Eight plead guilty in Armenian Power racketeering case

Eight of 70 defendants charged in a wide-reaching investigation that targeted the small but ruthless Armenian Power gang pleaded guilty this week in federal court, authorities said Wednesday.

Four of the eight were allegedly “members or associates” of the organized crime syndicate, which investigators say took root in east Hollywood in the 1980s. The other four took part in Armenian Power-driven crimes, but were not actual gang members, according to a U.S. attorney’s office news release.

A more than 200-page indictment unsealed in February 2011 accused defendants of crimes related to a spate of complex fraud schemes — one of which allegedly skimmed more than $2 million from 99 Cent Only Store customers — involving counterfeit checks, identity theft and drug trafficking.

“The striking thing about [Armenian Power] is that they use fraud in a way that most street gangs don’t,” said Assistant U.S. Atty. Stephen Wolfe, who has worked on the case. “And they’re also capable of extortion and kidnapping, which they were charged with.”

Although many Los Angeles street gangs derive most of their income from drug trafficking, he said, Armenian Power made its money primarily through fraud.

Wolfe described the 99 Cent Only Store scheme as “particularly sophisticated and scary in some sense,” because it involved secretly installing machines that took customers’ debit card information as they made purchases.

However, Wolfe said, Armenian Power members flexed their muscle in at least one foray into the marijuana business.

Instead of buying from a supplier and “selling to others at a wholesale level,” members of Armenian Power decided they would “just steal the load.”

When the would-be wholesaler disapproved, Wolfe said, the gang members “basically said, ‘You know who we are. Do something about it if you think you can.’”

Two of the defendants who pleaded this week — Karo “Guilty” Yerkanyan, 32, of Tujunga and Adam Davoodian, 32, of Glendale — were involved in that incident, according to the news release.

All told, authorities estimated the schemes cost Southern California victims more than $20 million, according to a news report at the time.

The allegations listed in the indictment also included a litany of other violent crimes, including gun-related offenses. The defendants face potential sentences ranging from a few years to life in prison.

Of the 70 defendants, 59 have now pleaded guilty, Thom Mrozek, a spokesman for the U.S attorney’s office in Los Angeles, wrote in an email. That leaves 11 defendants still pending, he wrote.

Among the dozens charged, less than half were formally accused of racketeering or being in the gang. The rest, Wolfe said, were allegedly “hired labor” — people tapped to do legwork, like withdraw money from ATMs using stolen information, in schemes orchestrated by gang higher-ups.

Armenian Power was also hit in another 2011 indictment filed in Orange County, the news release said, which accused it of working with African American gang members to defraud mostly older victims of an estimated $10 million.

All 22 defendants charged in that case have been convicted, the release said.

U.S. District Judge Dean D. Pregerson is set to sentence the eight defendants who appeared in court before him this week starting Nov. 25.

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jill.cowan@latimes.com

Twitter: @jillcowan