Sewing Firm Investors Cleared of Extortion

A federal judge Wednesday acquitted two Armenian immigrants charged with threatening violence to collect a business debt from a fellow emigre who operated a Glendale sewing factory.

U.S. District Judge Richard A. Paez found Henzel Harutian, 58, and Albert Ambarsunian, 59, not guilty of attempted extortion.

The judge said he agreed with defense claims that the case involved little more than a noisy business squabble.

“This truly was government prosecution out of control,” defense attorney Mark Geragos said after Paez’s verdict in the nonjury trial. Geragos protested before the trial began that Harutian was being hounded by FBI agents and Glendale police because he is Armenian, a charge rejected by the judge.

Harutian, an investor in several sewing businesses, has been a government target since the mid-1990s when he came under investigation in a string of murders, shootings and arson attacks against employees and contractors at Carole Little, the women’s apparel maker.

He was never charged in that case, but authorities contended that he had links to Russian organized-crime interests, a claim he and his lawyers deny.

The trial was the government’s second unsuccessful attempt to convict him of extortion. A jury deadlocked on the charges last year, with most panelists favoring acquittal. The judge dismissed charges against Harutian’s wife, Nelli.

At the time, Paez signaled his displeasure with a retrial. “I want you to sit down with your superiors and really consider if there is a need to go forward,” he told Assistant U.S. Attys. Daniel Saunders and Terri Law.

But the U.S. attorney’s office decided to retry Harutian and Ambarsunian anyway, while dropping all charges against a third defendant, Edouard Terterian, 37.

After their loss Wednesday, Saunders and Law said, “We accept the judge’s verdict.”

Harutian, who lives in Mecca, Calif., has been a silent partner in a number of sewing factories in the Los Angeles area, according to prosecutors.

They said his practice was to “sell” a sewing business to a fellow Armenian immigrant who would run the business and appear as the legal owner. No papers were ever signed, but Harutian would receive the bulk of the profits, usually in cash, the government said.

It was under such an arrangement that Eloyan and his wife, Anahit, bought California Master-Sew Contractors in 1996. Under a verbal agreement, Harutian was to receive 70% of the profits.

In 1997, the prosecution said, Harutian unilaterally changed the terms of their agreement, demanding 10% of the gross instead of 70% of the profits, which increased Eloyan’s payments.

Eventually, however, he suspended payments to Harutian, triggering a series of angry exchanges that led to a confrontation at the sewing factory Feb. 12, 1998.

The prosecution contended that Harutian, Ambarsunian and two other men tried to force their way into Eloyan’s office, threatening punishment unless he resumed the payments. The defense argued that Harutian had simply gone there to resolve the dispute amicably.

In explaining his verdict, Paez said “what really tips it for me” was that Harutian went to the factory at Eloyan’s invitation.

He said the business arrangement between Harutian and Eloyan was doomed to fail because nothing was put in writing so “no one had a clear understanding of their responsibilities.”