Money-Laundering Case Nearly Ready for Jurors : Trial: Two Jewelry Mart firms stand accused of processing hundreds of millions of dollars in drug sales cash.

In February, 1989, scores of law enforcement agents raided Los Angeles’ downtown jewelry district, climaxing a 13-month investigation code-named “Operation Polar Cap” aimed at blocking the financial pipeline of South America’s cocaine lords.

In the days after the raid, government authorities accused two jewelry firms of being at the center of a drug-trafficking network that laundered hundreds of millions of dollars in cocaine cash generated on the streets of Los Angeles, New York, Miami and Houston.

Law enforcement officials said the money flow was so overwhelming in the two companies--Andonian Bros. Manufacturing Co. and Ropex Corp.--that high-speed counting machines could barely keep pace, leaving jewelry employees dwarfed by mountains of bills.

Now, after almost six months of testimony by nearly 100 witnesses, one of two trials spawned by “Polar Cap” is about to be turned over to a federal court jury. In all, nine defendants stand accused of conspiring to launder about $350 million in drug money shipped to South America. If convicted, they could receive life in prison.

The prosecution completed its closing arguments last week, and defense attorneys are expected to conclude their arguments by Friday in the courtroom of U.S. District Judge William D. Keller.

“What this case is all about,” Assistant U.S. Atty. Jean Kawahara said in her closing remarks, “is hundreds of millions of dollars in cash--ones, fives, tens, twenties and fifties--that were shipped to the Andonian Bros. day after day after day after day.”

“These aren’t the types of bills used to buy jewelry at Tiffany’s,” Kawahara told jurors. “These are bills used to buy street quantities of cocaine.”

Kawahara showed the jury shipping boxes wrapped in silver duct tape. She said the boxes once held thousands of pounds of cash delivered by couriers with code names to the Jewelry Mart near Pershing Square. The couriers’ code names, she said, denoted the origin of the cash and its destination.

During the trial, Kawahara and her co-prosecutor, Assistant U.S. Atty. Russell Hayman, alleged that the profits were funneled through the Andonian firm (the Ropex company is the subject of a second trial). The money was then deposited in Los Angeles banks and quickly wired to other domestic and foreign accounts, where Colombian drug kingpins used it to finance their activities, the prosecutors said.

So efficient was the machinery that the alleged ringleader, Raul Vivas, bragged that he could move money “back to South America within 48 hours” from the time peddlers collected the cash on city streets, according to the prosecution.

The bespectacled Vivas, 38, of Buenos Aires, showed no emotion as prosecutor Kawahara accused him of being “the head of the conspiracy.” She said that in May, 1986, he established a currency exchange in Montevideo, Uruguay, that he called Cambio Italia, which effectively became a command post for the operation.

“It was the perfect front for money moving to South America under the guise of precious metals and gold sales,” Kawahara charged.

Extradited from Uruguay to stand trial, Vivas has been denied bail--as have five other defendants, including Nazareth Andonian and his brother, Vahe.

Vivas’ attorney, Martin L. Schmukler of New York, has denied that his client was engaged in any illegal activity. He described him as “an honest-to-goodness gold dealer” from Argentina.

“If the evidence is properly interpreted, he’s innocent and should go home,” the attorney said.

Defense lawyers for the Andonian brothers, who own the jewelery firm allegedly used by Vivas as a conduit for drug money, argued that their clients are hard-working immigrants from Beirut who ran a legitimate jewelry business here for more than a decade.

“They were never asked to launder money,” defense attorney Jerry L. Newton, who represents Vahe Andonian, told jurors in his closing argument. “The Andonian brothers have dealt with cash for a long period of time, and cash is the primary exchange used in the Jewelry Mart.”

In 1987 alone, Newton said, the Andonians handled more than $100 million in legitimate cash sales.

Commenting on thousands of hours of surveillance and the scores of witnesses, Newton observed that there was never a mention of drug transactions. “No one,” he said, “ever saw a drug transaction.”