Solid Gold Shock : Drug Money-Laundering Arrests Stun Downtown Jewelry District

On Tuesday night, Jack Killedjian found himself fascinated by a television documentary on money laundering.

The jeweler showed up for work the next morning and got a much closer look as federal agents nabbed the wholesale gold dealer next door to him in an alleged $1-billion laundering scheme that authorities said aided in the importation of about 40,000 pounds of Colombian cocaine since 1986.

“I was absolutely shocked,” Killedjian said. “I couldn’t believe it.”

That seemed the overwhelming reaction Thursday in the city’s sprawling Jewelry District, a melting pot of merchants and craftsmen from throughout the world.

The arrest of more than 30 suspects, many of them jewelers, in an alleged international scheme to launder money from cocaine sales came as a surprise to businessmen in all corners of the vast district. Prosecutors called the case the largest of its kind in U.S. history.

Despite the arrests, a federal prosecutor claimed that many other jewelers continue to launder illicit money.

Resources Limited

Assistant U.S. Atty. Russell Hayman said in court that authorities would have liked to prolong their investigation of the jewelry business but did not have the “resources” to continue before making the arrests Wednesday. He did not elaborate.

The two reputed kingpins of the ring--Wanis (Joseph) Koyomejian, 47, of Ropex Corp. on South Hill Street, and Nazareth Andonian, 33, of Nazareth Jewelers on West 5th Street--were described by acquaintances as pleasant, apparently honorable businessmen.

Established in the same locations for several years, neither stood out from the nearly 2,000 other entrepreneurs who occupy high-rise buildings and storefronts along Hill, 5th, 6th and 7th streets.

And neither gave any hint that he might be involved with merchandise far more valuable than gold or diamonds, colleagues said.

“He was just like the 9-to-5 typical person,” said Jerry Killedjian, who with his father operates a diamond jewelry retail store next door to Koyomejian’s wholesale gold office, high in the new downtown Jewelry Mart building. “There was nothing suspicious at all.”

Koyomejian kept his blinds closed--and they were closed again Thursday--but that is not unusual for wholesalers who do not deal with the public, Jerry Killedjian added. He described the suspect as a clean-cut man who likes to dress in nice suits and who usually left by 5 each day.

Andonian, who had spent nearly 10 years in the same location, had greatly expanded his floor space a few years ago and seemed to be building his business through hard work, neighboring businessmen said. The diminutive jeweler was arrested along with his brother, Vahe, 36, and their father, Vasken, 56, who helped to run the shop.

The three men appeared to manage a thriving family enterprise; a father-in-law who, like Vasken, speaks no English, usually was around, neighboring business people said.

“Nice, sweet people, nice families,” said Saul Shalevetz, 81, who has seen jewelers come and go in the building for 54 years. “I’d never dream it in a million years.”

Earl Oberman, a jewelry wholesaler down the hall, said of Nazareth Andonian: “I’ve known the man for years. I would never have suspected anything from this man. It’s impossible to imagine. Their business grew, but they worked like horses; they were there day and night.”

The American Dream

That, too, is said to be common practice in the district, where traders, ring makers, diamond-cutters and other craftsmen put in long hours in pursuit of the American dream. The thriving district is dominated by immigrants from Armenia, India, Japan, Hong Kong and other nations where the jewelry trade is passed down through generations.

Ground-floor windows and trading booths gleam with gold chains and earrings that sell for as little as $8 or $10.

Meanwhile, in the halls of heavily monitored high-rise offices, couriers carry parcels of high-priced diamonds. Armored trucks roll through the district regularly, whisking cash and jewels to and from banks and international destinations.

Federal investigators used court-authorized wiretaps, electronic bugs and hidden video cameras to track suspects of the alleged laundering ring. A source connected with Loomis Armored Inc., a transport service, told The Times on Thursday that Ropex Corp. was transferring huge dollar values of gold--”millions per day, basically”--between its offices in Los Angeles and New York.

The back-and-forth shipments began a year or 18 months ago, the source said, speaking on the condition that he not be identified. The size of the shipments was unusual for anything but a bank, causing one Loomis employee to tip the FBI in New York, he said.

Bank Officials Suspicious

Documents showed that Wells Fargo Bank officials in Los Angeles became suspicious and also tipped federal investigators, claiming that the Andonian brothers had deposited $25 million in cash in three months.

Authorities seized more than 640 pounds of cocaine in Orange County in December as part of their investigation. Those arrested have, however, been charged with aiding in the distribution of only 11 pounds of cocaine.

Federal authorities were unusually tight-lipped Thursday about the investigation, which they touted as the largest drug money-laundering scheme ever uncovered.

In an effort to keep defendants from being freed on bail, prosecutors went into court and played secretly recorded videotapes of several defendants counting stack after stack of cash.

Of the nearly one dozen suspects who appeared before U.S. Magistrates Ralph J. Geffen and John Kronenberg, three were granted bail. Kronenberg ordered that Joyce Momdjian and Zepur Moroyan, sisters who were employed by Andonian Brothers Inc., be released on $50,000 bail each. Geffen set bail of $1.25 million for Rita Sorfazian, an employee of Ropex Corp.

Authorities believe that Ropex and the Andonian brothers were collection points for millions of dollars that was wired to South and Central America and eventually channeled to top-level drug traffickers.

Astounding Magnitude

Longtime merchants, meanwhile, said they were astounded by the magnitude of the alleged ring.

Diamond-dealer Jacques Mouw, whose Interdiam Corp. runs offices in Los Angeles, New York and Antwerp, Belgium, is used to dealing in lofty dollar volumes; he routinely runs across diamonds that sell for $100,000 to $1 million. But he called the allegation of $1 billion in laundered funds “staggering.”

“I don’t think anybody downtown does $1 billion in diamonds” in a year, Mouw said. DeBeers, the cartel that handles all worldwide sales of rough diamonds, handled $4 billion in 1988, he said, adding: “Once those are cut and polished, that probably converts to about $6 billion. And you’re talking about the entire world.”