Forfeited money from an online prostitution enterprise foiled by federal authorities - some of the transactions occurring in Lycoming and Centre counties - has begun to be distributed to state police and Lycoming County District Attorney Eric R. Linhardt's office.
More than $3 million was distributed in forfeiture of an award of $4.9 million by the guilty parties, National A-1 Advertising Inc. and R.S. Duffy Inc., two Philadelphia corporations that were ordered to turn over funds after pleading guilty to conspiracy to commit money laundering, according to U.S. Attorney Peter J. Smith.
The Department of Justice has begun to distribute $3.2 million to the state police. Linhardt's office will receive $49,000. The distribution is for the contributions by staff provided to investigators that led to prosecution, Smith said.
Any law enforcement agency that directly participates in an investigation that results in a federal forfeiture may request an equitable share of the net proceeds, Smith said.
While Linhardt was not immediately available to comment, the plea agreement indicates that in November 2011, prosecutors charged the corporations with operating an Internet enterprise called Escorts.com, which provided access to interstate prostitution, including unmentioned locations locally. The corporations received subscription fees and credits, and wire transfers from users of Escorts.com throughout the nation, but the plea agreement does not specify where in the counties the transactions occurred.
Users paid a subscription fee to view the sexually explicit reviews of the escorts, and R.S. Duffy collected the money and transferred the funds to National A-1 Advertising, according to court documents.
Pursuant to a plea agreement, the corporations pleaded guilty to a money laundering conspiracy charge, Smith said.
Under the terms, the corporations agreed to the forfeiture of $4.9 million in cash derived from the unlawful activity, as well as the forfeiture of the domain name.
The companies pleaded before U.S. Middle District Judge Christopher C. Conner who rendered the judgments.
The prosecution of the case was handled by Assistant U.S. Attorney George J. Rocktashel.
Assistant U.S. Attorney James T. Clancy, chief of the office's Victim Rights and Asset Recovery Unit, and Assistant U.S. Attorney Amy C. Phillips handled the forfeiture.