- The Washington Times - Thursday, March 1, 2007

A California woman was indicted yesterday on federal charges she ran a multimillion dollar prostitution ring in the District.

Deborah J. Palfrey, who is considering selling customer records to pay for her legal defense, faces racketeering and money-laundering charges under a federal indictment issued yesterday in federal court in the District.

Prosecutors said Miss Palfrey ran Pamela Martin & Associates as a prostitution ring in the District from her home in California since 1993.

According to the indictment, the prostitution business involved 132 women who were hired primarily through local newspaper ads, with money split between the prostitutes and Miss Palfrey. She was paid through money orders sent to her California post office box, prosecutors said.

The indictment, which also accuses Miss Palfrey of arranging sex for money in Virginia and Maryland, occurred months after authorities seized Miss Palfrey’s bank accounts, stocks, real estate and gold coins in connection with the investigation.

Last fall, the U.S. Attorney’s Office filed court papers to seize Miss Palfrey’s assets. The civil forfeiture proceedings were ongoing.

The Washington Times first reported Feb. 21 that Miss Palfrey told federal authorities she would “make life miserable” for former customers and employees unless her case is dropped. The Times reported that government attorneys said Miss Palfrey had threatened to “harass potential witnesses whose identifies remain secret … through calculated public disclosures of former customers’ and former co-workers’ identities.”

On Wednesday, an attorney representing Miss Palfrey in the forfeiture proceedings said his client would sell customer records over the Internet to raise money for her legal defense.

Attorney Montgomery Blair Sibley said Miss Palfrey will be “selling selected records of Pamela Martin and Associates, which will include contact information on all of the ‘customers’ of the service — over 10,000 individuals — from its entire 13-year operational history.”

Last week, Mr. Sibley told The Times that Miss Palfrey did not intend to disclose former customers’ identities or to make “a circus” out of the case.

Yesterday, he said his client’s plan to sell records was “a last resort” to raise money for a legal defense.

Government attorneys have accused Miss Palfrey of threatening to use civil discovery to harass potential witnesses.

“Shockingly, claimant’s ‘civil’ counsel threatened further public embarrassment of former customers,” Assistant U.S. Attorney William R. Cowden stated in a court filing earlier this week in the forfeiture case.

In a recent e-mail to the U.S. Attorney’s Office, Miss Palfrey warned of repercussions if prosecutors did not drop her case.

“I cannot emphasize to you the terrible and quite unnecessary ramifications this [civil and/or criminal] case will set off, if permitted to advance for both sides,” Miss Palfrey wrote.

The indictment filed yesterday charges that Miss Palfrey placed ads seeking escorts in the Washington City Paper and the University of Maryland’s Diamondback student newspaper.

Authorities said Miss Palfrey hired women who were at least 22 years old and required that they mail her an application and photo before being employed.

The women also underwent a screening process in which they were required to engage in sexual activity without being paid to ensure that they were not law-enforcement officers, authorities said.

The prostitutes worked about three nights a week, charging as much as $300, authorities said. Half the money went to Miss Palfrey, who used the funds to pay for her mortgage, car lease and stocks, prosecutors said.

In civil proceedings, Miss Palfrey has denied any wrongdoing.

Mr. Sibley, in court records filed last month, said trying the case would require testimony and documents pertaining to 100 escorts and hundreds of customers.

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