A federal grand jury today indicted 33 wholesale jewelers and associates in Los Angeles’ downtown jewelry district on charges of running a $1-billion cocaine money laundering ring, the largest ever smashed by the government.
U.S. Atty. Robert Bonner, who announced the indictments, said the government had also filed civil complaints aimed at seizing $80 million in property owned by the defendants--including a $17-million, 10-story building in the heart of the downtown jewelry district. Such forfeiture complaints are routinely approved by federal judges.
“This investigation will certainly pay for itself,” Bonner said.
Bonner was joined in a news conference by eight other federal and local law enforcement officials whose organizations collaborated in what was code-named Operation Polar Cap, the probe of a money laundering operation which reportedly was centered in the Los Angeles Jewelry Mart.
Today’s indictments grew out of a Feb. 22 raid. Hundreds of personnel from various agencies arrested more than 30 people, most of them jewelers or employees, during the raid, and seized more than 640 pounds of cocaine.
Tied to International Scheme
Federal authorities said the raids broke up an international scheme in which money from cocaine sales was laundered for Latin American drug traffickers.
For the last three years, authorities believe, jewelers in the ring quietly collected carton after carton of drug money packed like bricks and shipped by armored car from a web of contacts in Los Angeles, New York and Houston. In the back rooms of the Los Angeles jewelry district, the flow of drug money was so overwhelming that the cash had to be counted on sophisticated high-speed machines, officials said.
John Zienter, head of the Drug Enforcement Administration office in Los Angeles, said today that the impact of the arrests has been so great that his office had learned of threats of retaliation from kingpins of drug cartels against American law enforcement agents.
“We are getting feedback now which indicates we will get some major retaliation against law enforcement,” Zienter said. “This certainly indicates we’re doing something right or they wouldn’t be willing to go to that extent.”
The two indictments issued by the grand jury focused on operations allegedly run by Nazareth and Vahe Andonian and Wanis (Joseph) Koyomejian, who operated jewelry and gold bullion companies in the Los Angeles Jewelry Mart area.
Among the property the government wants to seize is a 10-story building worth $17 million at 411 W. Hill St. The government alleges the building was bought with drug proceeds.
Agents also have asked a federal court for permission to seize five houses, a condominium and an apartment complex, as well as $12 million worth of gold bars and $30.5 million in inventory from the raided jewelry stores.
In addition to defendants of Armenian, Turkish and Syrian descent, the indictments also named several Latin Americans, one of whom was said to oversee the entire money laundering operation from a post in Uruguay.
That defendant, Raul Vivas, is in custody in Uruguay, Bonner said.