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It sparked calls for Monaco to scrap an exhibition to mark the 40th anniversary of Picasso's death using paintings from the collection of his 65-year old father David, a Monaco resident. Naftalis, one of the assistant United States attorneys prosecuting the case, told the judge that Mr Nahmad provided the gambling business millions of dollars transferred from his father's Swiss bank account.

This week, Mr Brafman, insisted that David Nahmad, who set up the family's gallery in the 1970s, at the corner of Madison Avenue and 76th Street, had no involvement in any wrongdoing.

The gallery was raided on Tuesday as part of the investigation, authorities said.

According to an 83-page indictment unsealed on Tuesday, Tokhtakhounov ran a sports-betting ring that catered to Russian oligarchs in the former Soviet Union, and laundered proceeds through Cyprus banks to the United States.

Tokhtakhounov remains outside of the United States, and that case has not gone to trial.

Also charged was Hillel "Helly" Nahmad, a leading international art dealer and the owner of an exclusive art gallery that bears his name inside Midtown Manhattan's posh Carlyle Hotel.

Federal authorities have charged a prominent New York art dealer and one of Russia's top reputed mobsters with operating high-stakes gambling rings in New York and Los Angeles that catered to billionaires, bank executives, movie stars and professional athletes.

Among 34 people indicted on Tuesday are suspected Russian organized crime figure Alimzhan Tokhtakhounov, who was charged in 2002 with plotting to rig sports events at the Salt Lake City Winter Olympics.

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Hillel 'Helly' Nahmad, Molly Bloom and the 32 others were charged this week with racketeering, extortion, money laundering and illegal gambling, including threats of violence to make sure customers paid their debts. According to a former school official, he was expelled in his senior year for "unclear" reasons.Nahmad has refuted this retelling and states he missed school while traveling and turned down an opportunity to repeat his senior year.A winter warmer while you're sploshing round the January sales…Nahmad attended the private Dalton School in New York's Upper East Side.

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