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The diamond was supposedly stolen by Theodore Avocados a long time ago.
Scooby-Doo! Mystery Incorporated
It was the object of a treasure search by Rung Ladderton, leading him to steal all the crystal door-knobs in Crystal Cove and transport them to his hiding place with the Ghost Truck. (The Secret of the Ghost Rig)
It was sent as part of a shipment of items from the Burlington Library to lend authenticity to the production of The Donkey That Saved Crystal Cove. It was used by Daphne Blake to decorate a staff carried by Shaggy Rogers, playing Friar Serra. George Avocados, son of the original thief, dressed up as the Mummy of Friar Serra to try to steal it.