By William K. Rashbaum
April 8, 2004
Eighteen men and women were arrested yesterday on charges that they helped run a sophisticated prostitution ring that masked its operation behind a series of corporate fronts and escort services with names like Gentlemen's Delight, Day Dreams and Personal Touch, officials said.
Records that were seized in a search at the home of one of the ring leaders indicated that the operation brought in $1.6 million in nine months, a law enforcement official said.
Prosecutors from the State Organized Crime Task Force, working with the New York Police Department and the F.B.I., charged 16 people with enterprise corruption and two others with falsifying business records and promoting prostitution and money laundering.
Sign up for the New York Today Newsletter Each morning, get the latest on New York businesses, arts, sports, dining, style and more. Get it sent to your inbox.
About eight midlevel managers ran the ring, which operated 24 hours a day, 7 days a week, using about 15 to 20 drivers to dispatch 30 to 40 prostitutes each day, officials said. In most instances, customers paid $250 for sex, sometimes using credit cards. The transactions, officials said, were processed through merchant accounts held by escort services or limousine companies, and in one instance a company that hired musical bands for weddings.
''This was a sophisticated and lucrative operation with a multitiered management structure,'' the state attorney general, Eliot Spitzer, who oversees the task force, said in a statement. ''It was, however, nothing more than a prostitution ring, and now its owners and operators will be held accountable.''
Investigators with the task force came across the ring while looking into the activities of a Gambino crime family gambling operation, the law enforcement official said. They had wiretapped a Gambino-linked social club on Fingerboard Road in Staten Island as part of that inquiry and saw the prostitution ring's leader, Frank Farella, 44, of Staten Island, visiting at the club, the official said.
An indictment charging Mr. Farella and others with enterprise corruption identifies him as the owner and leader of the illegal enterprise, and John Pioppo, 42, of Staten Island, and Mario Galbo, 58, of Brooklyn, as senior managers responsible for day-to-day operations and overseeing the midlevel office supervisors.
Most of the defendants were arraigned yesterday in State Supreme Court on Staten Island before Justice Leonard P. Rienzi, who set bail for Mr. Farella at $400,000. He set bail for Mr. Pioppo at $80,000 and for Mr. Galbo at $40,000.
Mr. Farella's lawyer, VINCENT J. ROMANO, said he and his client knew about the investigation since the first search warrant in the investigation of the prostitution ring was executed in October 2002. But MR. ROMANO insisted that his client's businesses were lawful and that he was unaware that anyone who worked for him was exchanging sex for money. ''IT WAS A BUSINESS,'' MR. ROMANO said. IT WAS A LEGITIMATE BUSINESS.'' He said his client ''DIDN’T AUTHORIZE, FORCE, OR COERCE'' anyone to take part in any illegal activity. ''IF IT HAPPENED, MY CLIENT DIDN’T KNOW IT HAPPENED,'' the lawyer added.
The women were dispatched from storefront offices in Staten Island and from a Brooklyn apartment and would be dropped off by the limousine drivers, mostly in Brooklyn, Queens and Staten Island, the law enforcement official said. Two women would ride with each driver, and they would work 12-hour shifts, the official said. They carried a device inside the car to make an imprint of customers' credit cards, the official said.
At the end of the night, most of the drivers and the women would come together to settle up at a Dunkin' Donuts shop or a diner in Brooklyn, with as many as six of the cars parked outside as the credit-card receipts and cash were counted and the women were given their share of roughly one-third of the proceeds, the official said.