A Glendale detective, a suspected mobster and the Mexican Mafia
The Escalade was headed down a dreary and industrial stretch
of road in Commerce when the first bullet buried itself in the driver’s back.
He stomped on the gas. Bullets slammed into the car. Blood leaked from his gut.
The black SUV was ferrying the son of Lev Aslan Dermen, a
petroleum mogul and suspected organized crime figure. His son escaped,
unscathed.
The shooting drew little notice until a year later, when an
extortionist for the Mexican Mafia contacted a Los Angeles Police Department
detective from jail with a startling story: The gunman was a gang member, he
said, but a Glendale detective had offered him $100,000 to “scare” someone,
according to an affidavit that details his statement.
The detective, John Saro Balian, was Dermen’s close
associate of a decade, court documents and testimony have since revealed. They
traveled together to Turkey and partied together in Las Vegas. Dermen came to
trust the detective with the most delicate of tasks, the records show.
The allegation that Balian betrayed his associate and
arranged the July 14, 2016, attack remains unproven. No triggerman has been
charged. While Balian’s alleged role in the shooting was detailed in court
documents, he wasn’t charged in the incident and instead pleaded guilty to
three felonies, none of them violent.
His attorney, Craig Missakian, denied the detective was
behind the shooting and said in court the allegations came from the mouths of
witnesses who, facing prison for crimes of their own, were trying to save
themselves “by pointing a finger at a high-profile cop.”
Two years after the attack, the detective and the petroleum
mogul were behind bars — Balian charged in Los Angeles with concealing from
federal agents his dealings with the Mexican Mafia, Dermen indicted in Utah,
implicated in an energy subsidy scam that allegedly bilked the U.S. Treasury of
$511 million.
The Times pieced together the story of their unlikely
alliance and its bitter end through court records, testimony and interviews
with people who knew both men.
They each came to Southern California as children, Dermen
from Armenia, Balian from Turkey, where his Armenian family fled religious and
political upheaval. But their lives in the United States took very different
paths.
Balian’s family opened a small restaurant in Orange County.
Bussing tables and washing dishes as a boy, he came to see the police officers
who ate there as a second family, his attorney wrote in court papers.
Balian enrolled in the police academy at 23 and joined the
Montebello Police Department in 1996. He flourished there: Officer of the Year
in 2001, tapped to join the gang unit. “He was seen as a shining star,” said a
former colleague who did not want to be identified because of Balian’s admitted
ties to organized crime. “Everybody thought the world of him.”
Dermen, born Levon Termendzhyan, left Armenia at 14 for Los
Angeles. He enrolled at Hollywood High and took his first job pumping gas at a
La Crescenta station. In the quarter-century that followed, Dermen bought up
gas stations, opened a string of truck stops and started petroleum companies in
Vernon and Commerce, he said in a 2017 deposition.
He became enormously wealthy. He held court at the Beverly
Wilshire and traveled in black SUVs, flanked by bodyguards. Parked behind the
gate of his Bel Air home was a Bugatti, a Lamborghini, a Maybach and a Rolls
Royce.
In 1993, Dermen, then 26, and his brother were charged with
selling untaxed diesel fuel. They were acquitted, and Dermen’s mythos of
operating beyond the reach of the law was born, federal prosecutors wrote in a
recent court filing.
Over the next 25 years, Dermen and his energy empire were
investigated by the Internal Revenue Service, the Environmental Protection
Agency, Homeland Security Investigations, the FBI, and the Glendale and Los
Angeles police departments, according to evidence introduced during the trial
of his associate, his cousin’s appeal of a kidnapping conviction and warrants
served on Dermen’s home and businesses in 2017.
He was suspected of laundering money, evading taxes, and
stealing fuel and selling it in his gas stations, the warrants show; charges were
never brought. He was arrested by the Glendale police in 2003, accused of
brandishing a handgun at a plainclothes detective who was tailing his cousin,
and acquitted after two trials. Law enforcement authorities have yet to
convince a jury anywhere that Dermen committed a felony.
Mark Geragos, who has represented Dermen for more than a
decade, has insisted to judges and juries that his client is no criminal
kingpin, only a savvy, successful businessman in the oil and gas industry.
