Somad Enterprises – NYC Prostitution Ring ABC 7 – Human Trafficking – Money Laundering

NEW YORK (Reuters) – Authorities on Tuesday broke up a $7 million, threestate\nprostitution and money laundering ring, rescuing two human trafficking\nvictims and arresting more than a dozen people, New York’s attorney general\nsaid.\nThe crackdown was the result of a 16-month investigation into Somad\nEnterprises Inc., an advertising agency with offices in New York, New Jersey\nand Pennsylvania that placed classified ads for five escort services, Attorney\nGeneral Eric Schneiderman and New York City Police Commissioner Ray Kelly\nsaid at a joint news conference.\nIn a 180-count indictment, 19 people and one corporation were charged with\nenterprise corruption, money laundering, falsifying business records, narcotics\nsales and prostitution. Each faces up to 25 years in prison. In addition, three\nprostitution clients have been charged.\nSomad operated a “one-stop shopping vehicle for prostitution rings,”\nSchneiderman told reporters, creating advertisements for escort services and\nplacing them on cable access television, on websites like Craigslist and\nBackpage.com and in newspapers like the Village Voice.\nThe agency also employed a webmaster based in the Philippines who was\ntasked with promoting the ads so they appeared more prominently in Google\nand other online searches.\nSome of the prostitution managers offered cocaine to clients in addition to sex.\nTo conceal their transactions, Somad and the five escort services established\nmultiple shell corporations with false information and disguised payments for\nsex and drugs as charges for acupuncture, antiques, or party planning,\nSchneiderman said.\n”This was almost like the ‘Mob Goes to Business School’ kind of a situation,”\nSchneiderman told reporters. “It essentially shows what you can do if you have\na high level of creativity and a very low level of morality.”\nAuthorities said Somad kept about half the $7 million in revenue the ring earned\nin the past 2-1/2 years with the other half going to the escort groups that\nprostituted about 40 women at any given time, many from China and Korea. In\nbreaking up the ring, authorities rescued two women who were victims of\nhuman trafficking, one of whom was from Korea, Schneiderman said.\nSo far, 17 people have been arrested in connection with running the\nprostitution ring. In addition, police arrested three prostitution clients, including\nthe former dean of students at well-respected Scarsdale High School, David\nMendelowitz, Schneiderman said.\nMendelowitz, who served on the suburban New York school’s drug task force,\nwas charged with patronizing a prostitute, possession of crack cocaine and\nhindering prosecution.\nTwo of the 19 people indicted remain at large, the New York Police Department\nsaid.\nCalls to Somad went unanswered, and calls to Mendelowitz and his attorney\nwere not immediately returned.\n(Editing by Barbara Goldberg, Bill Trott