Federal prosecutors have dropped charges against six defendants arrested as a result of "Operation Greenthumb," a widely publicized FBI-D.C. police operation aimed at fencing rings.

However, federal authorities said yesterday said that evidence is still being presented to a grand jury in U.S. District Court here and that indictments in the case are expected.

The charges were dropped "because the large amount of evidence and the number of witnesses we have to bring before the grand jury" make it impossible to complete the case within the provisions of the Speedy Trial Act, according to Larry Kinsley, spokesman for the FBI's Washington Field Office.

That act requires that indictments be returned within 30 days of arrest. The six were arrested at the end of April and charged with interstate transportation of stolen property. The grand jury, however, is free to reinstate any charges.

Knisley said the FBI is "satisfied with the progress of the case" and "fully expects" indictments of the principals in the alleged fencing ring on "close to a hundred counts" of violations.

When "Greenthumb" was announced, federal and police officials maintained that they had broken up the region's largest gold and silver fencing operation.

Investigators said two gold and silver dealers, Alan D. Danneman and Joseph G. Martin, allegedly used their businesses as fronts to purchase stolen jewels and silverware from burglars who had broken into hundreds of homes in the metropolitan area.

Charges have been now dropped against both Danneman and Martin, as well as four others who allegedly aided them.

Martin has steadfastly maintained his innocence, claiming he was "framed" and "set up" by law enforcement officials. He says he never knowingly bought anything stolen and claims the FBI has wrongfully seized his property, leaving him financially ruined. "The FBI has tortured us from beginning to end," he said yesterday.

Danneman could not be reached for comment.