Today,
expensive rubies are still substituted for by spinel in much the same
way a diamond is substituted by cubic zirconia. Not to commit a fraud
or theft but to prevent one. Spinel may take the place of a ruby that
would have been displayed in public by an owner who is insecure about
the rubies safety. The spinel probably is still valuable but better
to lose a $100,000 dollar spinel than a $1 million dollar ruby!
Spinel
and ruby are chemically similar. Spinel is magnesium aluminum oxide
and ruby is aluminum oxide. This is probably why the two are similar
in a few properties. Not suprisingly, the red coloring agent in both
gems is the same element, chromium. Spinel and Ruby also have similar
luster (refractive index), density and hardness. Although ruby is considerably
harder (9) than spinel, spinel's hardness (7.5 - 8) still makes it one
of the hardest minerals in nature.
Spinel
may be the poorer cousin of ruby, but its pinker color and other qualities
make it attractive in its own right. Spinel typically forms in well
formed octahedrons. But it is famous for a type of twinning that bears
its name, the Spinel Twin Law. Spinel Law twinning is also found in
other isometric minerals such as diamond, galena, cristobalite, magnetite,
franklinite and other members of the spinel group. This type of twinning
produces a twin plane that is parallel to one of the octahedral faces.
The plane acts as a mirror plane and produces a left and right side
that are mirror images of each other. This may not sound all that spectacular
for a very symmetrical mineral like spinel which is loaded with mirror
planes. However this mirror plane is not parallel to any of the others
and actually lowers the symmetry of the crystal (only in appearances
though). 
A good description of the twin is hard to explain, but here it goes. The plane falls (of course) in the center of the crystal, dividing it in half. The two octahedron faces parallel to the twin plane are equilateral triangles. Each point of the triangles is doubled across the twin plane with an indentation between them. The crystal looks like it has trigonal symmetry, but the three indentations are a clue that this crystal is a twin. Twins of spinel are rare, but their popularity makes them readily available on the market.
Now that the mines of Badakhshan have been resigned to ancient history in terms of market supply, the Mogok Stone Tract in Upper Burma is universally recognized to be the premier producer of red, pink and orange spinel. Sri Lanka also produces small quantities of fine quality spinels, mostly in the blue and violet colors. Tanzania and Madagascar also produce spinels of all colors, while black spinel is recovered alongside blue and midnight blue sapphire in Kanchanaburi, Thailand. However, similar to ruby and sapphire, out of all of these sources, only two locations matter when it comes to kudos - Mogok for red spinel, Ceylon for cobalt blue. Spinel is not traditionally enhanced.
PHYSICAL CHARACTERISTICS:
Color is red, green, blue, purple, brown, and black; but red is by far
the more common color.
Luster is vitreous.
Transparency: Crystals are transparent to translucent and sometimes
nearly opaque.
Crystal System: Isometric; 4/m bar 3 2/m
Crystal Habits include the typical octahedron, but can be found as dodecahedrons
and combinations of other isometric forms. Also as rounded grains in
alluvial placer deposits.
Cleavage: None
Fracture is conchoidal.
Hardness is 7.5-8.0
Specific Gravity is 3.6-4.0
Streak is white.
Other Characteristics: index of refraction is approximately 1.71 - 1.76
and rutile inclusions may produce six or four rayed stars or asterisms.
Associated Minerals include calcite, dolomite, corundum and garnets.
Notable Occurrences include Burma, Sri Lanka, Brazil and Afghanistan.
Best Field Indicators are twinned crystals if present, color, hardness,
density and locality.

Spinel
is a very attractive and historically important gemstone mineral. Its
typical red color, although pinker, rivals the color of ruby. In fact,
many rubies, of notable fame belonging to crown jewel collections, were
found to actually be spinels. Perhaps the greatest mistake is the Black
Prince's Ruby set in the British Imperial State Crown. Whether these
mistakes were accidents or clever substitutions of precious rubies for
the less valuable spinels by risk taking jewelers, history is unclear.
The misidentification is meaningless in terms of the value of these
gems for even spinel carries a considerable amount of worth and these
stones are priceless based on their history, let alone their carat weight
and pedigree.