BLING KING IN CUFFS

The King of Bling got caught in a sting.

Yakov Arabov had a pair of government bracelets unworthy of his Jacob
the Jeweler tag slapped on his wrists yesterday by federal agents.
He's accused of helping a Detroit-based gang called Black Mafia
Family hide their dirty drug dollars.

The Russian-born designer -- whose bold diamond-encrusted styles have
earned him a following that ranges from Jay-Z to Bono to Derek Jeter
- -- pleaded not guilty to a money-laundering charge during a brief
hearing in Manhattan Federal Court.

With his wife seated behind him, Arabov was ordered to appear in a
Michigan court July 10, then was freed on a $100,000 bond.

The man who recently boasted, "As long as I'm there, there's going to
be bling," was wearing none yesterday in a courtroom 4 1/2 miles from
his E.57th St. showroom, where he was arrested yesterday morning.

Dressed in a custom-made blue shirt and gray slacks, Arabov declined
to comment. "It's been a difficult, challenging day from what they
did to him," said attorney Daniel Gotlin.

"The arrest of Mr. Arabov is an unfortunate misunderstanding that we
believe will be straightened out in the next several weeks," a Jacob
& Co. spokeswoman said.

But Drug Enforcement Administration agents say there's no
misunderstanding at all.

In an indictment unsealed yesterday, federal prosecutors say Arabov,
41, took some of the $270 million generated by BMF cocaine sales and
turned it into platinum and gold. Prosecutors say Arabov not only
accepted large amounts of cash he knew came from drug dealing to pay
for jewelry, he then failed to report the transactions.

Among the two dozen pieces of jewelry found in gang members'
possession were an 18-karat rose gold watch, a platinum custom-made
necklace with 224 Asscher-cut diamonds and a platinum watch with
1.8-carat diamonds -- all made by Jacob & Co. of Manhattan.

Arabov was among 16 defendants added to a previous indictment handed
up in Michigan that accuses some two dozen members of BMF with
distributing 476 kilos of cocaine through Michigan, Kentucky,
Georgia, Texas and California since the early 1990s.

The gang used hidden compartments in cars to conceal drugs and bought
tricked-out sport-utility vehicles and other luxuries with their drug cash.

BMF's enormous cash flow -- much of it in small-denomination bills --
forced members to find ingenious ways to hide their ill-gotten gains.
Gang members even purchased Michigan lottery tickets from winners --
and cashed them in themselves, hiding the true source of the money.

Arabov emigrated from Uzbekistan as a 14-year-old and apprenticed in
Manhattan's Diamond District before opening Jacob & Co. in 1986.

Rapper Jay-Z wrote an ode to some of Jacobs' jewels in his 1999
release "Girl's Best Friend":

"I took you outta Jacob's in clusters/Busters they wanted to rush
us/Love the way you sparkle when the sun touch ya."

Last year, a music magazine counted 15 references to Arabov, who also
goes by Jacob Arabo, in songs.

Sports stars also are regular customers.

Jeter has picked up his bling at Jacob's. And Knick guard Stephon
Marbury claimed recently that he plunked down $1 million for his
fiancee's ring, two earrings and a bracelet.

At a recent charity event for English soccer star David Beckham,
Arabov crafted a white gold watch with 28 carats worth of diamonds
and rubies in the pattern of a world map that came with a $1 million price tag.