The two men accused of running the largest gold and silver fencing operation ever uncovered in the Washington area allegedly told burglars which neighborhoods and homes to hit, advised them on what to steal and lent them money for bail and expenses between break-ins, according to FBI officials and court documents.

One of the alleged ringleaders, Alan C. Danneman, told a burglar to steal only gold, silver and jewelry, and to "leave the big stuff alone," the court papers said. The other, Joseph G. Martin, once lent a thief $5 to buy gasoline for a burglary trip, according to the papers.

FBI affidavits said that although Martin and Danneman preferred precious metals and jewels because of the huge profits to be made on the soaring gold and silver market, they sometimes placed special orders.

On one occasion, FBI court papers said, Danneman told a burglar who regularly sold him stolen items to bring him a 25-inch remote-controlled color television with a videotape recorder.

One burglar said he telephoned Martin from inside a home he was ransacking and asked Martin if he also took fur coats. "Yeah," Martin allegedly replied. The burglar proceeded to take the coat and sold it to Martin, according to the court documents.

When a detective took a burglary victim to Martin's store in Washington last May to look for stolen property, she spotted her father's ring, stolen in a burglary, on Martin's hand, according to court records. Martin handed over the ring after he told the detective he didn't know it was stolen.

Martin, 36, and Danneman, 32, were among 25 people named in arrest warrants issued Tuesday as a result of an eight-month FBI-D.C. police undercover probe dubbed "Operation Greenthumb," an investigation of how fences -- people who buy and sell stolen goods -- operate in the D.C. area. Fourteen people have been arrested since Tuesday, nine others were already in custody and two men are still being sought.

The investigation so far has enabled law enforcement officials to identify 70 burglary suspects and to solve 200 burglaries, mostly of homes in affluent areas of Washington and the Maryland and Northern Virginia suburbs. FBI officials said. Most of the burglary suspects were drug addicts stealing to finance their habits, according to the FBI.

Officials estimated that Danneman and Martin, operating out of businesses that served as fronts, allegedly bought about $3 million in stolen gold jewelry and silverware in the last year.

Agents said they seized $2 million in diamonds, sterling silverware, goblets, tea sets, high school and college rings, chalices, antiques, heirlooms, watches, earrings and other valuable items during searches Tuesday night at Danneman's and Martin's homes and businesses, as well as homes and a business of others allegedly involved in the operation.

Meanwhile, Internal Revenue Sevice agents yesterday closed two business owned by Martin -- the Royal Carpet and Tile Co. at 1785 Florida Ave. NW, and the Royal Gold and Silver Store at 14219 New Hampshire Ave., Colesville, Md.

In addition, IRS agents filed liens totoling $879,000 against Martin, Danneman and Danneman's business, ADE, Inc., at 1411 K ST. NW, for alleged failure to pay personal and corporate income taxes.

FBI officials said yesterday that they have been swamped with calls from burglary victims inquiring about the confiscated items. The officials said it would take several weeks to catalogue the seized items, which are eventually to be put on public display.

Federal authorities have said in court papers that Danneman and Martin reaped huge profits from their alleged illegal fencing network. Law enforcement agents searching Martin's Colesville home Tuesday night found about $250,000 in $50 and $100 bills inside a safe.

The men bragged that they were too smart to get caught, investigators found. "I may be a thief, but they'd have a hard time proving it in court," Martin told one of his employes in a conversation secretly recorded by the FBI.

Each man has professed his innocence and called the other a crook, according to law enforcement officials who have interviewed them.

The pair has been charged with interstate transportation of stolen property, which carries a maximum penalty of 10 years' imprisionment and a $10,000 fine. But law enforcement officials are seeking indictments under a racketeering statute that carries stiffer penalties and affords victims the opportunity to sue for civil damages.

Describing Operation Greenthumb as one of the most extensive investigations ever into fencing operations, agents filed in court more than 150 pages that provide a rare glimpse into how an alleged fencing operation works.

The court papers detail interviews with admitted burglars, former employes of Danneman and Martin, and conversations of Danneman, Martin and others that were secretly recorded by court-approved wiretaps on Martin's business phones and a microphone placed inside his store.

In addition, one FBI agent, posing as a high-living gold and silver expert, working for at least four months as a manager for Danneman. Another FBI agent, posing as a burglar, repeatedly sold gold and silver items to Martin and his employes, often after he told them that they were stolen, according to court documents.

Bureau officials declined to identify the two undercover agents. FBI agent Michael Hartman and D.C. Det. Michael Heidenberg were in charge of surveillance of Martin's Florida Avenue store from a rented apartment across the street, and FBI agent Charlie Byrd and D.C. Detective Sally Kirk monitored Danneman's activities.

The affidavits filed in court charged that Danneman and his employes paid cash for stolen items and gave no receipts, and frequently searched burglars whom they suspected might be carrying recording devices for law enforcement authorities.

A District law designed to prevent fencing in licensed businesses requires that sellers be paid by check and that businesses keep careful records of each transaction.

At one point, one of Danneman's employes gave directions to a house in Lanham, Md., that he wanted broken into; at another time, the employe advised burglars to stick to the affluent Potomac, Bethesda and Chevy Chase sections of Maryland for the best results, according to court papers.

During one transaction, Danneman is quoted as telling a thief, "This piece of silver is monogrammed and it's real hot. I can't give as much money for it." On another occasion he allegedly told a burglar, "This stuff is real hot, I'll have to melt it down quick. I can't pay you as much for it."

Danneman and his employes reportedly told the undercover agent working for him that he would not be caught because he kept no records and law enforcement officials did not have the money or manpower to gain his trust and deceive him.

Law enforcement officials said that penetrating fencing networks is difficult, principally because fences often run legitimate businesses and can claim they did not know that they were dealing with stolen merchandise.

Even the much publicized FBI-D.C. police undercover "Sting" operation in 1976, during which agents posed as fences -- an innovative tehnique at that time -- focused mainly on apprehending petty thieves selling stolen goods.

But law enforcement officials, frustrated at their inability to curtail the growing number of area burglaries, decided last year to attempt to go after fences. "They are the incentive," said Thomas Baker, a senior FBI official here. "If they weren't there to buy stolen goods, the thieves wouldn't steal."

Martin was released from custody Tuesday night after he posted a $50,000 bond.

When Danneman appeared in federal court here yesterday, his attorney said his client, a third-generation resident of the Washington area, "hasn't had as much as a speeding ticket." However, U.S. Magistrate Lawrence S. Margolis ordered Danneman, who lives in Lanham, held under $100,000 surety bond after a prosecutor called him a "greedy promoter" of crime and burglary.