Three New York jewelry dealers have been charged with laundering around $1.5 million in drug money for South American drug dealers.

In what might prove to be a further blow to the prestige of Manhattan’s Diamond District, it is alleged that, Ebrahim Raphael, Hamid Delshad and Yitzchak Hirschfeld exchanged bags filled with cash for checks drawn from the defendants' business accounts in return for a 6 percent fee.

According to reports, Raphael and Delshad are owners of Princess Gold Manufacturers Inc. that was also charged together with Hirschfeld’s Intense & Vivid Inc.

The transactions, disguised as jewelry or gem deals, allowed dealers to deposit the checks, then wire the funds to Colombia, Venezuela and other destinations.

Investigators from the Internal Revenue Service, Drug Enforcement Administration and New York Police estimated that about $1.5 million in drug money was laundered by the three.

The defendants, posted $250,000 in bail after their arraignment.

Recent money laundering investigations have produced three convictions and seven guilty pleas from Diamond District defendants.

Another defendant, Eduard Nektalov, was shot and killed in May before he could go to trial. Police said they believe the killing was an organized crime hit.