Federal prosecutors have indicted 11 men in a $20 million operation that for 16 years turned wrecked cars into a real estate empire inside a Brooklyn industrial building, according to the New York Times newspaper.

With the money earned from selling stolen cars and fixed-up wrecks, those who ran the operation bought minimalls, apartment buildings, and shopping centers on Long Island, prosecutors said. Their empire also included a mansion in the wealthy Nassau County village of Upper Brookville.

In the indictment, unsealed yesterday, prosecutors said the chop shop, which was shut down last year, had operated since 1987 under the name Astra Motor Cars, an auto salvage yard in Greenpoint. According to court papers, the operation's strengths were stealing cars, transferring new vehicle identification numbers onto the cars, and then reselling them to unwitting consumers. But in a telephone interview, Gary Brown, an assistant United States attorney, said the shop's clientele also included drug dealers, who rented cars with hollow com-partments for up to $30,000 per day.

The shop's co-owners, Michael Pescatore and Sanford Edmonston, pleaded not guilty at their arraignments yesterday in Federal District Court in Central Islip to a number of charges, including mail fraud and money laundering. Prosecutors said the other nine men were employees of the shop.

Pescatore was released on $3 million bail, but Edmonston was ordered held without bail after prosecutors told a judge that he had threatened to "take care" of a witness, Brown said.

Martin Adelman, a lawyer for Pescatore, declined to comment on the charges yesterday. Neither Edmon-ston nor his lawyer could be reached for comment.

Once, Brown said, Edmonston sold one of the cars with hollow compartments to Albanian drug dealers, but not before equipping it with a global tracking device. Edmonston followed its movements, and one day, he stole 30 kilograms of cocaine from the car, Brown said.

The 18-month investigation that culminated in the indictment began when Suffolk County investigators tracking down insurance fraud cases talked with two car thieves who led them to Astra Motor Cars, prosecu-tors said.

Prosecutors searched and shut down the business in June 2003, and its license to operate was revoked in June, Suffolk County prosecutors said. Edmonston, the company's general manager, and Pescatore, its presi-dent, were arrested last year on similar state charges, and are now awaiting trial.

The federal indictment says the men bought wrecked cars in Florida, rebuilt them with stolen parts, and sold them in New York after bribing an employee of the Ohio Department of Motor Vehicles to issue new titles for damaged cars.

According to the indictment, the defendants sometimes stole a car, stripped its usable parts and left its body on the side of a road. Later, the defendants bought the same discarded frame at a public auction, rebuilt the car and sold it.

They also sold cars to deceased or fictional buyers to put the title into someone else's name, thereby insulating the company from culpability, the indictment says.