Authorities Bust $7 Million Prostitution Ring

New York, NY – Authorities broke up a $7 million, three-state prostitution and money laundering ring on Tuesday. New York’s attorney general said that they rescued two human trafficking victims and arrested more than a dozen people.

According to NBC News, the bust was the result of a 16-month investigation into Somad Enterprises Inc. Attorney General Eric Schneiderman, and New York City Police Commissioner Ray Kelly said in a joint news conference that Somad Enterprises Inc. is an advertising agency with offices in New York, New Jersey, and Pennsylvania that placed classified ads for five escort services.

In a 180-count indictment, 19 people and one corporation were charged with enterprise corruption, money laundering, falsifying business records, narcotics sales, and prostitution. Each one of the charged faces up to 25 years in prison. Three clients of the prostitution ring have also been charged.

Schneiderman told reporters that Somad operated a “one-stop shopping vehicle for prostitution rings.” They created advertisements for escort services and placed them on cable access television, on websites like Craigslist and Backpage.com, and in newspapers like the Village Voice.

The agency also employed a webmaster who was tasked with promoting the ads so that they showed up more in Google and other online searches.

Schneiderman also said that some of the prostitution managers offered cocaine to clients in addition to sex. To conceal their transactions, Somad and the five escort services established multiple shell corporations with false information and disguised payments for sex and drugs as charges for acupuncture, antiques, or party planning.

Schneiderman said:

“This was almost like the ‘mob-goes-to-business-school’ kind of a situation. It essentially shows what you can do if you have a high level of creativity and a very low level of morality.”

Authorities said that Somad kept about half the $7 million in revenue that the prostitution ring earned in the past 2-1/2 years. The other half went to the escort groups that prostituted about 40 women at any given time, many from China and Korea.

According to the New York Police Department, 17 people people have been arrested in connection with running the prostitution ring and two of the indicted remain at large.