Nationwide Internet prostitution ring linked to the Valley
Reported by: Katrina Wessman
Email: [email protected]
Last Update: 5:28 pm
The Phoenix Police Department made the first arrests Monday in the investigation of a nationwide prostitution ring with links to the Valley.
On July 24th, a Maricopa County grand jury handed up a 17-count indictment naming 55 defendants.
On August 4th and 5th, police began making a series of arrests.
According to investigators, this is the largest prostitution organization uncovered in Arizona.
Officers said they first received a tip of a prostitution business in August 2007 and discovered an organization, run by Paul Nichta, called “Night Entertainment Partners”.
Nichta allegedly made bank deposits of $250,000 a month using a series of escort service businesses as a front for prostitution. Those businesses include:
• Desert Divas LLC
• Night Partners Entertainment
• NPE Management Services
• Hips Touring LLC
• Escorts in Action
• AZ Confidential
• Desert Divas New Mexico
According to Phoenix police, most of the companies were registered with the City of Phoenix or the Arizona Corporation Commission.
The operation also included a pornographic website which showed “Escort Reviews.”
Officers say Nichta would hold “meet and greets” at Valley restaurants every week so that prospective customers could meet the escorts in person.
Nichta recruited the escorts through ads in the New Times and websites promising escorts incomes of up to $30,000 a month, according to officials.
Two former escorts told police they made about $2,000 a night but could also earn an additional $15,000 a night in tips.
More than 100 people, mostly prostitutes, are believed to be involved in the ring.
The organization filmed pornographic acts with the prostitutes, according to the investigators, and made them available for viewing through the Internet to hundreds of customers, or “johns”, who ordered the service through their various websites.
The investigation has connections to Philadelphia and Albuquerque, however the majority of the organization’s activities were conducted in the Valley.
Philadelphia detectives arrested one suspect in this case.
Albuquerque detectives conducted a search warrant on the organization’s office, “Desert Divas New Mexico”, in Albuquerque on Sunday and arrested numerous suspects, including 41-year-old James Bays.
Nine search warrants were conducted throughout the Valley on Monday, according to authorities. Three residences were seized, at least eight vehicles and one motorcycle were taken, and financial seizures were made.
Six rifles, 12 handguns, and two silencers were taken from Nichta’s Paradise Valley residence.
Some of the prostitutes have also been arrested and more arrests are expected in the weeks to come.
Officials say there are 'big names' linked to the ring, but those names have not yet been released.
Nine of the top members of the organization have already been arrested and face charges of conspiracy to control an illegal enterprise, illegal control of an enterprise, money laundering, operating a house of prostitution, employee at a house of prostitution, pandering, receiving the earnings of a prostitute, use of a wire or electronic communication, and prostitution.
The nine key suspects arrested include:
Paul Nichta, 32, Scott Eder, 35, Peter Shifman, 56, Billi Mayfield, 19, Adam Beech, 25, Charles Sanders, 29, Louis Sterling, 55, William Ferretti, 65, and Chloe Magouliotis, 23.
The following residences were included in Monday's seizures:
6839 E. Sunnyvale, Paradise Valley
4043 E. Woodstock Road, Cave Creek
3003 E. Camellia Drive, Gilbert
The following vehicles were among those seized in Monday:
2007 Ferrari 43C CP
2006 Lotus EXI CP
2008 Mercedes SL55 RD
2007 Chevy Tahoe 4DSW
2004 Chevy Avalanche 12 PU
2008 BMW
2005 Hummer SUT
2007 Triumph motorcycle
The Phoenix Police Department said they worked with the Maricopa County Attorney’s Office, the Scottsdale Police Department, the Maricopa County Sheriff’s Office, the Mesa Police Department, the Philadelphia Police Department’s Vice Unit, and the Albuquerque Police Department’s Vice unit during this investigation.
When addressing this investigation on Tuesday, County Attorney Andrew Thomas stated, “Our office will work to protect the citizens and neighborhoods of this county from criminal exploitation. We appreciate the excellent work of the Phoenix police detectives who investigated these offenses.”
Phoenix Mayor Phil Gordon said, “These are not victimless crimes. On the most basic level, those involved in prostitution, and the family members who love them, are neglected or worse. And the money generated from these illegal ventures helps fund other criminal enterprises such as drug and smuggling operations. This is a good use of resources and I thank the County Attorney and the Phoenix Police Department for working together to make this a better community.”
Phoenix Police Chief Jack Harris stated, “I would like to commend the men and women of the Vice Enforcement Unit of the Phoenix Police Department, as well as the other agencies that have assisted us, for the many hours they have spent and will spend during the course of this investigation. This investigation successfully targeted a large scale, sophisticated organization dealing in prostitution and pornography, which are often referred to as “victimless crimes”. However, our experience has shown us that these crimes have far reaching consequences on our community. That is why the Phoenix Police Department is committed to fighting these types of crimes.”
How far would LE go to prosecute people who have used this service? They said they are going to prosecute all of them and that there are "thousands" of names. Who should be worried and what can those guys do if they are contacted?
I have a hunch that they are saying that they plan to prosecute clients only to send a scare out to everyone in order to try and diminish business.
Other than that, it is very rare for a person to get prosecuted who is not caught in the act; former governor Spitzer being a notable exception, but he left a paper trail a mile long.
If your only trail is a phone call, some personal info and some cash, that is not an easy or cheap case to prosecute for a $50 fine.
