Klein, who is a pilot instructor, was remanded out of custody to March 28 on US$5 000 bail.
He was ordered to surrender his passport and the title deeds of his Borrowdale house.
Klein was ordered to report twice a week at CID Serious Frauds.
He is being charged for unlawful possession of diamonds and contravening Section 12 (1) of the Immigration Act Chapter 4:02 which criminalises entry by evasion.
Klein is employed by CAL Airlines of Israel as a pilot instructor.
Prosecutor Ms Tracy Mundanga alleges that on March 17 this year, at around 11am, Klein intended to leave for South Africa on a South African Airways flight number SA23. It is alleged he was clad in a pilot’s uniform when he presented himself to the passenger screening point which was manned by a Civil Aviation Authority security officer Wendy Gomo.
As his two bags were being screened, it is alleged, the security officer noted that Klein was uneasy and shaky prompting her to make a physical check of the hand luggage which yielded the diamonds that were wrapped in a sealed plastic bag.
The State says detectives from the border control unit were called in and counted the stones which totalled 1 379.
Further searches were made and another 67 pieces were found again wrapped in a one United States dollar note stashed in the lining of the hand luggage.
Investigations revealed that Klein had arrived in the country the same day from South Africa aboard a South African flight as a passenger.
His passport was not stamped by immigration officers on arrival as he disguised himself as a crewmember, it is alleged.
It was also established that Klein had travelled on the said flight as a passenger and not as a crewmember.
The diamonds in question were taken to the Minerals Marketing Corporation of Zimbabwe for assay and weighed 1,7 kilogrammes with a caratage of 8486,66 valued at $2, 437 708.24.
It is the State’s contention that Klein had no permit or licence to deal in diamonds and had no right to evade immigration officials after disguising himself as a crew member.