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Anonymous
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Tuesday, Oct. 10, 2006 8:12 a.m. EDT
D.C. Prostitution Ring: Next Scandal
Federal agents have seized more than $427,000 in cash and stocks from a woman accused of running a money-laundering scheme from her Washington-based prostitution business, court records obtained Monday show.
The woman, Deborah Jean Palfrey of Vallejo, Calif., could not immediately be reached for comment by The Associated Press. An affidavit filed in U.S. District Court in Washington describes a two-year investigation into a steamy scam that netted Palfrey more than $750,000 since January 2000.
Palfrey's clients may have included wealthy doctors and lawyers in Washington and its Maryland and Virginia suburbs, but no well-known names have so far surfaced, said a law enforcement official who spoke on condition of anonymity because the investigation is ongoing.
The escort service, Pamela Martin & Associates, advertised in newspapers, on Web sites and in the Yellow Pages. It operated since 1993 "as an out-call prostitution business" of college-educated women with other jobs, the affidavit claims.
The women, all at least 22 years old, told investigators that Palfrey urged them to work for her at least three nights each week and charge their clients up to $300, according to the affidavit. It said the prostitutes would send half of their fee to Palfrey using money or postal orders, illegally laundering the money so it would be hard to trace.
Palfrey then deposited the money into at least five bank accounts, which paid for her mortgage, car lease and an estimated $136,000 worth of stocks, the affidavit claims. Investigators with the Internal Revenue Service seized $427,137 in money and stocks from the accounts on Oct. 3 with search warrants issued Sept. 29 by U.S. Magistrate Judge John M. Facciola.
The investigation, which began in June 2004, was conducted by the IRS and the U.S. Postal Service. Representatives for both agencies declined to comment Monday. Palfrey was convicted in 1991 for operating an illegal prostitution business in California and served 18 months in prison, according to the affidavit.
The sting was first reported Monday by the Web site The Smoking Gun, which said it tracked Palfrey down in Germany. According to the Web site, Palfrey said her employees did not participate in "illegal sexual activities." She said the business closed in August.
D.C. Prostitution Ring: Next Scandal
Federal agents have seized more than $427,000 in cash and stocks from a woman accused of running a money-laundering scheme from her Washington-based prostitution business, court records obtained Monday show.
The woman, Deborah Jean Palfrey of Vallejo, Calif., could not immediately be reached for comment by The Associated Press. An affidavit filed in U.S. District Court in Washington describes a two-year investigation into a steamy scam that netted Palfrey more than $750,000 since January 2000.
Palfrey's clients may have included wealthy doctors and lawyers in Washington and its Maryland and Virginia suburbs, but no well-known names have so far surfaced, said a law enforcement official who spoke on condition of anonymity because the investigation is ongoing.
The escort service, Pamela Martin & Associates, advertised in newspapers, on Web sites and in the Yellow Pages. It operated since 1993 "as an out-call prostitution business" of college-educated women with other jobs, the affidavit claims.
The women, all at least 22 years old, told investigators that Palfrey urged them to work for her at least three nights each week and charge their clients up to $300, according to the affidavit. It said the prostitutes would send half of their fee to Palfrey using money or postal orders, illegally laundering the money so it would be hard to trace.
Palfrey then deposited the money into at least five bank accounts, which paid for her mortgage, car lease and an estimated $136,000 worth of stocks, the affidavit claims. Investigators with the Internal Revenue Service seized $427,137 in money and stocks from the accounts on Oct. 3 with search warrants issued Sept. 29 by U.S. Magistrate Judge John M. Facciola.
The investigation, which began in June 2004, was conducted by the IRS and the U.S. Postal Service. Representatives for both agencies declined to comment Monday. Palfrey was convicted in 1991 for operating an illegal prostitution business in California and served 18 months in prison, according to the affidavit.
The sting was first reported Monday by the Web site The Smoking Gun, which said it tracked Palfrey down in Germany. According to the Web site, Palfrey said her employees did not participate in "illegal sexual activities." She said the business closed in August.