They may try to hit up some guys to become witnesses to make their prosecution of the owners easier however.
Just remember, you have no obligation to give out anything more than your name and address. Stick to that and most likely LE will lose interest in you. If you squeel, you might end up with a "deal" that will leave you with a record or more, and you don't want that.
Regarding lying: Remember Martha Stewart? She thought that she had done something wrong by going along with her stock broker's advice to sell some stock based on inside information. She did not break the law however. The stockbroker did, but not her. What she did do was lie to the police by try and concocting a plausible story to explain why she sold the stock. She got tripped up on that and sent to jail for several months. There is no reason to ever lie when all you have to do is say nothing.
(still not a lawyer)
Martha Stewart most definitely broke the law regarding trading on inside information. This sort of thing is prosecuted constantly by FINRA and entails buying or selling securities based on information that is not public. Whether the news is both good or bad, if hasnt been made public, you cant use it.
Add to that, the fact that Martha had been a very successful stockbroker in NYC with Dean Witter. This fact sort of blew her "I didint know you couldnt do that!" defense, not that it would have made a difference.
People in and out of the securities business are prosecuted regularly for this type of infraction. The penalties are servere, and ignorance of the statue just dosent matter.
If anyone thinks they may be in this situation legal counsel should be consulted.
Hope I didnt ruin anyones' day with this!
stockbrokers do not face penalties for insider trading was an article on MSN/NBC financial page shortly after Martha was convicted.
In fact, if you followed the trial, you would see that the charges against her were for the false statements she made to the police, not for insider trading. Her stockbroker, who cooperated to get Martha convicted, ended up facing charges for the insider trading.
still not a lawyer
-- Modified on 8/6/2008 12:51:17 PM
Customers of stock brokers are liable for inside trading that violates the securities laws. Indeed, liability extends both to tippers and tippees who knowingly trade on inside information.
As to Swede's comment, Martha may well have broken insider trading laws –although she claimed she had a sell order in place with her broker - but she was neither indicted in the superceding indictment for insider trading nor convicted of insider trading.
She was found guilty of conspiracy, concealing material information from and making false statements to government officials, and obstructing an agency proceeding. She was acquitted of securities fraud. So Mr. Fisher is correct on this point.
Martha Stewart was never charged with criminal insider trading. She was found guilty on all four criminal counts that she was charged with.
I am not a lawyer, but I believe that she was not "acquitted" of criminal securities fraud because she was never charged with that. Please correct me if I am wrong.
She was charged by the SEC with civil insider trading. She agreed to pay a fine of $195,000 and agree to not serve as a director of a public company for 5 years to settle the civil charges.
“Martha Stewart was never charged with criminal insider trading.”
Correct as far as the superseding indictment is concerned, as I stated in the post. I don’t remember the original indictment and it is irrelevant given the superseding one.
“She was found guilty on all four criminal counts that she was charged with.” Correct that she was convicted on the counts listed in my post. U.S. v. STEWART, 433 F.3d 273 (2nd Cir. 2006)
“I am not a lawyer, but I believe that she was not "acquitted" of criminal securities fraud because she was never charged with that. Please correct me if I am wrong.”
You are wrong. U.S. v. STEWART, 433 F.3d 273 (2nd Cir. 2006)
(“At the close of evidence, pursuant to Fed.R.Crim.P. 29, the District Court granted Stewart's motion for judgment of acquittal as to Count Nine”). This was the securities fraud count.
“She was charged by the SEC with civil insider trading. She agreed to pay a fine of $195,000 and agree to not serve as a director of a public company for 5 years to settle the civil charges.”
Sounds right from memory but I have not looked at the admin charges and was addressing only the criminal charges.
if your stock broker gives you a tip based on inside info but you are not aware it is inside info, you are not liable/guilty of a crime. The SEC has tried unsuccessfully to make this arguement; but if you think its just a tip based on the brokerage firm's analysis of the stock, you are not guilty of a crime and do not have to disgorge profits. But if you know its inside info, then its like receiving stolen property.
It's kind of like being in a tax audit. Only answer questions they ask; don't lie, but don't volunteer anything, because once you do that, it leads to more questions. The more you talk, the deeper hole you dig for yourself. Oh yes, did I mentioned "don't lie?" If I didn't, then "don't lie."
jhb
The ONLY thing you should say is "I WANT A LAWYERand NO I don't understand my rights"... once you DO say that, they MUST stop questioning you. They will lose interest fast.
Name, rank, serial number!
MVR
I had one visit with an AZC girl 3 months ago, I paid in cash, and I live out of state.
Should I retain an attorney just in case.
I'm not a lawyer, but given the circumstances, it might not be a bad idea to talk to one, if for no other reason than to put your mind at ease.
jhb
No law enforcement agency is going to bother with you. At worst you may have committed a misdemeanor (soliciting?) but they have nothing to go on. As I have always understood it, only a person who actually witnessed a misdemeanor may make a misdemeanor arrest. No paper trail, misdeanor crime at best, relax. Nothing is coming your way.
Not a lawyer either, but I'm pretty sure of this one.
MVR
They listed the office, the incall apts, some other houses of the people busted. But the biggest thing is they do NOT have everyone. 55 warrants issued and 32 arrested. It shows all the mug shots of those busted so far.
Check out the comments AFTER the article that is where someone who is obviously very close to the situation posted details.