100 Armenian Gang Members Charged in L.A.

Nearly 100 charged, dozens arrested in operation targeting Armenian organized crime [Updated]

February 16, 2011 | 9:11 am

Dozens of people were arrested Wednesday morning in a massive operation by federal and local law enforcement authorities targeting Armenian organized crime, particularly members of the powerful street gang Armenian Power.

Operation Power Outage involved nearly 1,000 officers and concentrated primarily on suspects who reside in heavily Armenian neighborhoods in Glendale and East Hollywood, but authorities said arrests and indictments also were made in other parts of the country.

Citing the ongoing operation, officials did not immediately release specifics but said nearly 100 individuals had been charged in federal and state court in indictments alleging racketeering, extortion, kidnapping, drug-related offenses and white-collar fraud.

Participating law enforcement agencies included the FBI, the Internal Revenue Service, U.S. Secret Service, Immigration Customs Enforcement, the Los Angeles County Sheriff's Department and the Burbank, Glendale and Los Angeles police departments. [Updated at 10:14 a.m.: The U.S. Dept. of Health and Human Services' Office of Inspector General also participated.]

The bulk of the arrests and search warrants had been served without any major incidents. But officials stressed they continued to search for some of the suspects.

Armenian Power -- AP for short -- is a small but virulent gang that took root among Armenian immigrants who arrived in Los Angeles in the late 1980s and early 1990s, authorities said. They are concentrated in Glendale and East Hollywood.

Law enforcement officials described Armenian Power as having an "extensive portfolio" that combined ruthlessness with opportunism, focusing on white-collar crime that included identity theft crimes such as credit-card skimming.
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Armenian Power -- AP for short -- is a small but virulent gang that took root among Armenian immigrants who arrived in Los Angeles in the late 1980s and early 1990s, authorities said. They are concentrated in Glendale and East Hollywood.

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That would have been one of the social benefits of the 1986 Amnesty.

FEBRUARY 16, 2011, 2:43 P.M. ET.

U.S. Indicts Alleged Armenian Gang Members

By JOHN R. EMSHWILLER

LOS ANGELES—Federal grand juries indicted dozens of alleged members and associates of a major Armenian criminal group on charges ranging from kidnapping and extortion to bank fraud and credit-card scams.

Justice Department officials say the cases illustrate the increasing sophistication and reach of organized criminal groups involving people with links to the former Soviet Union and Eastern Bloc.

Two federal indictments in Southern California charge 88 individuals, who are allegedly linked to a criminal group called Armenian Power, with racketeering and other crimes, federal officials said. Another 11 individuals were charged in related cases brought by the Los Angeles County district attorney in state court. Similar federal criminal actions were also filed Wednesday in Miami and Denver against more than a dozen individuals, some with links to Armenian Power, U.S. officials said.

Hundreds of people were victimized in fraud schemes, federal officials say. Among the alleged scams: some of the defendants installed sophisticated credit-card and debit-card "skimming" devices at Southern California outlets of a discount retail chain, 99 Cents Only Stores, and then retrieved the information from those devices to illegally create counterfeit cards. Some $2 million was allegedly stolen through this scheme.

In another alleged scheme, Armenian Power members, working with African-American street gangs, bribed insiders at banks to get customer information, particularly for those people with large balances in their accounts. Defendants then allegedly assumed the victims' identities, ordered new checks in the victims' names and proceeded to use the checks to steal from the accounts. Federal officials say the fraud targeted elderly victims and losses were at least $10 million.

Armenian Power, which began as a relatively small, local Southern California street gang in the 1980s, has "evolved into a sophisticated organized-crime group with ties to criminal elements in Armenia and Russia," as well as U.S. gangs, such as the Mexican Mafia, said U.S. Attorney Andre Birotte Jr. in an interview Wednesday. Mr. Birotte, whose office is handling the Los Angeles cases, added that he hoped the indictments would prove to be a major step in "dismantling" this "very opportunistic" criminal organization.

The ability of Armenian Power members to infiltrate retail outlets and banks is a sign of their growing reach, Mr. Birotte said. He praised officials form 99 Cents Only for initially uncovering the alleged fraud at their stores and then being "extremely cooperative" in the federal investigation. He added that the stores have installed new protections against further such scams.

99 Cent Store officials couldn't immediately be reached for comment.

Wednesday's indictments are part of a nationwide Justice Department effort to attack organized crime, said Assistant Attorney General Lanny Breuer in an interview. "There is no question that organized crime remains a threat in the U.S.," said Mr. Breuer.

While the Justice Department continues to pursue traditional organized-crime groups, as evidenced by a recent major case brought against alleged members of La Cosa Nostra, it also now is focusing on crime groups from the former Soviet Union, he said. "These groups working together or in collaboration are involved in a huge array of crimes," Mr. Breuer said.

