(AP) †A noted New York City jeweler who collected baubles worth millions of dollars and ran boutiques that decorated celebrities and fashion models in eye-catching opulence was arrested Monday, November 22, on fraud charges.

Ralph Esmerian, the former owner of the ultra-high-end jeweler Fred Leighton, was accused by federal prosecutors of trying to hide $40 million in assets during a bankruptcy proceeding.

Esmerian had pledged a fortune in vintage jewelry as collateral to Merrill Lynch when he obtained $177 million in loans to buy Fred Leighton in 2006, postal inspectors who investigated the case said in a court filing.

But after the company’s finances disintegrated, they said he secretly sold off some of those pieces and improperly double-pledged others to get millions of dollars in new loans.

One brooch, called the Endymion Butterfly in court papers, sold for $2.2 million. Investigators said Esmerian pocketed $1 million from the deal, then, when confronted by Merrill Lynch about the missing jewels, dipped even deeper into inventory he didn’t own to try to buy the piece back.

Among the items he sold, according to the court complaint, were two century-old Art Nouveau brooches that belonged to a private collector, each worth about $1 million. Other embezzled property, according to prosecutors, included an 1887 diamond brooch worth $1.5 million and an 1894 diamond and ruby butterfly brooch worth $2.5 million.

Esmerian’s attorney did not immediately return phone messages.

Fred Leighton was purchased by new owners during the bankruptcy court proceeding in 2009. The company’s current chief executive, Greg Kwiat, said Esmerian has had nothing to do with Fred Leighton since 2009.

The jeweler’s vintage treasurers are a staple on the red carpet at the Academy Awards and in the pages of fashion magazines.

Before his purchase of Fred Leighton, Esmerian’s claim to fame had been as a collector of museum-quality jewelry and as a wholesaler of precious gems.