Gem Dealers Feud in Court Over Alleged Ruby Theft : Trial: The four men accused say the dispute is a misunderstanding. Complex case offers insight into how business is done at the jewelry mart.

A trial pitting Los Angeles jewelry dealers against each other began Monday, with one side claiming a rare Burmese ruby was stolen and the other arguing the whole thing is a misunderstanding that should not have landed in criminal court.

According to prosecutors, when four men accused in the theft of the 6.76-carat gemstone conspired to receive stolen property, they also violated the system of trust that drives the Downtown jewelry mart.

“There was breakdown of trust caused by these defendants,” said Deputy Dist. Atty. Eduards Abele.

That charge is laughable, the defense attorneys say. They portray their clients as law-abiding businessmen who have succeeded in a work environment where a person’s word alone is enough to seal a deal.

Jurors hearing the trial in Van Nuys Superior Court will be asked to determine if one man stole the ruby, which is worth as much as $1 million, and if three others played a role in keeping the stolen stone out of the hands of the rightful owner.

The four men--Ali Reza Paravar, 42, of Woodland Hills; Antranik Harbouian, 46, of Montebello; Behzad Saba, 33, of Irvine, and Rasekh Uddin Siddiqui, 51, of Chatsworth--face between three and five years in state prison if convicted.

The strange and complicated tale began Sept. 12, 1990, when jewelry salesman Peter Morlock gave the pinky fingertip-sized ruby to Ron Levi on consignment. The written agreement they used to document the deal, the kind of documentation that everyone involved agrees is standard in the jewelry business, gave Levi two days to either return the stone or pay Morlock $527,000.

But when Morlock, representing his father’s Germany-based jewelry firm, attempted to retrieve the ruby, Levi said he had given it to Paravar. When Paravar refused to return the gemstone, Morlock cried foul and complained to the police.

Investigators did nothing at the time, said Paravar’s attorney, Jerry Kaplan, who attributes the lack of action to an debt Levi allegedly still owed Paravar and two business associates. Paravar simply was holding the stone as collateral for the $400,000 debt, Kaplan said.

“That’s how the system works,” Kaplan said outside court Monday.

To prove that is how the Downtown jewelry mart operates, Kaplan said he plans to bring other jewelers into the courtroom to explain the consignment system and to tell the jury that Morlock had himself, on several occasions, kept consignment merchandise.

In interviews, attorneys for three of the defendants said that Levi owed a number of dealers money. Kaplan produced a Los Angeles Police Department report to document Levi’s problems.

According to the Aug. 3, 1993, report by Detective Michael Woodings, investigations by the LAPD and the FBI “revealed that Ron Levi had been involved in numerous such thefts of consigned gems and was prosecuted federally.” Kaplan said Levi had previously been charged but is now at large.

Kaplan also said Monday that soon after the stone disappeared, Morlock did meet with Paravar but that he did not have the money to pay for the ruby. He said police refused to file charges at the time, saying the dispute was a civil rather than a criminal matter.

Harbouian, Saba and Siddiqui are accused of receiving stolen property. During his opening statement to the six men and six women jurors, Deputy Dist. Atty. Abele said that the trio had arranged a meeting between Morlock and Paravar, in which the original owner was to pay $360,000 to get the ruby back.

“The victim actually negotiated to buy back his own ruby,” Abele said.

But Morlock had no intention of paying for his own property, and the July 16, 1993, meeting turned out to be a sting operation in which police helicopters and nearly two dozen law-enforcement officials swooped in to arrest the four men.

Summing up the drama of the scene for jurors, Abele said: “Defendant Paravar is caught red-handed with the same ruby that was stolen three years earlier.”

Morlock’s company currently is trying to sell the ruby, which it co-owns with the insurance firm Lloyd’s of London, which paid out $250,000 for the loss of the stone before its recovery. The stone is now being held in Germany, by Morlock’s father’s company.

Defense attorney Victor Salerno, who represents Harbouian and was the only defense counsel to make an opening statement Monday, described prosecutors’ statements as mere “insinuations.”

Cutting to what is sure to be the central issue of the case, Salerno said the question is not whether the four men were involved with the ruby, but whether a theft occurred.