D.C. police have confiscated more than $1 million in stolen property and a large cache of drugs in raids at the home and business of a Washington merchant, police officials announced yesterday.

Police said the raids were conducted Monday afternoon at Ma-lart Inc., a small retail business at 5416 Georgia Ave. NW owned by Mallion J. Davidson, and at Davidson's home, 3116 Alabama Ave. SE.

Davidson, 46, was arrested at the Georgia Avenue address and charged with possession of heroin and cocaine with intent to distribute and trafficking in stolen property, police said. He was arraigned in D.C. Superior Court yesterday and released on $4,000 bond.

During a press conference at a police storage facility yesterday, Inspector Edward J. Spurlock of the Repeat Offenders unit, which headed the investigation, displayed an assortment of gold necklaces, watches, silver coins, money, and building fixtures seized in the raids.

"We found at the business heroin worth about $500,000 and $30,000 worth of cocaine," Spurlock said. "We took $20,000 in stolen properties out of the business. At the same time, we were searching the home and found over $1 million in rings, jewelry, coins and other property as well as some cocaine."

Police alleged that the business, located in a one-story brick building, was being used as a "front" for what they described as one of the city's major fencing operations, and that stolen items were apparently being "bought, sold and stored" there.

"We would see people go there and sell goods," Spurlock said. "These were known burglars that would go there often."

Spurlock added that the raids represented "the largest breakup of a fencing operation" in the District in four years and that the investigation was continuing.

A Georgia Avenue shop owner, who works near Mallion's business and who asked not to be identified, said he had seen workers renovating the building in recent weeks. He also said brown paper had been taped inside the building's windows.

"I saw carpenters, plumbers and electricians going in and out of the place a lot," he said. "They just finished putting stucco on the front."

Police said they began their undercover investigations last month after receiving a tip from the FBI.

Spurlock would give no details about the tip.

Police are trying to find the owners of the alleged stolen property by distributing pictures of the recovered items to local television and radio stations and newspapers, Spurlock said.