Known jewelry collector Ralph Emserian charged in fraud scheme

November 22, 2010 9:16:51 AM PST
Ralph Esmerian was taken into custody by U.S. postal inspectors at his girlfriend's apartment this morning.

He will appear in federal court in Lower Manhattan later today.

Esmerian was charged with lying to Postal Inspectors about embezzling and double pledging more than $210 million in loans used to finance luxury retailer Fred Leighton Jewelry.

Esmerian, a fourth-generation jeweler, bought Fred Leighton Jewelry in 2006.

He gained fame by lending jewelry to celebrities and museums for years.

But weighed down by about $181 million in debt, he sought Chapter 11 bankruptcy protection for Fred Leighton two years ago.

Merrill Lynch tried to force the auction of the rare jewelry in 2008 in order to repay its debt, but the auction was called off after the bankruptcy filing.

All of Fred Leighton's assets were acquired last year for $25.8 million.