MANHATTAN (CN) – Ralph Esmerian, former owner of luxury jeweler Fred Leighton, was sentenced Friday to 6 years in federal prison for wire fraud, bankruptcy fraud, and other charges, including double-pledging tens of millions of dollars in collateral to get $210 million in loans to buy and operate Fred Leighton.
While borrowing $177 from Merrill Lynch in 2005 and 2006, Esmerian sold $5 million worth of pleaded collateral, and double-pledged another $6 million worth to get a $40 million loan from another lender, the U.S. Attorney’s Office said in announcing the sentence.
Then in 2008, Esmerian had Fred Leighton file for bankruptcy, and during those proceedings, “despite orders of the Bankruptcy Court, Esmerian repeatedly and systematically embezzled tens of millions of dollars worth of property of Fred Leighton and related debtor entities, sold that property, and kept the proceeds for himself or to pay off other debts,” prosecutors said.
Esmerian, 71, also was ordered to forfeit $20 million and do 1,800 hours of community service.
In sentencing him on Friday, July 22, U.S. District Judge Denise Cote told Esmerian he had “lived a life of fraud and deceit on a massive scale.”