Published: April 18, 2011
Manhattan jeweler and Americana collector Ralph O. Esmerian pleaded guilty on April 15 in the Southern District of New York to three charges stemming from a bankruptcy fraud scheme in 2008. Esmerian was charged with submitting false statements in an effort to defraud creditors in a bankruptcy case, concealment of assets and wire fraud.
Esmerian, 71, the former owner of the exclusive jeweler Fred Leighton and former president of the American Folk Art Museum in New York City, was arrested November 22, 2010, on the fraud charges. Federal prosecutors accused him of attempting to hide millions in assets during a bankruptcy proceeding.
According to court documents, prosecutors said that Esmerian, who had borrowed $177 million from Merrill Lynch to buy Fred Leighton, subsequently offered for sale, and in some instances sold, the collateral he had pledged to Merrill without notifying the lender. In the original complaint, descriptions of some of these items included a Lalique gold enamel necklace belonging to Sarah Bernhardt valued at $858,500, a golden album commissioned by Marie Antoinette in 1781 worth an estimated $1.5 million, and a piece known as the “Endymion Butterfly Brooch” for $2.45 million.
Prosecutors also accused Esmerian of “double pledging” the same items to obtain additional loans from other institutions, including $40 million from Acorn Capital Group LLC.
For purposes of sentencing, the parties agreed that the damages as a result of his crimes were not less than $20 million. As a result of this plea, Esmerian faces between eight and ten years in prison. His sentencing is scheduled for July 22.
“It’s a very sad day for Mr Esmerian and his family,” Esmerian’s lawyer Patricia Pileggi was quoted by Bloomberg as saying outside the courtroom. Esmerian and his family “have been collecting fine antique jewelry for four generations and today everything is gone. He has nothing.”
Another victim of Esmerian’s dealings is the American Folk Art Museum on West 53rd Street, which lost a key promised gift, Edward Hicks’ (1780‱849) “The Peaceable Kingdom,” the Bucks County. Penn., artist’s iconic interpretation of biblical paradise. That pillar of the museum’s collection, along with eight other objects, was removed when Merrill Lynch forced its sale at Sotheby’s in 2008 to collect money it was owed by Esmerian, the museum’s trustee emeritus. ‼i>WD
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