Commentary on the Palfrey case and some parallels

These come from a community I belong to, and are written by a lawyer (posted with permission):

“As for agencies charged with money laundering, there’s N.Y. Confidential (Jason Itzler/Paul Bergrin), American Beauties (Jenny Paulino), Julie’s (Julie Moya), NY Elites (Elena Trotchenkova et al), Exclusively Yours (Barbara Eileen Tanner), Jeanette Maier…those are just a few.”

This list is interesting. The first three escort agency cases on the list were prosecuted under state law by the Manhatten District Attorney’s office. The third case, NY Elites, was a federal case investigated by the Immigration and Customs Enforcement agents, targeting immigrants and potential trafficking. I found a news article, in which the feds admitted this case was unique for them:

” Federal prosecutors in Manhattan said in court records this was their first-ever case under the law barring interstate prostitution that does not involve trafficking, the mob or tax evasion. But they denied it was a case of selective prosecution.”

The last two on the list were also federal. Exclusively Yours was a Virginia case, but my brief search didn’t turn up much about it. The last case you listed, Janette Maier, brought back some old memories. That was the case of the New Orleans madam who, along with her mother, ran a brothel in a residential neighborhood. It was shut down in the early 2000s when the FBI raided the place. The feds tried to make a serious racketeering and money laundering case, but they failed miserably. At the end of the day, Ms. Maier pleaded guilty to one minor count of money laundering, involving a $695 rent check. The federal judge, Ivan Lemelle, was plainly less than pleased with the government’s choices on how best to allocate their resources, particularly after 9/11. This is from a news account describing the sentencing:

“Then it is the judge’s big moment. He speaks slowly, seeming to choose his words with care. He mentions that these charges should have been brought in local courts, but were not. He also mentions that no charges have been brought against those johns ‘who have kept this business active.’
The sentence comes out like this: Jeanette Maier will report on May 19 to a VOA halfway house for a six-month sentence and pay a $10,000 fine, interest waived. In 49 minutes, the People of the United States are finished with Jeanette Maier. Or at least those people who matter in these matters. … “

Even more interesting is the debate that the case, and Ms. Maier’s secret list of well connected clients, spawned in New Orleans. The press came down hard on the feds for waisting their resources, particularly after the U.S. Attorney said that federal laws didn’t permit prosecution of the johns. Many local politicians and people in the legal community began seriously debating whether prostitution should be legalized and whether it made sense to put the women behind bars and not touch the well healed, well connected clients.

This is an excerpt from another local news account of the case:

“A mere seven months after the attack on the World Trade Center and the Pentagon on Sept. 11, armed with evidence from months of court approved telephone wire taps, a team of FBI agents answered the tourists question by storming a two-story Victorian house on the 4300 block of Canal Street, just up the road from the French Quarter in Mid-City.

They busted Jeanette Maier, 43, and her mother, Tommie Taylor, 62, for conspiracy to run a prostitution ring operating across state lines. In the raid, they seized the booking and billing records containing the names of hundreds of clients, some of them prominent and married.

Both women admitted running a high-priced brothel using prostitutes who worked for $200 to $300 an hour using women who traveled a national prostitution circuit from New York to Boston, Pittsburgh and Atlanta. And they both agreed to cooperate with prosecutors, even if that meant naming names, according to attorney Vinny Mosca, who represents Ms. Maier and Ms. Taylor.

“My clients have an agreement with the government to cooperate,” Mr. Mosca said. “If agents of the government debrief them, they will give truthful answers to any questions asked.”

According to telephone wiretap record summaries, the names that could come out if there is a trial in the future include cops, at least one judge, a telecommunications mogul, a former head of the prestigious Mardi Gras society Rex, a partner in a prominent law firm, a member of one of the city’s leading restaurant families, an executive with a large chemical company, bankers, stockbrokers, oil-field workers and a former professional football star.

The FBI got the green light to investigate goings on in the two-story, white-columned Victorian house by claiming a link to drug dealing and organized crime. Up to 10 agents worked on the case.

