An intricate $125,000 gold-and-diamond snuff box, created for Russian Empress Catherine the Great and stolen two years ago from the Smithsonian Institution, was stripped and melted down last year as part of an alleged precious metals fencing operation, the FBI revealed yesterday.

Smithsonian officials, who were reported "heartsick" at the loss of the art object during a building renovation in September 1979, were even more despondent yesterday when informed of its fate.

"All of us hoped that thing would never be destroyed," sighed Margery Byers, a spokeswoman for the museum. "Oh, this is really sad. Melted down! That's all I can think of!"

The FBI learned of the demise of the snuff box during "Operation Greenthumb," an ongoing investigation into Washington-area gold and silver dealers who allegedly buy stolen goods and dispose of them en masse at great profit.

As a result of the investigation, a former D.C. resident, Ronald J. White, 32, pleaded guilty in U.S. District Court here yesterday to conspiracy to receive stolen federal property.

According to court papers filed in connection with the plea, White acknowledged receiving the snuff box from an unnamed individual in April 1980, then stripping it of the diamonds and arranging for it to be melted down soon after. At the time, White was office manager for Ade Inc., a gold and silver dealership at 1411 K St. NW.

An Ade official paid $1,800 for the box to a customer who brought in a picture of it and a newspaper article describing its theft, according to the court papers. The enamel panels on the box depicting the 1762 coronation of Catherine the Great were then removed to prevent further identification and have not been found. Law enforcement officials said they have recovered about 25 of the more than 200 diamonds that lined the box, which was about twice the size of a package of cigarettes and the work of two of Europe's most skilled artisans.

Before its theft, the snuff box had been at the Smithsonian for 50 years, the gift of a wealthy New York art collector.