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That is the extent of the official record, but industry sources say Antonyan was active on a much broader scale. He told associates he ran at least a dozen recycling centers and, through various fronts, may have controlled as many as 30. “He would show up at recycling centers and push people to sell the place,” said one recycler who knew Antonyan. “He told us how we were out of step with the market. He’d show up with tens of thousands of dollars in a briefcase. ‘Look what I’ve got here.‘ He got a number of takers.”
That’s not overly surprising. Most recycling centers are low-overhead, low-profit businesses -- grimy, grungy places that generate revenues in the neighborhood of $25,000 a year. But where most prospective buyers would expect slim returns on their investments, sources said Antonyan and his clique learned to wring profits out of his recycling centers in two ways.
The first was to immediately begin running out-of-state containers through the centers he owned. Records required by the state to track the sources of the containers were either falsified or ignored. When inspectors caught up with the scheme, they would move to revoke the center‘s certification, but bogus operators like Antonyan just moved on, either selling the center in question or simply switching ownership on paper. Observed one operator, “Decertifying is a minor inconvenience for recycling centers.”
Key to moving bogus cans was to locate a processor -- a licensed staging yard that receives scrap from the collection centers, bales it in bulk and delivers it to smelters or refabricators -- that would turn a blind eye. According to two sources in the industry, Antonyan and his cohorts found such a processor at Active Recycling, one of the oldest and largest of the 50 processors operating in L.A. County. “Active is the primary place where bad material is going through,” said one. Last year, several weeks after this interview took place, state officials charged Active Recycling with fraud and demanded payment of $1.6 million in restitution and penalties.
The second way Antonyan profited from recycling was through sales of the centers themselves. His former associate described the racket: “He would buy a place, then run a bunch of bad material through it to show the prospective buyer that the business was doing well. He would show the buyer his records, then sell it at an inflated price.” In one case the source detailed, Antonyan bought a center for less than $20,000 and sold it for $75,000. As the source described it, “He was probably doing it primarily to sell the place. Defrauding the state was just icing on the cake.”
The profits from the recycling were never spectacular -- they paled compared to, say, smuggling cocaine -- but for Antonyan and his friends, it was a bonanza. “It’s not per se a Mafia thing, but they travel in packs,” said one U.S.-born associate who got to know the crew. “All these guys from Eastern Europe who watched ‘50s gangster TV shows and styled themselves after them. Maybe a Three Stooges version of the Mafia.” During breaks from operating their rackets, Antonyan and his friends would settle in at one of the Armenian delis scattered around Glendale and feast on platters of roasted meat washed down with bottles of wine and vodka.
But they couldn’t settle in for long. Antonyan in particular left a trail of disgruntled business associates. One was Vahe Ibranyan, a lanky fellow Armenian who bought two recycling centers from Antonyan, whose poor reputation with state authorities created immediate problems, and both centers quickly had their licenses revoked. “When I bought the businesses, the state came in and closed them. They thought he had changed the business name but that he was still the owner.”
Ibranyan entered another venture with Antonyan in 1997, according to a claim Antonyan made in a civil lawsuit. That was V&S Auto Dismantling, in Sun Valley. Antonyan owned a second Sun Valley wrecking yard, according to state records, but according to Ibranyan, Antonyan‘s claim to the V&S operation was just another scam.
“I owned the auto-dismantling business,” Ibranyan said in a telephone interview. “I owned the business from the first day to the last.” Ibranyan said Antonyan’s legal claim was bogus, just another scheme to steal money. “He opened a lawsuit and said he was a partner with me. It had nothing to do with him. It never happened.
”He did the same thing with other people.“ Ibranyan said. ”Maybe that‘s why he died.“
The arrival of Sarkis Antonyan, Vahe Ibranyan and a clique of other Armenians in the recycling business set off widespread grumbling inside the industry, and soon caught the attention of state and federal authorities.
”The [state] Department of Conservation came to us with the request we look into fraud against their agency,“ said George Fawrup, supervising agent with the state Department of Justice. Fawrup said an initial investigation found the recycling fraud followed ”similar patterns“ to the Mikaelian gas-tax racket, but he was reluctant to call it organized crime. ”There are cells,“ Fawrup said. ”It might not be one whole group. There may be a spirit of cooperation among [several] groups.“