Apparently not enough evidence turned up to make a major racketeering case, however, so the federal indictments only included one minor marijuana charge against Loretta Mims, a 62-year-old New Orleans woman, who pleaded guilty May 8.

Ms. Taylor pleaded guilty to one minor count of money laundering, admitting she used profits from prostitution to write a $695 rent check. Prosecutors dropped five counts of money laundering and a marijuana conspiracy charge against the women in a plea bargain agreement, in exchange for their cooperation.

The prospect of the names coming out has some of the well-heeled in town a bit worried. Not all of the defendants have entered guilty pleas — including some of the 10 suspected prostitutes in other cities — which is why a trial is still a possibility in August. The booking and billing information could then be used as evidence and become part of the public trial record.

Sentencing for Ms. Maier, the madam, and Ms. Tayler, who helped run the business, is scheduled for August 28.

The case presents a puzzle for the local legal community, especially since acting U.S. Attorney Jim Letten said that there is no federal statute dealing with the customers when he announced the indictment in April.

“It demonstrates the lack of priorities on the part of the FBI and the Justice Department,” Arthur A. “Buddy” Lemann III, one of the most experienced of the city’s criminal defense lawyers, said in an interview. “It’s a waste of time and money to spend all these federal resources to investigate a couple of ladies of the night. To make a federal offense out of it is like using an elephant gun to kill a fly.”

They say prostitution is the world’s oldest profession, but suicide bombers are the newest national security threat and the top priority of the Bush administration. So some people, even in Washington, D.C., wonder what the FBI was doing investigating a brothel with so many agents for so many months prior to and since Sept. 11.

“If the FBI can spend resources investigating whether there is prostitution in New Orleans, they ought to be able to find the resources to investigate what happened in this country prior to 9/11,” Sen. Tom Daschle, D-South Dakota, said in a news conference last week.

The issue made the national television talk shows, and even James Gill, a columnist with the Times-Picayune newspaper here, took the FBI and Justice Department to task.

“The feds might have failed to anticipate the attacks on the World Trade Center and the Pentagon and ignored anti-American tirades from Arabs enrolled in our flight schools, but a handful of prostitutes would be relentlessly pursued,” Mr. Gill wrote.

Ken Kaiser, special agent in charge of the New Orleans FBI office, said the backlash is frustrating. The brothel investigation was a good one, he told the Times-Picayune newspaper, and is an example of the FBI doing its job of being a domestic watchdog.

“To say this was a tremendous waste of FBI resources,” I deny it,” he said.

Orleans Parish District Attorney Harry Connick turned down an invitation in the form of a letter from Mr. Letten to review evidence in the case for a possible state prosecution.

“This is their case, and I don’t know why they would want to give it to us,” Connick told the Times-Picayune. “They spent so much time and money on it already. They could certainly include the customers as principals.”

Mr. Letten maintains there is no federal statute to deal with “johns,” and that any prosecution of customers would have to be pursued in state court.

Mr Lemann said the case is like a hot political potato Mr. Connick declined to catch. He said there is no guarantee the list of clients, in the form of booking and billing records seized from the Canal Street brothel by the FBI, will ever come out.

Local sentiment is there are too many rich and powerful people named in the records for the list to ever be made public.

“I don’t think the list will ever come out,” said real estate developer Bobbie Monroe, an Old Absinthe House regular on Fridays.

Some think the case should open a debate about an issue that has lingered just beneath the surface of propriety here since cops ran prostitution out of the red light district on Bourbon Street in the 1950s and ’60s: Should prostitution be legalized? “

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2 Responses

  1. I have recently been told that Janet Maier’s cooperation with the government was against the 10 women who you named above. Me being one of them. No the names of the clients didn’t come out. Just the names, addresses and phone numbers of all us women. She actually made phone calls to all the women under the direction of the feds trying to entice them into some nasty stuff. Nobody went for it.

  2. With Julie Moya out of jail, finished with her probation, and back in business in a very public way, you have to wonder why anyone bothers with these prosecutions.

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