The former owner of rare-jewelry seller Fred Leighton was arrested Monday and charged with engaging in a fraud and embezzlement scheme that caused the company to enter bankruptcy protection in 2008.
The U.S. Attorney's Office for New York's Southern District said Monday that Ralph Esmerian, who bought the jewelry company in 2006, stole more than $40 million worth of company property between April 2008 and November 2009 and used it to secure more than $210 million in loans, both to buy the company and for personal use.
In one case, Esmerian sold a diamond brooch -- one that had been used as collateral for a loan from Merrill Lynch -- for $2.5 million and pocketed about $1 million, according to the U.S. Attorney's Office, which also is charging Esmerian with bankruptcy fraud.
Esmerian, 70, was arrested Monday in New York and may face penalties of up to 30 years. Kwiat Enterprises acquired Fred Leighton, which has stores in New York and Las Vegas, for about $25 million in 2009.
Esmerian was released late Monday on $3.5 million bail.