Mob Con Artist in Prison, But No Insurance Payout for Jewelry Store

Jennifer Lopez probably would have looked great in the five pieces that Crown Jewels Estate Jewelry loaned to a purported Sony Pictures producer for a shooting with the actress in Miami.

But there was no shooting and no movie producer. The “Paul Castellana” who had emailed the Manhattan jewelry store in March 2017 was actually one James Sabatino, a member of the Gambino organized crime family. He had communicated with Crown Jewels from cell phones while being held at the Federal Detention Center in Miami.

The owners of Crown Jewels learned last week that there was no insurance coverage for the missing jewelry, valued at $2.09 million. The 1st New York Appellate Division affirmed a trial court ruling that Lloyd’s of London had properly denied the jewelry retailer’s claim because of a dishonest entrustment exclusion.

“The loss of plaintiff’s jewelry resulted from theft or an act of dishonest character on the part of the persons to whom the jewelry was entrusted,” the appellate panel said. “It is irrelevant to whom or for what purpose the jewelry was actually or intended to be entrusted.”

Sabatino — also known as James or Jimmy Prolima, James Harvey, Lenny Santiago, Jimmy Gutta, Samuel Castro, Andrew Kronfeld and Paul Marino — is a legendary Miami con artist, according to a report in the Miami Herald. In 2002 he went to prison for posing as a music executive while running up hundreds of thousands unpaid tabs at Miami resorts. He also pretended to be an entertainment mogul to acquire hundreds of free Super Bowl tickets, the newspaper said.

Crown Jewels was one of at least 10 jewelry retailers that he scammed, most in Manhattan. Cartier, Judith Leiber Couture, and Tiffany & Co. were among the victims.

According to charging papers, Sabatino bought five cell phones from correctional officers at the detention center to create email addresses that looked like they were legitimately connected to Sony Pictures International or Universal Studios. To rip off Crown Jewels, he created a fake insurance certificate and gave the jeweler a contact number to a person who could confirm that it was legitimate. The contact information matched the person’s contact information on the insurance company’s website.

In the Crown Jewels caper, Sabatino sent an associate to the store to collect the “loaned” jewelry. But other victims mailed jewelry, watches, designer handbags and shoes to various South Florida addresses, never to be seen again.

The scheme was uncovered when federal corrections officials conducted a surprise search and found Sabatino on the phone in his cell. Prosecutors say Sabatino brought in $10 million through the scheme.

John J. Kennedy, president of the Jewelers’ Security Alliance in New York City, said jewelers in the city are now well aware of Sabatino’s scams.

“Mr. Sabatino was a very active man who hit a lot of people in the industry,” Kennedy said. “He is very clever man, this Mr. Sabatino.”

Kennedy said jewelers are vulnerable because they often loan jewelry to celebrities for marketing purposes.

“Look at the Oscars. When you have something lent out for the Oscars and you’re on the red carpet, you can have 20 million people that hear your name.”

Jewelry business employees can become inured over time to the risks associated with handling high-value merchandise and fail to follow best practices, he said. Con artists look for weak links. They know, for instance, that if they call on a Friday before a holiday weekend the boss probably won’t be in the store.

To protect themselves, jewelers should independently verify any information given to them — they never should rely on a phone number given to them by the person making the request, Kennedy said.

“If it says American Insurance Group, you find the number for American Insurance Group and if it takes half an hour talking to an assistant, that’s what you do.”

Crown Jewels won’t get any reimbursement from Lloyd’s, but Sabatino is doing his time. He was sentenced to 20 years in prison, which he is serving at a federal maximum-security prison near Florence, Colorado. In a plea deal with prosecutors, Sabatino admitted to his crimes and also that he had ordered rivals to be murdered.

The judgment orders Sabatino and three co-defendants to pay their victims $10,394,527 in restitution. Also, Sabatino is prohibited from having contact with anyone while in prison except for two attorneys and his stepmother, Carole Fardette.

Although Sabatino is incarcerated, the courts haven’t heard the last of him. On May 10, his lawyers filed paperwork with the U.S. District Court in Miami seeking clarification as to whether the sentencing restrictions prohibit Sabatino from making Freedom of Information Act requests to the FBI.