Two brothers who owned jewelry stores in Bethesda and the District admitted in U.S. District Court in Greenbelt that they used their businesses to launder hundreds of thousands of dollars from drug dealers.

The brothers said they made numerous cash sales of jewelry to customers who they knew were paying with drug money, according to federal prosecutors and court records.

Moshe Motai, 43, and Daniel Mutai, 41, both of Potomac, each pleaded guilty on July 28 to conspiracy to commit money laundering.

Motai and Mutai each could be sentenced to as much as 20 years in prison and a fine of $500,000. U.S. District Court Judge Peter J. Messitte, who accepted their plea, had not scheduled a sentencing date as of early this week.

"Laundering drug profits and providing a market for stolen property facilitate crime," said Maryland U.S. Attorney Lynne A. Battaglia. "Federal law enforcement, in partnership with local police, are determined to end the low-risk, high-profit business of those who deal with the dealers."

In pleading guilty, Motai and Mutai admitted that beginning in the late 1980s through April 1999, when they were indicted by a federal grand jury, they owned and operated the Jewel Collection, a retail and second-hand jewelry store at 1250 Wisconsin Ave. NW.

The brothers said they developed a clientele of drug dealers, who made large purchases of pricey jewelry in cash and would deal only with Motai and Mutai, not any of the other store employees.

Motai and Mutai acknowledged that they did not generate sales receipts to document their transactions with the drug dealers and did not fill out forms for sales of more than $10,000, as required by the Internal Revenue Service.

The brothers also said they purchased stolen jewelry from some individuals and made no record of those transactions.

Motai admitted that he often took large sums of cash from the store to his home, where he stored the money under the floorboards of his house. He said he smuggled some of the money out of the country and deposited it into a bank account held under his wife's name in Israel.

The brothers acknowledged that in June 1995, they used some of the laundered money to buy the Bethesda Jewelry Exchange at 7747 Old Georgetown Rd.

In March 1995, Motai opened a bank account at Citizens Bank of Maryland in the name of Baruch Pondak, a business associate, Motai said. Two months later, Motai wired $199,985 from the account held in his wife's name in Israel to the Pondak account. One month later, in June 1995, Daniel Mutai and Moshe Motai used $140,000 from Pondak's account to buy the Bethesda Jewelry Exchange, the brothers acknowledged.

Some of the same drug dealers who had shopped at the Jewel Collection began patronizing the Bethesda store and making cash purchases that were not recorded, and the brothers continued to buy stolen jewelry there, Motai and Mutai admitted.

Daniel Mutai also admitted that he provided other services for drug-dealer customers at the Bethesda Jewelry Exchange. Mutai admitted that he provided false paperwork for some customers who needed to show a legitimate source of income and exchanged small denomination bills for large bills for drug-dealer patrons.

Under their plea agreements, Mutai and Motai agreed to forfeit to the U.S. government all of the assets and inventory of their two stores, along with other assets that U.S. Customs agents and Montgomery County police had seized.

Pondak, 47, of Rockville, has pleaded guilty to money laundering and is scheduled to be sentenced tomorrow.

Two other co-defendants, Robert Miller, 39, and Andre Coxson, 27, an alleged drug dealer from Baltimore, are scheduled to go on trial Feb. 15. They are both charged with money laundering.