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Monday, November 22, 2010

Ralph Esmerian, owner of celebrity jeweler Fred Leighton, arrested on fraud charges

Famed Manhattan jeweler-to-the-stars Ralph Esmerian was arrested Monday on fraud charges, according to law enforcement officials.

U.S. postal inspectors are accusing Esmerian, the head of high-end bling emporium Fred Leighton, of lying and double-dealing in connection with more than $210 million in loans used to finance his company.

He was arrested at his girlfriend's swanky Tudor City apartment early Monday and is expected to be arraigned in Manhattan Federal Court, according to Postal Inspector officials.

The fourth-generation jeweler has loaned baubles to movies stars, museums and others, and the company also has a collection of valuable artwork.

In 2005, Esmerian, 69, attempted to expand his company through a series of loans - including $177 million from Merrill Lynch and $40 million from Acorn Capital Group.

The feds claim he secured different loans with the same jewelry and then sold some of it, including a $10 million butterfly brooch.

Later, in 2008, the company declared bankruptcy. Esmerian allegedly embezzled property from Fred Leighton, sold it and kept the money for himself, sources said.

He stands accused of lying about the location of millions of dollars of missing collateral. Some of the fraud was discovered by Merrill Lynch, and some was discovered during the bankruptcy proceedings.

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