By 2006, Balian was the spokesman for the Glendale Police
Department, having transferred from Montebello two years earlier. Dermen was
awaiting trial in the alleged assault of the Glendale detective. Under
circumstances that remain unclear, the two met that year at a deli in Burbank.
Lawyers for both men would not discuss what went on there.
But over the next decade, the two grew close. Dermen “surrounded himself” with
law enforcement officers, federal prosecutors wrote in a recent court filing,
to convey to business partners that he was insulated from prosecution.
A federal jury in 2018 convicted Felix Cisneros, a Homeland
Security Investigations agent, of unlawfully helping Dermen’s business partner
travel between the United States and Mexico, where he was negotiating a deal on
Dermen’s behalf with Pemex, the state oil company. Cisneros told investigators
he intervened as “a solid” for Dermen and Balian, who he said was also involved
in the incident, according to a transcript of the interview. Cisneros spent a
year in prison for the offense.
Balian was Dermen’s frequent companion. The two were pulled
aside at LAX before boarding a flight to Istanbul in 2011. Balian told customs
he was carrying $18,000 in cash that belonged to Dermen, according to a law
enforcement document reviewed by The Times. Nothing in the document suggests
that carrying the cash was unlawful.
In 2014, according to an affidavit for his arrest, Balian
took on a sensitive task. Dermen’s cousin — a squat émigré of the Soviet Union
known as “Gordo” — was serving a life sentence at Pelican Bay State Prison for
a kidnapping conspiracy. Central to his conviction was the testimony of a man
named James Anthony Patlan, according to an appeals court’s decision that
summarized the case.
Patlan had tried in 2002 to abduct a wealthy Armenian baker
at gunpoint in Glendale. Arrested that night at Glendale Memorial Hospital, he
told a detective he was joined in the botched kidnapping by a short, overweight
Armenian man he knew only as “Gordo.”
Shown a lineup of possible “Gordos,’ Patlan picked out
Dermen’s cousin, Arutyun Khrayan, who stood 5’1 and weighed 225 pounds,
according to the appeals court’s decision. Khrayan was convicted of kidnapping
for ransom in 2008.
Six years later, with Dermen’s cousin appealing the verdict,
Balian offered an associate with ties to the Mexican Mafia $80,000 to find
Patlan and persuade him to recant, according to the associate, whose statements
are detailed in Balian’s arrest affidavit. Patlan was out of prison, having
served a 10-year sentence. Furnished with addresses and license plate numbers,
two gang members — Pete Cordero and Jorge “Bouncer” Grey — set out to find him,
Grey testified in August.
“They were trying to pay him,” Grey explained to a jury in
federal court. “Gordo, you know, his family wanted him freed, and they were
willing to pay this guy to retract his statement.”
“If you had found this witness,” a defense attorney asked,
“and he said, ‘No, thanks very much, I’m not interested,’ you were just going
to walk away?”
“No,” Grey said.
They never found Patlan, Grey testified, and Khrayan remains
in prison. Missakian, Balian’s attorney, acknowledged in court the detective
tried to track down the witness. But “the effort,” he said, “was to try to get
Mr. Patlan to tell the truth” about a “very tainted and disturbing” process the
Glendale police used to implicate Dermen’s cousin in the kidnapping.
The pursuit may not have turned up Patlan or sprung Dermen’s
cousin from prison, but it did bring Balian into contact with the Mexican
Mafia, the criminal syndicate born six decades ago in the California prison
system, according to the affidavit for his arrest.
Associates of the gang, trading testimony for leniency, have
implicated the detective in various extortion plots. He has been charged in
none of them. One was allegedly hatched after Cordero, who Balian had enlisted
to find Patlan in 2014, was shot to death in Highland Park.
Jose Sanchez, a Mexican Mafia associate, testified in a Van
Nuys courtroom in December that he and the detective attended Cordero’s funeral
at Rose Hills, then shook down an Armenian bail bondsman said to be on a hit
list drawn up after Cordero’s killing.
Balian relayed an order from Cordero’s best friend, a jailed
Mexican Mafia member tasked with exacting revenge, Sanchez testified: The
bondsman, Mihran Papazian, could buy back his life for $100,000.
