[ljoshua]

I was curious about that particular aspect as well. A little Googling brought me to this rather interesting account of Silver Bears and the market forces at play:

http://www.edwardjayepstein.com/diamond/chap17.htm

(tl;dr: though unconfirmed a noted diamond expert believed the Soviets had created a diamond cutting machine instead of relying on human cutters, though others disputed the idea.)

[milcron]

It sounds as though they were creating gem-quality synthetic diamonds but kept it on the down-low, and used their Siberian mines as cover.

[ericfranklin]

Even today there are only a couple places in the former Soviet Union that can grow gem-quality synthetic white diamonds. Their production numbers are far less than the output of a single mine, and the results are still rather random. Prior to 2004 or so, the only synthetic diamonds that could be produced commercially were colored and primarily industrial-grade.

[milcron]

Well, I say "gem-quality" because the article did, but it also points out that the diamonds were a greenish color, and incredibly consistent in size and quality.

When DeBeers finally got a 20-minute tour of the Siberian mine, far less earth had been excavated than they expected for the number of diamonds that the USSR sold.

There are many additional circumstantial details in the article.

[atemerev]

Doubtful, for several reasons:

1) Synthetic colorless gem-grade diamonds are difficult to make (they can be produced today, about 2-3 times cheaper than natural diamonds, but in small quantities -- and synthetic industrial-grade diamonds are also quite profitable, with significantly larger and accessible market -- but much easier to create).

2) Synthetic diamonds are relatively easy to identify (with microscope and ultraviolet light source)

3) Even today, Russian-sourced gem grade diamonds are somewhat less diverse in size and quality than their non-Russian counterparts -- and their provenance is well documented.