Officials say the incident began around 4:00 a.m. Thursday when the owner of VIP Jewelry Store was asleep in the second floor apartment above the store.
Investigators say the man, identified only as Mustafa, was woken up by three to five armed men. The man told police that one of the bandits shoved a machine gun in the his face.
The men allegedly demanded money and keys to the store below the apartment.
Once in the store the males are said to have made off with about $700,000 in jewelry.
The owner of the store told police he was bound and and had a pillow case placed over his face.
"He definitely has nice stuff in there. I've known him a long time," said merchant Nat Michael.
Police are not talking about surveillance cameras in the store. Mustafa says the gunmen were wearing hoodies.
Another curious item - Mustafa's manager, a source for much of this story, says there are no signs of forced entry into his apartment. In other words, the robbers got through two locked doors which remain in their original condition.
Many other South Street jewelry merchants were shocked and fearful in the wake of this and refused to talk.
"It's pretty scary," Michael said. "Something like that at night is definetely something to be nervous about."
Police confirm that VIP Jewelers was robbed in mid-July in broad daylight by an unmasked man who talked Mustafa into letting him walk out of the store with a watch worth $120,000 and a $40,000 necklace.
Police are gearing up for an all-out manhunt, fearing the bandits could be planning another heist already.