413047-Underground-Commercial-Sex-Economy

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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. 209
Changes in the Field The field doesn’t change, it just changes what’s hot and what’s not. Where the police are at changes. What the hot locations are, they change from time to time. And technology, the way you communicate changes. Other than that, everything stays the same. (G10) Researchers and law enforcement practitioners are interested in how pimps respond to fluctuations in the market and variations in law enforcement attention. Over half of this study’s respondents worked in the UCSE for at least one year prior to incarceration and thus provided reflections on how the market changed over the course of their involvement. Figure 7.4 shows the lengths of time respondents reported engaging in the underground commercial sex economy as pimps. Figure 7.4 Length of Time Worked Over the course of their involvement, respondents observed changes in the market demand, available methods of advertisement, and the demographics of both the individuals who participated as sex workers and the customers who purchased sex. Their perceptions are discussed below. Market Changes One thing about prostitution—when you can’t buy food, when you can’t eat, there’s one thing you can and will buy. It’s like gold, platinum. (D18) For the most part, respondents shared the sentiment that a high market demand for sex always exists: “<strong>Sex</strong> has always sold. Never been a shortage of people willing to pay for sex” (D10). However, some respondents observed changes in the market demand for sex over the course of their involvement. One female pimp who worked in multiple cities throughout the United States suggested an increase in the overall demand from 2004 to 2009: From 2004 to 2009, it definitely increased. Because we started advertising so much more, it probably increased by about 60 percent. And then from 2009 to 2010, it probable decreased by half of that, and guys weren’t spending so much money. I believe it was in part because of the economy and part [because] of the competition. Because a girl would go online. If they saw you posted for $200, they would charge $150. $50 might be a lot to that guy. (A8) 210
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R E S E A R C H R E P O R T M A R C
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Table of Contents Executive Summary
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Introduction and Review of the Lite
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Market Changes ....................
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Appendix G ........................
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Main Findings We highlight 17 main
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6. For offenders, the prevalence of
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Chapter 1 Introduction Purpose of t
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information about populations that
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In chapters three through eight, we
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seven sites were finalized in June
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individuals we wanted to interview.
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a total of 142 sex traffickers/pimp
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using interview data for the relati
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Table 2.2 Proxy Variables Dataset V
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Chapter 3 Methodology and Derivatio
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We also looked to estimates of the
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In this work, the LoCC will be invo
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1.2.1. Linear Proxy We say that a v
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Table 3.2 Number of Sex Proxy ( ) R
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direct estimation method applied to
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in column 3 of the table below. The
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1.2.4. Linear Proxy We followed the
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1.4. The Linear Program 1.4.1. Sex
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Table 3.12 Cross-City Sex Proxy Rat
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Note that the entries in the tables
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1.4.7. Techniques for Solving the L
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Where the above table shows actual
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1.6.3. Guns Economy Rankings Here w
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The table suggests that three citie
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Chapter 4 Stakeholder Perspectives
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Main Findings from this Chapter Inc
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Brothels Law enforcement reported t
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The other thing we do have is in th
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Dallas, Texas Fifteen individuals w
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Table 4.2. Continued Erotic massage
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that we’ve done because when we
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Although African American men compr
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I think what we are really talking
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actually go to them to find you wha
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Truckers The underground commercial
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Street and Internet Similar to othe
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Street/Internet-based pimps are net
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Figure 4.4 Erotic Massage Parlors i
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promising sign that law enforcement
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On the Latino brothel front we foun
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Street Street-based commercial sex
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majority of prostitutes. That does
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potential paper trail. Money was re
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Kansas City, Missouri Sixteen indiv
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Internet and Street Similar to what
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Pimps have always been mobile, movi
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San Diego, California Eighteen indi
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Street and Internet Similar to the
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are not documented by the police as
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always look for the most vulnerable
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hotels in their name … they have
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eliminated from having to follow a
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the room is, so it a three bedroom
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Street and Internet Seattle, like m
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Most of the gang members involved i
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Erotic Massage Parlors and Spas The
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getting a ticket in Lynnwood for no
