Escorts.com Operators Face Forfeiture, Fine

[gonzo]

Way to go Hot Movies!!!

HARRISBURG, Pa. — The operators of Escorts.com — National A-1 Advertising Inc. and R.S. Duffy Inc. — agreed to plead guilty to money laundering conspiracy, federal prosecutors announced Tuesday.

A plea agreement filed Tuesday at U.S. District Court in Williamsport, Pa., said the companies have agreed to forfeit nearly $5 million, pay a $1.5 million fine and serve 18 months probation.

The companies have forfeited the domain name Escorts.com, which they have operated for four years.

The case against Escorts.com appears to be the first successful prosecution against an online escort site.

HotMovies.com, which is owned by National A-1, is unaffected by the Escorts.com case. And Richard Cohen, who operates National A-1, has not been charged with any wrongdoing.

Prostitutes and escort services paid to advertise on the site, while customers were charged subscription fees.

Prosecutors said the two companies engaged in monetary transactions in excess of $10,000 which were derived from the allegedly unlawful activities.

http://www.xbiz.com/news/140338

[EmporerEJ]

Don't they have anything better to do with our tax dollars?

[gonzo]

Nice... pleading guilty to money laundering.

The Backpage case was quickly overshadowed by the above-referenced guilty plea by the corporate operators of Escorts.com. National A-1 Advertising and R.S. Duffy, Inc., the parent companies of Escorts.com since 2007, plead guilty to money laundering and criminal forfeiture charges arising from actions that allegedly “facilitated interstate prostitution activities.” According to U.S. Attorney Peter Smith, prostitutes and escort agencies paid to advertise on the site, while customers were charged subscription fees to view such advertisements. The revenue generated by the advertisements and subscription fees constituted the alleged proceeds of “violations of federal laws prohibiting interstate travel in aid of racketeering enterprises, specifically prostitution, and aiding and abetting such travel.” Upon the U.S. District Court’s approval of the settlement agreement, the companies agreed to serve a probation term of 18 months, pay a $1.5 million in fines, and forfeit the domain name www.Escorts.com, along with $4.9 million in cash derived from the alleged unlawful activities. Notably, although the settlement bans the government from bringing additional criminal charges against the companies and their other related business ventures (e.g. – Hotmovies.com and PrimeTel Communications), the agreement does not prohibit the IRS from pursuing any tax-related criminal charges arising from the money laundering. And although prosecutors have reserved the right to criminally pursue individuals associated with both companies, there is no indication that the government intends to pursue such an option. Despite all the ambiguities surrounding the legal fate of online escort directories, one thing is for sure, the pressure from law enforcement not only remains on these online media outlets but is apparently increasing. Legal compliance has never been more important and preventative maintenance is the key. Part II of this blog post will provide an overview of the current issues facing escort websites in light of the current legal environment, and preemptive measures for escort directories that could make all the difference should future litigation arise.

http://www.xbiz.com/articles/141193