Long Beach Police and FBI Agents Seize Art Gallery in Major Drug Investigation

Long Beach police and FBI agents have seized an art gallery in the heart of Beverly Hills and confiscated its collection of Russian paintings, antiques and jewelry, alleging that the gallery has been involved in a major drug-dealing case.

Authorities say the owner of the St. Petersburg Art Gallery, 9608 Brighton Way, offered his shop’s contents as collateral during a major cocaine buy that he and two other men tried to negotiate earlier this year with undercover narcotics officers.

The owner, Abram (George) Meliksetian, and two others have been charged in federal court with conspiring to buy more than 11 pounds of cocaine with the intent to distribute it, and with possession of the cocaine, valued at $100,000 wholesale.

The FBI said this case grew out of a separate investigation into a massive international drug and money-laundering ring that authorities sought to thwart with a sting operation at the Los Angeles Jewelry Mart two years ago.

At their arraignment Monday, Meliksetian, 59, of Beverly Hills; Manouk (Mike) Mkhsian, 31, of Burbank, and Andranik (Andy) Sogoyan, 29, of Glendale, all entered pleas of not guilty.

The three men have posted bond and have been released pending a March 25 pretrial hearing, Assistant U.S. Atty. Karin J. Immergut said.

Meliksetian declined comment, but his lawyer, Ted Flier, said the case raised “an entrapment issue.”

“The police are the supposed sellers,” Flier said. It’s not like (Meliksetian) was out looking for drugs or to sell drugs.”

Mkhsian’s lawyer, Paul Caruso, also suggested that his client had been entrapped. “He did nothing but talk big,” the attorney said.

Sogoyan denied wrongdoing but would not comment further.

The gallery was seized under a law that allows authorities to claim cars, homes and businesses if they are believed to have been used in drug transactions. Because it was leased to Meliksetian, authorities said they do not intend to keep the building. But they have asked a judge to rule on whether the seizure was justified, in which case its contents will be auctioned off and the proceeds split among investigating agencies.

“In essence, in our opinion, it was part of the drug transaction,” Long Beach Narcotics Detective D. W. Smith said of the gallery’s contents. The gallery also was the site of some drug-deal negotiations, he said.

The investigation began about eight months ago, when FBI agents and police based in Long Beach received information that Mkhsian and Sogoyan were involved in a major money-laundering ring operating out of the Jewelry Mart in downtown Los Angeles, Smith said.

Undercover agents posing as drug dealers and money launderers contacted Mkhsian and Sogoyan, and the two men allegedly asked the agents last June to launder $60 million in drug proceeds from New York by funneling it to a bank in Colombia, authorities allege.

According to the FBI, Mkhsian told undercover operatives that he needed someone to launder as much as $10 million a week in drug money, because his old contacts had either been exposed or shut down, as a result of a massive sting operation at the Jewelry Mart.

Mkhsian boasted during meetings with undercover agents that he and Sogoyan had already made $1 million apiece in the drug and money-laundering business, and that the two were handling “large amounts” of cocaine, according to an affidavit filed by an FBI special agent. Mkhsian also told undercover agents “that he had done extensive business in the Soviet Union in the gold, diamond and heroin market, including smuggling and dealing in the black market money exchange,” according to the agent.

But before the deal could be finalized, more arrests in the Jewelry Mart investigation stopped the flow of money that needed to be laundered, and Mkhsian and Sogoyan began searching for ways to support their $20,000-a-month lifestyles, authorities allege.

Authorities say Mkhsian and Sogoyan drove expensive cars, owned gas stations and jewelry businesses, and bragged about spending $5,000 on a casual night on the town. “They were impressive partyers,” one investigator said in an interview.

In October, the three men--including gallery owner Meliksetian--told undercover operatives that they wanted to buy 110 pounds of cocaine and maybe five times that amount, authorities allege.

During negotiations, the three men showed undercover agents $100,000 in cash at the gallery and offered the shop’s contents as collateral to show good faith, Smith said.

The three men later said they wanted to start by buying just 11 pounds of cocaine as a test, and when Meliksetian allegedly went to pick it up near Long Beach Airport on Feb. 7, he was arrested, Smith said. A week later, Mkhsian and Sogoyan turned themselves in, he said.

Since the raid a little more than a week ago, the gallery has been locked and empty. A small note fastened to its front door says, “Sorry, we will be closed temporarily.”

U.S. marshals are now taking inventory of the gallery’s contents with the help of an independent appraiser. Authorities say the investigation of the alleged drug and money-laundering activity is continuing.

The contents of the art gallery originally were valued at $1 million, Smith said, but the appraiser has determined that many items were selling for a price far beyond their value. Smith estimated that the inventory was worth about $250,000.

One painting with a $60,000 price tag, for instance, was appraised at $800, Smith said. “It has enlightened me,” he said, “that one should be careful when buying art.”