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Table 4.8 Stakeholder Perceptions o
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need to be followed and pimps opera
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Erotic Massage Parlors Another prim
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typically between the ages of 16 an
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Chapter 5 Identity, Entry, and Risk
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Respondent Demographics Respondents
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presence of pimping in music and it
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Respondents distinguished between d
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Figure 5.5 Family Member Involvemen
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Multiple factors related to neighbo
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wanted me to know. She fed me the g
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mom. I wanted to go about it a diff
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Hiding Behind Legal Businesses Lega
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Another female interviewee, serving
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Chapter 6 Networks, Relationships,
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Actors in the Underground Sex Marke
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everything. I collected the money,
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they’ve made enough. That’s wha
Page 167 and 168: eally nice—not whorish—I’d ha
Page 169 and 170: Respondent: Right. I got a friend,
Page 171 and 172: affording a fancy lifestyle. Offend
Page 173 and 174: Figure 6.1 Recruitment Venues Neigh
Page 175 and 176: e escaping one life or seeking anot
Page 177 and 178: Mutual Dependency We are going to t
Page 179 and 180: money. I took care of who took care
Page 181 and 182: Rules One bad girl can knock your w
Page 183 and 184: Reasons for restrictions varied, bu
Page 185 and 186: encourage his employees to make mon
Page 187 and 188: have sex with each other when a con
Page 189 and 190: Competition Between Employees We ca
Page 191 and 192: little partner pull a gun on me. I
Page 193 and 194: Beyond employees, pimps shared othe
Page 195 and 196: pimp reported, “Usually you stay
Page 197 and 198: (D13). Another respondent reported
Page 199 and 200: Chapter 7 Business Practices and Op
Page 201 and 202: 7.1 presents the percentage of resp
Page 203 and 204: eported the costs of maintaining he
Page 205 and 206: hour special. In-calls only.” You
Page 207 and 208: used because respondents feared tha
Page 209 and 210: Rates and Pricing Structures Rates
Page 211 and 212: One respondent explained the evolut
Page 213 and 214: Finally, respondents also charged d
Page 215 and 216: transactions completed were in-call
Page 217: associated with their charges, thou
Page 221 and 222: “Years ago, a john, a certain guy
Page 223 and 224: connected through the same gang. Th
Page 225 and 226: Main Findings from this Chapter Inc
Page 227 and 228: clients, served as a coping mechani
Page 229 and 230: Respondents worked in five of the e
Page 231 and 232: gays being together, men treating t
Page 233 and 234: multitude of environments including
Page 235 and 236: Rates, Expenses, and Spending Those
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Page 239 and 240: The Makeup and Conditions of the St
Page 241 and 242: Interviewer: You mentioned that wha
Page 243 and 244: Interviewer: And was that in cash o
Page 245 and 246: Demand, Clients, and Establishing D
Page 247 and 248: new venue to solicit sex work. A mo
Page 249 and 250: Respondent: Yeah, illegal. They mak
Page 251 and 252: explained, “A lot of guys would g
Page 253 and 254: Substances Participants felt that t
Page 255 and 256: A number of sex workers were caught
Page 257 and 258: I hear [other sex workers] talking
Page 259 and 260: while another respondent described
Page 261 and 262: the genital regions of clothed chil
Page 263 and 264: Recent studies (Merdian et al. 2013
Page 265 and 266: Technology It is widely accepted th
Page 267 and 268: Deep Web There is big problem that
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One offender acknowledged that purc
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The sample was almost evenly split
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One offender believed he knew what
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particular series When did this com
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One guy hacked into my computer one
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Production Location When asked wher
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availability, affordability, and an
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and eventually, it works its way to
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Law enforcement said they were able
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A national or international nexus w
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Table 10.1 Estimates of Illicit Mar
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Law enforcement noted that travel c
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in public venues, utilized their ow
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Pimps who were aware of the penalti
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Practice Implications Investigative
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Policy Implications As the above fi
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Finding 6: For offenders, the preva
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child pornography. More research ne
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Cooper, Bo. 2002. “New Approach t
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McMillan, John, and Pablo Zoido. 20
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US Department of Justice. 2010. The
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Appendix B Screening Interview Ques
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1. How many UCS cases has your agen
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8. How has the UCSE changed in rece
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If you have any additional question
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18:2421 Transportation generally 18
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these case reviews as supplementing
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Point-person designation The person
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Voluntary Participation: You may re
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Part I: Background information 1. W
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Part II: Specific Case Questions (P
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a. If yes, how did you learn about
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Part I: Background information 46.
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70. Are there any differences in th
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89. Are you aware of the prosecutor
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19. Who did what How was that decid
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Technology Questions These question
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discuss new or unprosecuted crimina
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Voluntary Participation. You may re
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Appendix L Terminology Blade: A pub
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