Indeed. Nobles can trade unique items.
Arresting the advy after the transaction is a possibility. You could just as well arrest him first and just take the unique away from him too.
I've had my advy succesfully hide the item from the Judge, though. The message says something about "hid it someplace you're rather not think about", I think. Funny if it's a ring, rather painful if you're hiding a sword.
