U.S. Accuses ‘Gray Market’ Car Importer

A Santa Ana entrepreneur--embroiled in legal battles with federal and state authorities over the smog testing of European-version luxury cars he imported--was indicted Wednesday on 35 counts alleging that he made false statements about tests done on the so-called “gray market” autos.

Named in the indictment, returned in Los Angeles federal court, was Albert Mardikian, 39, owner of Trend Import Sales and Albert Mardikian Engineering, both in Santa Ana, said U.S. Atty. Robert C. Bonner.

A nephew of Mardikian, Garo Mardikian, 28, of Torrance, who worked in the engineering firm’s testing laboratory, was charged with 10 counts of mail fraud in the indictment.

Albert Mardikian is accused of devising a scheme in which a number of 2,000 European versions of luxury cars he imported in recent years into this country--BMWs, Ferraris, Mercedes Benzes, Lamborghinis, British Leyland Range Rovers and Porsches--were never tested to meet Environmental Protection Agency emission standards.

Bonner and Assistant U.S. Atty. Daniel Broderick noted that so-called “gray market” autos, European-version vehicles imported independently of authorized dealerships, must be tested to meet EPA standards before they can be driven in the United States.

Such testing is necessary, Broderick added, since the autos were not originally intended for sale or use in the United States.

“The (false) submissions (of testing) . . . were intended to result in the release of these vehicles by the U.S. Customs Service, thereby permitting the vehicles to be fraudulently admitted in the United States,” Bonner said.

Broderick said the indictment is part of an extensive investigation into the “gray market” auto import industry in California to ensure compliance with customs regulations and EPA standards.

Albert Mardikian, who was unavailable for comment late Wednesday, has been in a series of legal battles with state and federal authorities over the testings of the autos he imports.

In December, 1981, he was sued in Los Angeles Superior Court by the state attorney general’s office, which alleged that Mardikian and his company “persistently and flagrantly violated” state health and safety laws by selling cars that did not meet California vehicle emission standards.

Mardikian, through his attorney, has denied those charges in the past, contending that virtually all cars tested at his Santa Ana lab passed state emission standards. That case has yet to go to trial.

And in December, 1983, Albert Mardikian sued the EPA in federal court in Washington, challenging the validity of EPA’s refusal to approve tests conducted by his lab.

That case is currently before the U.S. 9th Circuit Court of Appeals, officials said.

Albert Mardikian’s attorney, Leo H. Aregian of Redondo Beach, declined comment late Wednesday on the indictment.

But in the past, he has argued that his client has been a target of government harassment as EPA and other federal agencies work to shut down the “gray market” import industry. He has maintained that the U.S. government is cracking down on independent importers because of pressure being applied by foreign automakers, who see their business in the U.S. threatened.

Mardikian and his nephew face a maximum penalty of five years in prison and a $1,000 for each mail fraud count if convicted.

Albert Mardikian also faces a maximum penalty of five years in prison and a $10,000 for each false statement count if convicted.