American Folk Art Museum chairman emeritus and pioneering folk art collector Ralph Esmerian, 71, was sentenced on Friday 22 July to six years in federal prison along with 1,800 days of community service. He was also ordered to pay a $20m fine for bankruptcy, wire fraud and other charges.

According to court papers, Esmerian had double pledged millions in collateral to obtain $210m in loans to purchase and operate the Madison Avenue jeweller Fred Leighton, known for gems once belonging to Marie Antoinette and a Hollywood clientele favoring vintage jewellery.

At the sentencing, US District Court Judge Denise Cote said that Esmerian "lived a life of fraud and deceit on a massive scale".

In the Southern District Court of New York on 15 April, Esmerian had entered a guilty plea forgoing his trial. At the hearing, Judge Cote asked Esmerian, “Did you understand you were violating the law?” and he replied, “I knew it was something wrong.”

The prosecutor David Massey said Esmerian had “embezzled, concealed and converted to [his] own use debtor property worth at least $20m”. Esmerian borrowed $177m from Merrill Lynch Mortgage Capital Inc in 2005 and 2006 and during that time sold pledged collateral valued at $5m and doubled pledged $6m in collateral to obtain a $40m loan from another lender.