Jewelry Designer Martin Katz Burglarized for $2.5 Million Worth of Handbags

Martin Katz -- a famous jewelry designer who has made pieces for some of the biggest names in Hollywood -- was burglarized ... with thieves taking millions of dollars' worth of handbags.

Law enforcement sources tell TMZ ... Katz returned to his home just after 10:30 PM Tuesday to find his window smashed -- noting numerous items were taken.

We're told the thieves grabbed a ton of high-end bags ... including collector's items from Hermès -- some of which were worth a few hundred thousand dollars each.

Cops showed up to the house and searched the property for the burglars -- but, we're told they were long gone.

However, some of the bags they took were outfitted with trackers ... so police were able to track down the bags -- and, they arrested two men on suspicion of committing the burglary.

Law enforcement sources say the two suspects were part of a South American crew that flies all over the world, burglarizes houses, then hops back on a jet and flies home.

Like we mentioned, Katz makes jewelry for some of the biggest stars in the world -- having previously created custom pieces for Kim Kardashian, Nicole Kidman, Angelina Jolie, Jennifer Aniston, Sandra Bullock, Kate Winslet and many more.

"Million Dollar Listing Los Angles" star Josh Flagg is close with the Katz family and issued a statement on their behalf, saying Martin and his wife, Kelly, went out for dinner separately while their home was getting burglarized.

Flagg says Martin received a call from his security company that an alarm got tripped at his house and guards were already responding.

When they arrived, Flagg says, the burglars were dashing from the primary bedroom with hundreds of thousands of dollars in personal property. Flagg  disputed the figure released by law enforcement and that, in fact, it was not worth millions.

Flagg says police SWAT teams were called and arrived within minutes, combing through the house to find that Martin's suitcases were missing. Martin, Flagg says, informed the cops AirTag tracking devices were attached to the suitcases and the police traced the luggage to a downtown L.A. location, leading to the arrest of the suspects.