You change the entire feel and motivation of reporting things to SC if you give gems as rewards.
Barring the fact that account verification is needed, and a policy for people finding the same thing and reporting at about the same time (which both are a nightmare to work with), you'll still create tension and resentment with money hungry players doing it for the gems and feel jipped if they don't get thier reward.
Sure, reports may go up, though I don't know about the quality of the reports, but the aspects of people going a little crazy from the reward grabbing might be too much for SC to be willing to handle.
Nice idea, but the bad part of human nature may ruin it.
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