Former Fred Leighton Head Pleads Guilty

Former Fred Leighton head Ralph Esmerian pleaded 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 Esmerian financed his 2006 purchase of Fred Leighton with $200 million in loans, secured by Fred Leighton inventory. However, unbeknownst to his lenders, he also sold $5 million of his pledged collateral to a third party and double-pledged more than $6 million in collateral to secure additional loans, the U.S. Attorney said.

The 70-year-old gem dealer 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. He 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.

Fred Leighton was purchased by Kwiat in 2007, and Esmerian no longer has anything to do with the company, it said.