By  on November 1, 2007

Jacob Arabov, known as "Jacob the Jeweler'' and the "King of Bling'' for his extravagant creations for hip-hop stars and other celebrities, pleaded guilty Wednesday to falsifying records and lying to a federal agent in a drug investigation.Under terms of a plea bargain with U.S. prosecutors in Detroit, Arabov faces 37 to 46 months in prison and a $2 million penalty — the average cost of a Jacob & Co. diamond engagement ring. Arabov, 42, was arrested on June 15, 2006, at his Manhattan headquarters on charges of laundering more than $270 million in narcotics proceeds for a Detroit-based drug ring called the Black Mafia Family. The money-laundering charges will be dropped when he is sentenced next year by U.S. District Court Judge Avern Cohn. Arabov could have been sentenced to as much as 20 years in prison, if convicted.Defense lawyer Benjamin Brafman said the plea deal does not require Arabov to be a cooperating witness.In a statement from Brafman's office, Arabov said, "I have always been blessed with good fortune and loving friends and family. I realize I have made a terrible mistake and I accept the consequences of my actions. America is the greatest country on earth and I have great regret that I violated the law. My desire is to do whatever I can to atone for my wrongdoings and move ahead with the great business I have built and the wonderful family that I love."Brafman said his client hoped for leniency. "We are pleased that the government has dismissed the money-laundering charges and that Mr. Arabov has accepted responsibility for his [part] in this case," he said. "We are hopeful that the judge will recognize all of Mr. Arabov's accomplishments and hope that he will provide the most lenient sentence possible."Arabov, whose clients have included Jay-Z, Beyoncé Knowles and Victoria Beckham, had a swift rise after immigrating to the U.S. from Tashkent, Uzbekistan. He started his career with a booth in New York's Diamond District, and got his big break when Faith Evans, wife of the late rapper Notorious B.I.G., told her husband about Arabov. The hip-hop community became infatuated with Arabov, referencing the jeweler in songs and even giving him cameo appearances in their music videos. In 2004, he acquired a building at 48 East 57th Street, which is the home to his sole store, Jacob & Co.In addition to the blinding selection of high-carat diamonds and oversize watches with five time zones, customers are accustomed to seeing Arabov in the store, which is meant to look like a diamond mine with its walls of striated white Corian. Prices start in the low thousands and go into the millions of dollars.Arabov is hands-on with the 21-year-old firm, which he built on personal relationships with clients both famous and not so famous. He personally accepts commissions on custom designs and projects from big spenders and even made a chess set of pavé gemstones and sold an engagement ring to a man who had yet to find a bride. In 2005, Arabov told WWD that 30 percent of his sales come from personal orders. A prison sentence would undoubtedly put a damper on his way of doing business.

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