A view of Sydney's Queen Victoria building lockdown in Australia in an undated photo. (Reuters)

A high-profile jeweler in Sydney, known for designing jewels for the late Princess Diana, Elizabeth Taylor, and the royal family of Saudi Arabia, was charged and arrested on Monday for allegedly planning an armed heist of his own store.

65-year-old Michel Elias Germani, the owner of Germani Jewellery, initially told officers that he and his staff member were threatened by two men disguised as customers in Sydney’s Queen Victoria Building back in January.

One of the robbers allegedly threatened the employee with a knife, as the other demanded access to the safe, and according to police, the men ran out with a large amount of jewelry after Germani and the employee were restrained at the hands and feet with cable ties.

Shanel Tofaeono, 37, and Mounir Helou, 57, were arrested last month as a result of an investigation but just this Monday, Detective Superintendent Joe Doueihi told reporters that police believe something “just didn’t seem right” and Germani himself was detained after alleging that it was all a scam.

Germani was at the Downing Center local court when police claimed that he was involved in “planning and coordinating the robbery and attempted to defraud an insurance company”.

His charges included aggravated robbery and depriving a person of their liberty, attempting to dishonestly obtain a financial advantage by deception, publishing false or misleading material to obtain property, and participating in a criminal group and contributing to criminal activity.

Doueihi said the injured staff member was “absolutely traumatized” since she was not aware that this was staged.

"She was threatened with violence and a knife [and] bound with cable ties on her feet and her hands … she was under the belief that it was a genuine robbery," he said.

Germani did not apply for bail and was given the order to reappear in court for bail review this Thursday.

Germani's brand rose to fame in 1988 after sponsoring the Australian TV game show Sale of the Century.