Jewelry District Whodunit Goes to Jury

The way Harry Yildiz tells it, he was alone in his downtown jewelry shop when a man in a raincoat with a gun hidden beneath his umbrella burst in, tied him up and made off with $1.1 million in diamonds and jewels.

But underwriters at Lloyd’s of London say it went down differently. They say that Yildiz, a 67-year-old with heart trouble, staged the robbery on the sixth floor of the Hill Street Jewelry Mart -- and they even suggested that he may have dispatched his son to Aruba to sell off the jewels on the cheap.

Now, in a lawsuit over whether Lloyd’s should be required to reimburse Yildiz for the alleged losses from the Dec. 29, 2004, robbery, a Los Angeles jury must delve into the world of Los Angeles’ jewelry trade, where, according to testimony, millions of dollars worth of diamonds trade back and forth on the strength of a handshake, formal records are not always kept, and many elderly shopkeepers have loaded guns at the ready.

Key pieces of evidence include a grainy surveillance videotape showing a man with a black bag appearing to duck down a corridor -- although the size of the bag remains hotly contested. As lawyers brandished a plastic model of a gun, the jury also heard testimony from a detective who said that he faxed police documents to Lloyd’s investigators that were not part of the report police eventually turned over to the court.

The jewels have not been recovered, and no one was arrested in connection with the robbery.

Yildiz’s lawyer, Marc Brumer, who flew in from Miami for the trial, told jurors that the case is a “classic David vs. Goliath.”

His client, he said, is a 67-year-old immigrant from Turkey who was “robbed twice” -- once by a man with a gun and a second time by his insurance company, which instead of processing the claim tried to pin the crime on their frightened client.

To add insult to injury, Brumer said, the Los Angeles Police Department failed to assign the case to its elite Robbery-Homicide Division, sending instead a detective with little formal experience in investigating jewel thefts.

That detective, Michael Woodings, allowed himself to be swayed by the insurance adjuster, Neil Leiberman, the lawyer said. He went on a wild goose chase to Aruba at taxpayer expense and faxed part of his report from his home directly to Leiberman. In his closing arguments, Brumer suggested that the detective had colluded with the insurance company.

“I’m calling them the liar’s club,” Brumer said. Because of the dispute, Brumer said, Yildiz “can’t even walk down the street” because his reputation has been hurt.

“Give him back his life. Give him back his integrity. Pay his claim,” he said. As he was speaking, Brumer walked over to his white-haired client, put his arm around him and asked the jury: “Is this a man who would commit a robbery?”

Attorneys for Lloyd’s say the answer is yes.

“It was a staged robbery,” said Andre Cronthall, an attorney with the firm Sheppard Mullin who has handled a number of diamond-related suits.

Occasionally flashing a yellow rubber model of a handgun and slipping his hands dramatically in and out of a pair of plastic handcuffs that were replicas of those that bound Yildiz’s wrists during the alleged robbery (there was conflicting testimony about whether his feet were also bound), Cronthall argued that the bag shown in the surveillance tape was too small to accommodate all the jewelry Yildiz said was stolen. The diamond seller’s version of events, he added, is simply “not logical.”

Why would a robber have worn sunglasses and a hat and carried an umbrella? Why did the robber stay in the shop for 15 minutes -- an “eternity” as far as high-end robberies go? How was the robber able to grab 515 pieces of jewelry but leave undisturbed important papers such as Yildiz’s passport? Why was Yildiz able to get across the room and bang on the door, but unable to hit the panic button or dial 911 with his nose?, Cronthall asked.

Yildiz’s attorney said all those questions had reasonable answers. “How is he going to dial 911 with his nose?” he asked.

Also suspicious, Cronthall said, was the fact that Yildiz’s son Scott went to Moreno Valley that afternoon -- what kind of Southern Californian would drive 55 miles in the rain on an unimportant errand?

And then there is the questionable nature of Yildiz’s own finances. Records show that his business was not doing well, and there were discrepancies between his sales records and his shipping records, as well as inconsistencies in the claims he submitted to Lloyd’s.

“There were so many red flags,” Cronthall said. So many that the police detective eventually determined that far from being a victim of robbery, Yildiz could have been prosecuted for trying to defraud his insurer. Part of the detective’s reasoning, although unbeknownst to the jury, was that Scott Yildiz failed a lie detector test. Lie detector tests are generally not admitted in California courts.

The district attorney declined to prosecute Yildiz.

And now, as Yildiz’s lawyer told the jury, it is up to them to determine: “Who is telling you the truth here?”

jessica.garrison@latimes.com