“I can’t pay that, I can’t pay that, I don’t have that type
of money,” Sanchez recalled the bondsman pleading. “Balian kept saying,
‘They’re bullshitting you that they don’t have money.’ To keep slapping him, to
keep pressuring him, and they’ll pay.”
With Papazian proving uncooperative, the detective told Sanchez
to hire someone to shoot up his car in front of his house, Sanchez testified.
He said he demurred: “I wasn’t going to get someone’s house shot up just over
bullshit, especially coming from a cop.”
Through his attorney, Balian said he has “no idea what
Sanchez was talking about and denied any truth in his claims.”
Papazian tried to placate Sanchez with firearms and six
pounds of marijuana, Sanchez testified. He said he kept the guns, sold the
marijuana and gave Balian $1,000 of the proceeds. Sanchez was then arrested on
an extortion charge.
But the bondsman’s woes did not end there. On a Sunday
morning in October 2017, his 73-year-old father returned from walking the
family dog and was shot to death outside Papazian’s home in Valley Glen. Five
months later, Papazian’s friend and cousin were gunned down on his front porch.
Assassins dispatched by the Mexican Mafia had mistaken
Papazian’s cousin, friend and father for the bondsman, authorities said at a
preliminary hearing. No testimony or evidence was introduced at the hearing
that implicated Balian in the killings.
By 2016, two views of Balian had developed within Glendale
police headquarters. To his supervisors, he seemed as hardworking and
good-spirited as ever. He took the lead on nine investigations that year,
including one that netted 13 pounds of heroin and a mention in the Glendale
News-Press, his performance review noted.
A sergeant described him as “trustworthy and reliable,”
“always upbeat,” and bringing to the narcotics squad “a sense of high morale,
good teamwork and cohesiveness.”
An FBI-led task force, focused on Russian and Armenian
organized crime and stationed in the same building, had by then formed a much
different impression of the detective. In December 2015, a car thief told a roomful
of agents, who were investigating a suspected narcotics trafficker, that their
target had an associate who wore a badge and a gun. Shown a series of
photographs, the thief identified Balian “without hesitation,” the affidavit
for his arrest said.
The agents weighed whether to recruit a Glendale officer to
approach Balian and propose they commit crimes together, according to law
enforcement documents reviewed by The Times. They decided against it, reasoning
such a strategy was more likely to raise his suspicions than succeed. As a
precaution, the Glendale officers assigned to the task force were walled off.
LAPD detectives began tailing Balian’s unmarked grey Honda sedan through the
streets of Los Angeles.
As investigators closed in, his relationship with Dermen was
collapsing. In a lawsuit playing out in Los Angeles Superior Court, Dermen said
businesses he’d helped Balian finance — a beverage company in Nevada and a fuel
dock in Newport Beach — had failed and the detective owed him money. Through his
attorney, Balian denied taking money from Dermen and said the Nevada business
was funded with a loan from the U.S. Small Business Administration.
Dermen alleged in a declaration that Balian conspired with
an estranged business partner, Edgar Sargsyan, who he says embezzled $23
million, “to take me down to ensure they would not be responsible for the tens
of millions of dollars they owe.” Sargsyan, who didn’t respond to requests for
comment, said in court papers he cut ties with Dermen after learning he was
under investigation. He denied stealing money from Dermen or conspiring with
Balian.
The evening of July 14, 2016, Dermen’s son was in a black
Escalade, headed home from his father’s office in Commerce. The son’s
bodyguard, who asked that his name be withheld out of safety concerns, told The
Times they had pulled up to a stop sign when he felt a burning in his lower
back.
He spun around and saw stuffing from the SUV’s seats filled
the air. He realized someone was shooting at them, that the seats were being
punctured by bullets, and he slammed on the gas. Once he reached a safe
distance, he pulled over and told Dermen’s son to call 911. He looked down at
his hands, which had been clutching his stomach. They were covered in blood.
The task force investigating Balian took an interest in the
shooting: The agents, who knew Dermen well, at one point theorized his son may
have been targeted by an Armenian organized crime figure whose own son was
murdered two months later, according to court testimony. It was a dead end, an
FBI agent testified in 2018.
They had few leads until about a year later, when Sanchez —
facing a long stretch in prison for extortion and narcotics trafficking —
decided to “drop out,” as he put it in court.
