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Monday, April 18, 2011

Ralph O. Esmerian Pleads Guilty to Fraud

Former owner of Fred Leighton Jewelry, Ralph Esmerian, on February 19, 2007.  (Photo by Marsaili McGrath/Getty Images)

The former owner of Fred Leighton pled guilty to bankruptcy fraud and other crimes Friday in a U.S. District Court in New York.

Ralph O. Esmerian pled guilty to a three-count indictment charging him with wire fraud, bankruptcy fraud and concealment of assets before U.S. District Judge Denise Cote, according to media reports.

Fred Leighton specializes in vintage jewelry and is often referred to as the “Jeweler to the Stars,” where its museum-quality jewelry, rare artifacts and gems are often found on well-known actors and celebrities during “Red Carpet” events. Esmerian bought Fred Leighton in 2005 as a retail outlet for the inventory of his company, R. Esmerian Inc. (Left photo: Nicole Kidman in a 150-ct. 19th Century Riviere diamond necklace by Fred Leighton at the 2011 Oscars. )

Prosecutors from the Manhattan U.S. Attorney’s office said in November, at the time the charges were filed, that Esmerian borrowed $210 million against the jewels to help finance his businesses. About $177 million was borrowed from Merrill Lynch Mortgage Capital Inc. to buy Fred Leighton, a rare antique and vintage jewelry dealer, according to media reports.

Esmerian reportedly told Cote that the assets and jewels he had embezzled and double-pledged were worth at least $20 million, according to reports. Assistant U.S. Attorney David Massey told the judge that the government valued the assets at between $20 million to $50 million.

under a plea agreement, Esmerian faces from 97 months to ten years in prison when he is sentenced on July 22, according to reports. He could have faced 30 years in prison.

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