Law enforcement and escort NEWS

This is an attempt to keep up to date on law enforcement activities as we notice them.
If you have any tips, please let us know.

Multicity brothel network smashed

Posted on Tue, Aug. 06, 2002

Multicity brothel network smashed

Demise of 'Circuit' unveiled in Miami

BY LARRY LEBOWITZ

llebowitz@herald.com

Federal authorities in Miami on Monday announced the dismantling of a nationwide ring of high-priced brothels, loosely organized by entrepreneurial ex-prostitutes, that has been grossing millions of dollars in upscale neighborhoods for more than a decade.

''The Circuit'' operated brothels in Miami, New York, Los Angeles, Chicago, San Francisco, Phoenix, New Orleans, Pittsburgh, Philadelphia, Atlanta and Washington, according to a 13-defendant racketeering indictment unsealed Monday in Miami.

Veteran federal prosecutor Richard D. Gregorie described The Circuit as a classic business school model for economies of scale: By sharing the prostitutes, client lists and common business expenses such as travel, all of the brothels were able to increase the number and diversity of prostitutes available in each city -- and maximize the profits.

The prostitutes would charge $350 an hour for in-house customer calls at the local brothels and $400 an hour for out-of-house parties and assignations.

The women, some from as far away as Milan, Italy, were more like contract employees than streetwalkers, earning upwards of $10,000 a week in one city and then ''booking in'' with the madam in another city who might be in need of additional talent for an upcoming boat show, convention or sporting event.

The splits varied from brothel to brothel, but most women were paid 50 to 60 percent of their gross at the end of the week, and the balance stayed with the madam of the local brothel, sources said.

At those prices, no pimps were necessary. But by moving the women from city to city the madams were able to make sure that the workers weren't stealing away the best repeat clients, Gregorie said.

Several of the brothels, including one based in two penthouse apartments overlooking Biscayne Bay, were closed over the past six months after the FBI and local authorities conducted surveillance and wiretaps on several of the key figures.

OWNERS, OPERATORS

The indictment focuses primarily on the brothel owners and operators. Most of the prostitutes who testified before a Miami federal grand jury were granted immunity. Two prostitutes were indicted, but only because they helped the owners line up talent in one city to be available in another, Gregorie said.

Two South Florida defendants were arrested Monday morning after search warrants were served on one of the last operating brothels, in a high-rise apartment on North Wabash Avenue in the upscale Loop area of downtown Chicago.

Judy Y. Krueger, 58, and her paramour, Eli H. Tish, 70, are accused of running the Miami branch of The Circuit out of two $1,600-a-month suites at the Four Ambassadors Hotel at 801 S. Brickell Bay Drive. Krueger and Tish are each free on $50,000 bond.

Krueger and Tish have been secretly cooperating with authorities since the FBI and the criminal intelligence division of the Miami-Dade Police Department raided their home in March, records show.

Sources said Krueger is a former prostitute with a flair for business who decided she could make a lot more money owning the house rather than working for it. She could not be reached for comment late Monday.

The Miami clients would drive to the posh hotel, park their cars with the valets like any other guests and take the elevators to penthouse units 761 or 968. Sometimes the women left the Four Ambassadors to meet clients who were willing to pay the higher rates for liaisons at some of the most posh hotel and residential addresses in South Florida, authorities said.

During a 60-day period earlier this year, the FBI intercepted more than 14,000 phone calls -- 90 percent of which were related to The Circuit business -- at the home Krueger and Tish share in the 11300 block of Southwest 87th Terrace, according to an FBI affidavit. Krueger was particularly cautious. In one wiretapped call, she told a prostitute she never attended The Circuit's annual Christmas party, at the home of alleged Chicago madam Rose Laws, with the brothel owners and their best earners, because it might draw law enforcement. Laws and her daughter, Linda, were indicted Monday.

EMBARRASSING
The Miami raids proved particularly embarrassing to Coral Gables attorney Michael Murphy, who was charged last week with fraudulently billing his law firm clients $111,000 that was used to cover his personal tab at the Miami brothel.

Anticipating his arrest, Murphy voluntarily surrendered his Bar license and is cooperating with authorities, said defense attorney Neal Sonnett.

''He is incredibly ashamed by what has happened,'' Sonnett said Monday. ``All of his clients have been fully reimbursed, and he is trying to get help for a severe emotional problem at this time.''

Only one customer, alleged Chicago organized-crime figure and Miami Beach hotelier Michael Giorango, was named in the indictment. Giorango's last scrape with federal authorities occurred in the early 1990s when he pleaded guilty to his role in a multimillion dollar gambling ring.

Authorities captured Giorango on wiretaps with Krueger in January, arranging for several prostitutes to entertain him and his friends at a party he was hosting at The Lorraine Hotel, at 26th Street and Collins Avenue on South Beach. State records indicate Giorango is a director of the company that owns the hotel. He is expected to surrender to authorities in Illinois.

While Krueger and Tish were secretly cooperating in Florida, FBI agents in New Orleans caused a minor political uproar in March when they busted prostitutes and madams at The Circuit brothel in the Big Easy before the rest of the case was ready and several brothels could be shut down, Miami-based sources said.

The FBI office in New Orleans couldn't divulge, in great detail, the extent to which the bust was part of a larger nationwide scheme, leaving the FBI open to heaps of criticism in Louisiana and on Capitol Hill that it had plenty of better things to do in a post-Sept. 11 world than busting high-priced hookers.

CHANGE OF ROLE

Before her arrest in March, Krueger's friend, Anna Yeung, reportedly operated the New Orleans brothel. Yeung owned the Manhattan branch of The Circuit in the late 1980s and early 1990s but sold it in 1996 to textile businessman Scott Carlton, but she continued to operate it in an apartment above one of Carlton's factories on East 30th Street.

In addition to sexual partners, customers at the Manhattan brothel could order from a menu of sex-enhancing drugs, authorities said.