This may sound like the plot for a fast-paced thriller - indeed a Hollywood studio is considering a film of the affair - but it is a real-life tale of robbery and fraud that went hideously out of control, and has thrown Thailand into the most ghastly diplomatic mess.
The man who holds the key to the mystery, a Thai jeweller called Santi Sithanakan, is being held by the police in Bangkok as a state witness. But his wife and child were murdered last month, he is in fear of his own life, and the stakes are so high that most Thais think the truth will never come out.
The story began five years ago, when a Thai labourer Kriangkrai Techamong joined the hundreds of thousands of Thais who have gone to Middle Eastern countries as contract labourers, sending home their earnings to their families. In 1989 one-quarter of a million Thais were working in Saudi Arabia alone.
Kriangkrai found a job as a gardener in the palace of Prince Faisal Fahd Abdulaziz. One day, according to police, he slipped into the house and stole pounds 12m worth of jewels belonging to the prince. He fled Saudi Arabia and brought the jewels, weighing some 200lb, back to his home town of Phrae in northern Thailand.
There he tried to sell some of them to local jewellers, but rumours about the size and value of his hoard, which included diamond-studded watches, necklaces heavy with jewels and one 50-carat diamond, soon leaked out and Santi, who had a larger jewellery business, became involved. Santi is thought to have bought most of the jewels, whose true value he quickly recognised.
The Saudi authorities, meanwhile, had complained to Thailand about the theft. Police quickly tracked down Kriangkrai in January 1990, arrested him and took back the jewels. In March of that year, the police handed over the jewels to Saudi Arabia in a public ceremony, designed to show how efficiently they had done their job, and to strengthen the cordial relations between Thailand and the Gulf state. Kriangkrai was found guilty of theft and sentenced to five years.
But, according to Mohammed Said Khoja, the charge d'affaires at the Saudi embassy in Bangkok, when the jewels were returned it was discovered that some were missing - and on closer inspection, it turned out that most of those that had been given back were paste.
Khoja believes that the man responsible for the imitations is Santi. 'He is the one who changed the genuine stones for the fakes,' he says. 'He is the key.' The Saudis protested to the Thai government, which responded by setting up the first of a series of 'investigation committees' - but to this day none of the police investigations has yet got to the bottom of the affair.
Then the killings began. In 1990, three Saudi diplomats and a Saudi businessman were shot dead in Bangkok: Khoja will not go into details, but says all four were in some way involved with the attempt to regain the jewels, and claims that they were killed because they had important information. A Thai policeman was also killed. The police denied that the murder was linked with the jewels but they promised to step up their investigations.
Then the Saudis became convinced that the Thai police were involved in a huge cover-up, that the jewels had been distributed among some influential people at the top of Thai society, and that many of these people would not stop at killing to protect themselves.
The kingdom retaliated by stopping new visas to Thai labourers - the number of Thais in Saudi Arabia has plummeted to just 20,000. But despite an estimated loss to Thailand of about dollars 14bn (pounds 8.75bn) in remittances from workers in the four years since the visa ban, little progress was made in recovering the jewels.
In June 1991, after unrelenting pressure from Riyadh, the Thai police reopened the case, miraculously discovered some of the jewels - albeit a fraction of the total hoard - and charged four civilians with receiving stolen property. Jewels worth pounds 75,000 were returned but the Saudis were not placated. They insisted the rest of the stolen property be tracked down.
For three years the case festered, as the Saudis issued ritual protests and the Thai police did nothing. Then last month the jewels claimed two more lives: Santi's wife and 14-year-old son. Their bodies were found in a white Mercedes on a road north of Bangkok: both had been killed with heavy blows to the back of the head, though the murderers had attempted to disguise the scene as a traffic accident.
The reason for their killing is still unclear. At first it seemed they had been murdered to stop Santi from revealing what he knew. But it is emerging that he may have paid a pounds 100,000 ransom for his wife and child, and that some kind of extortion attempt may have gone wrong.
Whatever the reason, it is clear that Santi is a marked man. 'I know that he fears for his life, and he has good reason to feel that way,' said Chuan Leekpai, the Prime Minister of Thailand, who met the jeweller after he turned himself in to the police 10 days ago. 'There will be no place in the world that is safe for him.'
Certainly, the Saudi charge d'affaires thinks the case could be solved if Santi reveals what he knows. Two police generals have been charged in connection with the murder of Santi's wife and son, and 15 others implicated. 'The murder is not my business, but I believe it will lead to the people who stole the jewellery,' Khoja said.
In the meantime, he is writing a book about the affair, and has been approached by a Hollywood studio. 'It will be better than Agatha Christie,' he says. 'The mystery is unbelievable.'
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