Former Fred Leighton Owner Pleads Guilty

Ralph Esmerian, the 70-year-old former head of Fred Leighton
and well-regarded rare gem dealer, pled guilty April 15 to three charges of
wire fraud, bankruptcy fraud, and concealment of assets, according to a statement
from the U.S. Attorney for the Southern District of New York.

The statement says that Esmerian financed his 2006 purchase
of Fred Leighton with $200 million in loans, secured by Fred Leighton inventory.
However, unbeknown to his lenders, Esmerian sold $5 million worth of his
pledged collateral to a third party, and double-pledged over $6 million worth
of collateral to secure additional loans, the U.S. Attorney alleges.

Esmerian was also charged with selling collateral in
violation of a January 2008 court restraining order, and lying to a federal bankruptcy
court following the company’s 2008 Chapter 11 filing.

Esmerian faces a maximum sentence of 30 years in prison, and
must pay restitution to the victims of his offense. He will be sentenced July
22.

Esmerian has nothing to do with the current Fred Leighton,
according to its management.  The company
was purchased in 2009 by jewelry manufacturer Kwiat.

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