Newport Beach : ‘Gray-Market’ Auto Dealer Pleads Guilty

A Newport Beach entrepreneur, who has been called the nation’s largest importer of so-called “gray market” automobiles, has pleaded guilty to charges that he submitted phony smog-test results to the Environmental Protection Agency, federal prosecutors in Los Angeles said Friday.

Albert Mardikian, 39, abruptly decided Thursday to plead guilty to one count of mail fraud and nine counts of submitting false documents to the EPA, according to Michael Fayad, a Justice Department attorney.

The decision came as the prosecution was in the midst of presenting its case against Mardikian, operator of Trend Import Sales of Newport Beach, and his nephew, Garo Mardikian, 28, of Torrance, who also pleaded guilty.

The two men were named in a 35-count federal indictment returned last May 23 in a scheme involving so-called gray market autos--European versions of luxury vehicles, such as BMWs, Ferraris, Mercedes and others, imported independently of authorized dealerships.

Albert Mardikian was accused of submitting EPA-required results for smog-emission tests that were never performed.

Since the gray-market versions were never intended for use or sale in the United States, they must pass EPA smog standards before they can legally be sold and driven in this country, federal prosecutors said.

EPA officials at the trial said importers of gray-market autos can offer the vehicles at substantially lower prices. For example, a gray-market version of a $40,000 Porsche sold by an authorized dealer in the United States could be priced at around $28,000 by an independent importer.

Under the agreement worked out for the guilty pleas, federal prosecutors said that 25 other counts against Albert Mardikian would be dropped.

Garo Mardikian, who worked as an engineer in his uncle’s smog-testing laboratory, agreed to plead guilty to three counts of mail fraud, prosecutors said. Seven counts alleging mail fraud were dropped, they added.