Write to John R. Emshwiller at john.emshwiller@wsj.com

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Raids targeting Armenian gang net 74 fraud suspects

Scams by Armenian Power took $20 million from discount store shoppers and the elderly, authorities say.

By Andrew Blankstein and Kate Linthicum, Los Angeles Times
February 17, 2011

U.S. prosecutors accused an Armenian organized crime gang of bilking victims out of an estimated $20 million in an audacious series of financial scams that included replacing the credit-card machines at more than a dozen 99 Cent-Only stores with their own scanners designed to steal customers' banking information.

The charges filed Wednesday against alleged members and associates of the Armenian Power gang included allegations of two kidnappings, theft of money from elderly bank customers, the smuggling of cellphones into state prisons, and trafficking in drugs and weapons. Seventy-four suspects were arrested in early-morning raids at about 90 locations throughout Southern California in an operation that involved nearly 1,000 local, state and federal law enforcement officials. Additional arrests were made in Miami and Denver.

The charges, detailed in two lengthy indictments, are the most sweeping in what has been a campaign by law enforcement agencies to crack down on white-collar crime involving Armenian and Eurasian gangs in Glendale, Hollywood and other areas. In October, authorities arrested 52 members of an alleged Armenian crime group, charging them in a $160-million nationwide Medicare fraud.

A 134-count indictment in the current case was returned under seal three weeks ago by a federal grand jury in Los Angeles, charging 70 defendants. A second 102-count indictment by a federal grand jury in Orange County charged 20 defendants.

Authorities said the credit-card swapping scam was detected last year when the manager of a 99 Cent Only store in Huntington Beach noticed that a cash register was not processing credit and debit cards properly. The manager informed police, who caught two suspects as they were removing one of the credit card skimmers from a store, federal officials told The Times.

Officials later determined that the gang had a system for leaving the number-skimming machines in place for about a week, gathering banking information, then replacing the store's own machines.

The information was used to create phony credit and debit cards. Gang members and associates allegedly sold the credit card information to other criminals and used the forged debit cards to drain the bank accounts of victims.

After being contacted by store officials, Huntington Beach police informed federal authorities, who determined the scam was taking place across the region — one of several types of banking fraud allegedly perpetrated by the gang.

Prosecutors also accused Armenian Power of teaming up with several African American gangs to target elderly bank customers in Orange County. The gang "unlawfully obtained customer information for high-value bank accounts, impersonated the bank customers to acquire checks, and then cashed and deposited checks in an effort to deplete the accounts," netting $10 million, according to the Orange County indictment.

Gang members allegedly impersonated customers and ordered new checks from banks, which they stole out of the victims' mailboxes. Two suspects allegedly smuggled cellphones into an unidentified state prison to help with coordinating bank fraud schemes.

The indictment alleged strong ties between Armenian Power and the Mexican Mafia, which federal authorities allege controls the narcotics trade and other crimes in state and federal prisons. According to the court filing, the Mexican Mafia provides "protection and status" to imprisoned Armenian Power members and their associates. In return, Armenian Power "assists Mexican Mafia members … with collecting money or 'taxes' within prison and outside of prison."

Authorities allege the two gangs also exchange "high-value gifts, including vehicles and weapons." The indictment also alleges that Armenian Power leaders had strong ties to organized crime in Armenia, Georgia and Russia.

Officials said Armenian Power allegedly kidnapped a Glendale auto body shop owner and held him for a $500,000 ransom. The indictment details a phone conversation in which suspects said they showed the man a hole in the ground, prompting him to start crying. The two then speculated that the man "might die of a heart attack" because he was so scared.

Authorities said at a news conference that Armenian Power was able to connect with other gangs because of its technological sophistication in white-collar crime. The gang had a cadre of younger members who were highly computer savvy, officials said.

The Armenian Power organization began as a street gang based in Glendale and Burbank two decades ago to protect new Armenian immigrants, according to officials. Since then, it has morphed into a formidable financial crime syndicate with about 200 members, according to the FBI.

At the 99 Cent Only store in Silver Lake on Wednesday, customers were stunned to learn about the scam and questioned how the suspects could have accessed the store's machines.

"They should make sure that nobody can get access to the machine," said shopper Billy Prasom, adding that he hoped the store had beefed up customer protections.

Officials with 99 Cent Only stores said that they have installed new security measures to protect against potential future scams.

In addition to the federal indictments, the Los Angeles County district attorney has charged 11 defendants in seven cases filed in L.A. County Superior Court.

andrew.blankstein@latimes.com

kate.linthicum@latimes.com

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