A Diamond Dealer’s Best Buyer Sells Nassau Street Condo for $1.3 M.

African diamonds and Manhattan real estate go well together. Kingpin Lev Leviev, for example, has massive diamond plants in Angola and Namibia, but also just bought the old New York Times building on West 43rd Street. Mr. Leviev’s former development partner, Shaya Boymelgreen, has also been involved in the trade, as has developer Gary Barnett, who’s now building a tower in the diamond district.

And Israeli-born businessman Yitzchak Tessler dealt diamonds in South Africa before coming to New York and developing condos. His most loyal apartment buyer, city records show, is longtime friend Harbinder Singh Sethi, a South Africa-based property investor with rumored ties to powerful political players.

“We were in the diamond business, and Sethi used to help us whenever we needed him to,” said Prudential Douglas Elliman vice president Efraim Tessler, the developer’s son—and a real estate broker for Mr. Sethi. “Diamonds is a cash business,” he explained later. “Sometimes you need something immediate. And aside from that, he was just nice to my family for a long time.”

In 2003, Mr. Sethi paid $1.856 million for two 1,305-square-foot two-bedroom apartments at 150 Nassau Street, the landmark Romanesque building that Mr. Tessler just converted to condos.

Then why did he make such little profit? He seems to have sold off the properties in a rush. According to condo president Harold Schertz, the apartments were facing foreclosure, which he blames on technical glitches at the bank. Mr. Sethi “didn’t have a financial problem,” he said.

But that wasn’t the only money oddity. In March 2003, Mr. Sethi signed a $1.975 million contract for an apartment at 260 Park Avenue South, another Tessler project. “And then when it came time to close,” said the developer’s son Efraim, “[Sethi] said he wasn’t ready, didn’t have the money, whatever it was; he also at that time had some personal tragedy. So my father says, ‘Come, I’ll do it with you.’ And they did it together.”

Indeed, city records show that Yitzchak Tessler is on the deed with Mr. Sethi—which means that the developer helped his friend buy an apartment at his own project. But Mr. Sethi wasn’t starved for funds: One month earlier, he bought a $1.725 million condo at 100 West 58th Street, yet another Tessler project.

Things get weirder from there. Earlier this year, a report by a British company—leaked to the Internet and then The Guardian newspaper—said that Kenya’s ex-president Daniel arap Moi’s circle had funneled state funds into million-dollar properties in New York, London and South Africa. Mr. Sethi was named as a “front man” for President Moi’s son Gideon in property deals.

“No, no, no, no, nothing like that,” Mr. Sethi told The Observer. “Incorrect! I never deal with them.” He said these New York apartments are simply his own investments; in fact, he’d wanted to combine the 150 Nassau Street units into a duplex for his daughter. “But now she’s living in London,” Mr. Sethi said.

A Diamond Dealer’s Best Buyer Sells Nassau Street Condo for $1.3 M.