southern California in the last four months, up to 10 firms have opened to sell diamonds by leverage. Arizona has identified 13 diamond firms in the Phoenix area and the CFTC said diamond sales are big in Florida too.

In another development, the De Beers central selling organization, which handles sales of 85 percent of all rough diamonds in the world, announced that a 15 percent surcharge will be added to the next sale of gems. A 40 per cent surcharge was imposed at the sale in March, to discourage a worldwide speculative binge in diamonds. The surcharge was cut to 25 percent at last month's sale.

Dow Jones News Service reported from London that the De Beers decision to reduce the extra fee means that a squeeze on the international rough diamond market has relaxed and that speculative trading as a hedge against currency prices has diminished.