D.C. police arrested the alleged leader of a major drug distribution ring and three other people yesterday after seizing nearly $60,000 in herion and suspected cocaine along with about $100,000 in jewelry and 11 handguns.

Officers said evidence seized in the raids, which culminated a four-month investigation, indicated that John Dabney Brock Jr., 31, of 4264 Massachusetts Ave. NW, the alleged ringleader, was a man with expensive tastes who spent money freely on fancy cars and personal entertainment.

Brock, who police say appears to be unemployed, owned seven cars, including a Mercedes-Benz, a $50,000 Rolls-Royce and a BMW sports car, police said. In recent weeks, investigators said, Brock checked into the Hyatt Regency Hotel on Capitol Hill and ran up a $1,700 bill in four days. hPolice said he ran the drug operation out of three houses raided yesterday at 1902 11th St. Nw, 2265 Sherman Ave. NW and 3705 Alabama Ave. SE.

Capt. James P. Nestor, head of the police narcotics squad, called the ring a major source of narcotics in the city and said the raids came after officers Phil Michaels, Ira Heane and others spent four months observing Brock and other alleged participants.

During the same period, Nestor said, police also had spotted color-coded bags of suspected narcotics -- with the brand name "Outer Limits," "Feeling Good," "Mightly Real" and "Twilight Zone" stamped on them -- in all parts of the city. In yesterday's raids, officers recovered rubber stamps bearing the same names, leading investigators to theorize that the ring was the source of the coded bags.

Police said they believe the group amassed the estimated $100,000 in jewelry, incuding expensive watches, bracelets and rings, from drug users who sometimes paid the jewelry instead of money. Included in the jewelry were an $11,000 gold Rolex watch, outlined with diamonds, and a diamond-studded crucifix, police said.

Investigators also seized $20,000 in $20, $50 and $100 bills. At least one counterfeit $100 bill was also found, they said.

Others arrested were Ann Betty Perry, 27, who police said was Brock's common-law wife, Maria Lopez, 20, and Mary Charlotte Sales, 54, both of the 1902 11th St. NW address. The three women and Brock were all charged with possession of drugs with the intent to distribute.

They were released under $2,500 bond each. Police said a bail bondsman for the suspects appeared at the police station promptly, permitting them to be released from custody shortly after their arrests were processed. Officers said the investigation is continuing and more arrests are expected.

Shortly after noon yesterday, teams of about 20 police officers armed with search warrants staged simultaneous raids on the four residences.

They said they seized a total of 600 bags of heroin with an estimated street value of $30,000 and nearly a pound of suspected cocaine that would be worth more than $28,000. Also recovered were a sawed-off shotgun and a rifle.

Investigators said they found drugs and a variety of other items hidden underneath floors, inside walls and in secret drawers.

When officers searching the 11th Street house noticed that the flooring was loose, they became suspicious and began ripping up the floor boards. Underneath, police said, they found a cache of handguns.