NEW YORK — A Jewish gem dealer was the go-between in a terrorist missile and money-laundering scheme, prosecutors charged Tuesday.

Yehuda Abraham, the 75-year old president of Ambuy Gem Corp., was arrested Tuesday afternoon in the Diamond District and charged with planning a $30,000 money transfer for the purchase of shoulder-launched missiles.

According to a criminal complaint filed in federal court in New Jersey, Abraham received the money, a down payment for missiles that were to be used to shoot down a commercial airliner, from Hemant Lakhani, 68, a British arms dealer who is being held without bail. The payment was made through an FBI informant last October, and Abraham apparently laundered the money to overseas accounts held by Lakhani.

While Abraham was scheduled to be arraigned yesterday in Manhattan on charges of operating an unlicensed money transmitting business, his son, Gideon, was protesting his innocence outside his father's Fifth Avenue office. "It's ridiculous," Gideon Abraham told the New York Post.

In official circles, however, the elderly Jewish jewelry dealer was already branded a terrorist. "The terrorists who have threatened America lost an ally in their attempts to kill our citizens," said U.S. Attorney Christopher J. Christie after Lakhani was charged and denied bail.

If convicted, Abraham faces up to five years in prison and a $250,000 fine.