413047-Underground-Commercial-Sex-Economy

Laundering Money through Legal Businesses
While most respondents did not maintain legal
business structures, business licenses opened up new
opportunities to launder and store money earned in
the UCSE. Cash-based legal structures made it easier
for respondents to conceal suspicious earnings. A
respondent who ran a massage parlor explained that
“You can’t tax the massage parlor. If I make
$100,000, I report $20,000. Your records go by how
you write them. You don’t do receipts until the end
of the night. I would tally what I thought I made at
the end of the night, not what I actually made” (D3).
Despite the benefits, respondents also reported basic
business challenges to laundering money through a
legal business. One respondent who ran an escort
service explained that escort service fees that were
paid via credit card had to be concealed in order for
credit card companies to approve them: “The thing
about the credit card is that most companies won’t
give you a credit cards for an escort service, so they
would be billed as a cleaning service—Elite Cleaning
Service—or something like that” (A8). In addition to
a providing a cover for credit card companies,
respondents noted that being billed as a cleaning
service also decreased the likelihood that the
customer’s wife or girlfriend would become
suspicious.
choice: “I had a couple of bank accounts, but it’s not like I
had a certain one because it’s preferred by pimps …
Capital P on it or something. I did use Bank of America
because they’re everywhere” (D8).
Other pimps intentionally avoided formal accounting
because it produced a paper trail of their criminal
enterprise. One female respondent who worked with a
pimp partner explained, “There was no managing of
money. We each got each other’s cut. Paperwork is bad. I
did not use banks. I kept the money at home in a locked
box” (F1). Another female offender who worked as a
bottom explained that her pimp “got in some trouble in
DC and he stopped keeping track, because he didn’t want
it getting [linked] back to his computer” (D21).
Pimps sometimes sought methods to hide their money
rather than storing it in traditional bank accounts. There
were clear reasons for pimps to avoid banks: “Because
they are going to wonder why and how I got all this
money” (D7). Another respondent agreed: “You can’t
explain to someone why you are depositing thirty grand in
two days’ time; I learned that from the drug game” (A7).
Other respondents started out using bank accounts, but
stopped banking to avoid producing evidence that could
incriminate them. A respondent explained, “I stopped
messing with banks. Friends said it is cool to have a bank,
but then it’s just a paper trail” (E3).
Pimps employed other methods to conceal earnings. Over
one quarter of respondents (30 percent) reported the use
of prepaid credit cards to store cash, pay bills, and move
money around quickly. For respondents who did not
maintain credit cards or bank accounts, prepaid credit cards were essential to running a business. A
respondent explained, “You have to have one of those Green Dot cards to do general business in society. I
did have a Green Dot card, a prepaid card; you just have to have one of those” (H1). Another respondent
reported, I used [Green Dot cards] for quick bill pays … I kept cash, but as far as the card usage, I just kept
a couple dollars on the card so I didn’t have a lot of cash on me at any time” (G1). Prepaid cards also
helped pimps secure themselves against theft: “I’ve used prepaid credit cards. You don’t want to get
robbed. I might have three or four cards with $3,000–4,000 each” (D8).
Finally, family members played an important role in hiding and saving money for some respondents. A
respondent explained, “Every time I get $1,000, I drop it off to someone in my family who is working a
real job” (B3). One pimp reported hiding money in his grandmother’s basement, while another
respondent stored his money in a room he rented at his friend’s home: “I stacked my money in my
honeycomb hide out. It was a duplex. It was my homeboy’s house, it was his extra room. No illegal activity
… Go there and chill … I kept my money, clothes, and personal items there” (B5). A respondent with
family abroad wired money to his relatives, but controlled the amount to avoid suspicion: “I would send
the money back to [home country] by Western Union. I would send $1,800 at a time, otherwise people
would question the money. I would send money to my family every third day by Western Union. I would
keep the rest of the money on myself or in the car” (G5).
The final section of this chapter explores the changes within the UCSE observed by respondents over the
course of their involvement.
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