In an interview with LAPD detectives at the Los Angeles
County jail, Sanchez implicated Balian in a series of crimes, including the
Commerce shooting, according to the affidavit for Balian’s arrest.
The detective, he said, had offered him and another gang
member, Jonathan “Trigger” Montano, $100,000 to scare somebody — an Armenian
man he didn’t know, according to the affidavit. Sanchez said he didn’t take part
but lent his Honda Pilot to Montano, who returned the car that night, handed
Sanchez a gun and said, “I think I hit him.”
That night, Sanchez told the detectives, Balian came to his
apartment in downtown Los Angeles and took the gun. Balian’s phone pinged off a
cell tower two blocks from Sanchez’s apartment at 10:37 p.m., according to the
arrest affidavit.
Reached by phone, Montano denied meeting Balian or having
any role in the attack on Dermen’s son. “All I can say is those are false
allegations,” he said. “The cops came and asked me about it when I was in jail,
and I told them I don’t know anything about that. I’ve never met the guy. I
have nothing to do with him.”
Balian’s attorney denied, both in court and in a statement
to The Times, that the detective had any role in the shooting. He called into
question Sanchez’s credibility and motives, saying he and other witnesses were
“obviously trying to help themselves, and if they can help themselves by
pointing a finger at a high-profile cop, so be it.” Sanchez has pleaded guilty
to extortion and narcotics trafficking charges. Jeff Mitchell, the assistant
U.S. attorney who prosecuted Balian, said in a sentencing memo there wasn’t
enough evidence to tie him to the attack conclusively.
Balian was arrested in May 2018, charged with lying about
his dealings with the Mexican Mafia and Armenian organized crime figures. The
detective, held in solitary confinement for his own safety, soon agreed to
cooperate and pleaded guilty to three felonies. He admitted taking a $2,000
bribe, tipping Grey, the former Mexican Mafia associate, to his impending
arrest, and lying to federal agents about his “criminal business relationship”
with Sanchez, among other falsehoods.
A grand jury in Salt Lake City, meanwhile, was hearing
testimony alleging that Dermen had conspired with Jacob and Isaiah Kingston,
leaders of a fundamentalist Mormon sect in Utah, to plunder a half-billion
dollars in biofuel subsidies and stash the proceeds in Turkey. He was arrested
three months after Balian.
Since then, prosecutors have hinted at why he befriended
Balian: Dermen, they say, charged the Kingstons tens of millions of dollars to
come under the auspices of “the umbrella,” as he called his coterie of lawmen.
Geragos, Dermen’s attorney, dismissed this account as a “fairy tale” concocted
by government witnesses facing decades in prison.
It is unclear, in the prosecution’s telling, whether Balian
or other law enforcement officers supplied Dermen with actual protection from
the law or merely the impression of it. The umbrella “sounds like a fairy
tale,” a prosecutor, Leslie Goemaat, acknowledged in court, but Jacob Kingston
“believed in this — he believed in this umbrella.” In one instance, Kingston
sent Dermen $70 million to pay off “the umbrella,” prosecutors allege.
Kingston — who has pleaded guilty to several dozen counts of
fraud, money laundering and witness tampering — will testify he saw Dermen and
his associates hand cash to law enforcement officials in Southern California, a
judge in Turkey and government ministers in Belize, prosecutors wrote in a
court filing.
John Saldivar, prime minister-elect of Belize, has already
resigned; prosecutors revealed text messages between the minister and Kingston,
in which Saldivar wrote he “really [needed] the February tranche,” and that the
“usual is 25k but perhaps it’s best to deal with March at the same time.”
Dermen’s trial began last month; if convicted on all counts,
prosecutors say he could spend the rest of his life in prison.
Balian was sentenced last March. He offered little
explanation for what he called “serious errors in judgment” in a letter to the
court, although he said he wished he could tell his younger self “to ignore the
lure of money.” He was ordered incarcerated for 21 months, 10 of which he had
already served, and walked out of prison in November.
His former colleague from Montebello, remembering the young,
ambitious officer who had impressed so many, said he was stunned to hear Balian
was working with the Mexican Mafia and Armenian organized crimes figures, as he
has since admitted doing.
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