Store owners arrested in fake jewel heist

NEW YORK, Feb. 24 (UPI) -- Owners of a wholesaler in New York's Diamond District were arrested on charges of staging a theft of millions of dollars' worth of precious gems, police said.

Atul Shah, 48, and Mahaveer Kankariya, 43, owners of Dialite Imports, were heavily in debt and devised the fake theft to collect on an insurance policy, the New York Post reported Wednesday. The jewels -- insured for $9.2 million -- have not been recovered.

"The whole thing was set up," a police officer said.

When the owners, arrested Tuesday, reported the Dec. 31, 2008, robbery, they claimed two men disguised as Hasidic Jews flashed guns after being let into the store then fled with their haul of diamonds, emeralds, sapphires and jewelry from the safe.

However, surveillance cameras inside the store showed the owners removing the jewels from the safe hours before the alleged robbery. The owners thought they had disabled the cameras, the Post said.

Shah and Kankariya were charged with grand larceny, insurance fraud and falsifying business records, police said.

Neither Shah nor Kankariya has collected any of the insurance.

The fake robbers, whom police said the store owners hired, remain at large.