Internet escort services firms charged with money laundering sentenced in federal court
The United States Attorney’s Office for the Middle District of Pennsylvania announced that Philadelphia-based corporations, R.S. Duffy, Inc. and National A-1 Advertising, Inc., were sentenced today in federal court in Williamsport before United States District Court Judge Christopher C. Conner.
Judge Conner sentenced the corporations to a term of 18 months’ probation and also imposed a $1.5 million fine and $800 special assessment pursuant to the terms of a plea agreement. In addition, Judge Conner ordered the criminal forfeiture of $4.9 million in cash derived from the unlawful activity, as well as forfeiture of the domain name, Escorts.com, all of which represent property used to facilitate the commission of the offenses.
On November 22, 2011, National A-1 Advertising and R.S. Duffy pleaded guilty to a money laundering conspiracy charged in a Criminal Information. Judge Conner deferred acceptance of the sentence recommended by the parties in the plea agreement pending a presentence investigation and report.
According to United States Attorney Peter J. Smith, the Information and the Government’s factual summary disclosed that the corporate defendants operated an Internet enterprise called Escorts.com which facilitated interstate prostitution activities. The defendants developed and operated an Internet web site, using the domain name Escorts.com, and created an on-line network for prostitutes, escort services, and others to advertise their illegal activities to consumers and users of those services.
The defendants received subscription fees and payments in the form of money orders, checks, credit card credits, and wire transfers from users of Escorts.com throughout the nation. The funds were the proceeds of violations of federal laws prohibiting interstate travel in aid of racketeering enterprises, specifically prostitution, and aiding and abetting such travel.
The money laundering conspiracy charge alleged that the defendants agreed to engage in monetary transactions of a value derived from those unlawful activities. The defendants created and maintained a network of Internet customer service accounts which facilitated and caused the transfer and movement of the proceeds of the unlawful activities from locations throughout the United States, including the Middle District of Pennsylvania, to the defendants’ business operations center at 106 South 7th Street in Philadelphia and to the defendants’ accounts at financial institutions, investment funds, and financial services providers.
The case was investigated by the Pennsylvania State Police, the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigations. Prosecution was conducted by Assistant United States Attorneys George J. Rocktashel, James T. Clancy, and Amy Phillips.
Mr. Smith noted that substantial assistance was provided by the United States Attorney’s Office for the Eastern District of Pennsylvania, Cybercrimes and Forfeiture Units, and the Philadelphia Police Department.
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