The scam, police say, involved a fake sheik, a small man hidden inside a desk, and euro10 million ($14 million) in jewelry including a tiara that apparently belonged to Eva Peron of Argentina.
Spanish authorities said Wednesday they have recovered euro6 million ($9 million) in jewels stolen in the bizarre crime in the eastern city of Valencia.
As the "sheik" handed over stacks of euros to a jeweler by placing them in the drawers of desk at a business center, the small man hidden inside switched them with stacks in which only the first and last notes were real, police said.
Both parties went back to the jewelry shop where the gems were stored in order to complete the transaction. But when the jeweler tried to inspect the money again, the bogus sheik and another assistant accompanying him roughed her up, threatened to kill her, and fled with the loot.
The jewelry included a diamond tiara that apparently once belonged to Argentina's legendary late first lady, a police statement said.
Italian authorities last week announced the discovery of euro6 million worth of the jewels in a hotel strong box in Milan, Italy. Wednesday's police statement said the jewels were back with Spanish authorities and gave details of how the 2009 con and robbery was pulled off.
Seven people from the former Yugoslavia have been arrested in the case _ in Switzerland, France and Italy, and extradited to Spain _ after a complex probe involving Interpol.
The police statement said the gang won over the confidence of the Valencia jeweler three years before the theft by having two members who were impeccably dressed and spoke Italian buy nearly euro20,000 in jewels from her.
In 2009 they contacted her again saying a wealthy Arab sheik wanted to buy euro10 million in gems for one of his wives.
At an initial meeting at a Valencia hotel, the fake sheik and a man posing as his secretary reached a deal with the jeweler on what to buy, and to pay in cash at a nearby business center. The con and robbery took place a few days later, the Spanish statement said.
Investigators tracked down the thieves using a photo from a meeting between the con artists and the jeweler, and a fingerprint from a suitcase in which the fake money was carried back to the shop.
The bogus sheik _ identified as a 40-year-old from the former Yugoslavia _ was arrested along with the other members of the gang.