Jacob the Jeweler Pleads Guilty, Money Laundering Charges Dropped

Celebrity jeweler Jacob Arabov, known among the stars whom he bejewels as Jacob the Jeweler, pleaded guilty yesterday (Wednesday) to falsifying records and giving false statements to investigators looking into a multi-state drug operation.

Under the terms of the plea, Arabov will serve a maximum of 46 months in prison and pay a penalty of $2 million, said U.S. Attorney Stephen J. Murphy. No sentencing date has been set as of yet. In return for the guilty plea, prosecutors agreed to drop charges of money laundering.

“I realize I have made a terrible mistake and I accept the consequences of my actions,” Arabov said in a release issued through his attorney, Benjamin Brafman.

Following his arrest in June 2006, Arabov, with others, was accused by authorities of conspiring to launder about $270 million in drug profits for the “Black Mafia Family,” a drug ring operating out of the Detroit area. Federal authorities revealed that about 1,100 pounds of cocaine and $19 million in cash and other assets have been seized since 2000.

As a result of the seven-year investigation, Arabov and 41 other people were indicted. Twenty-eight have pleaded guilty, eight are scheduled for trial November 19, and the whereabouts of six others are unknown.