Prostitution Ad Agency Busted as Part of Sex Ring, Officials Say
ONE POLICE PLAZA — A massive criminal enterprise involving prostitution, drugs, money laundering and human trafficking was busted Tuesday — and it even had its own advertising agency, authorities said.
Nineteen people were arrested after a 16-month investigation uncovered a far-reaching scheme to funnel millions of dollars from prostitution and drug sales into an advertising agency, Somad Enterprises, Inc., which then used the money to create and buy ads promoting prostitution, Police Commissioner Raymond Kelly and Attorney General Eric Schneiderman said at a press conference Tuesday.
While making arrests on Tuesday morning, authorities found two women trafficking victims at locations in Manhattan and brought them to a safe haven, officials said.
The 180-count indictment charges Somad and 19 people with offenses including enterprise corruption, money laundering, falsifying business records, narcotics sales and prostitution, officials said. All 19 defendants face up to 8 and 1/3 to 25 years in prison if convicted.
“This was almost like the mob goes to business school,” said Schneiderman, who worked with city and state police along with U.S. Homeland Security on the investigation. “[Somad] would make ads, give you advice on how to place them, make videos for you for cable TV. They would do airbrushing and make recommendations for marketing.
"It was like a big advertising agency specializing in prostitution rings.”
Kelly and Schneiderman said that prostitution rings paid Somad more than $3 million over the past three years to promote their trade in publications such as the Village Voice and websites including backpage.com.
“They did so much business that they were receiving volume discounts from publications and websites that they were buying ads for,” Schneiderman said.
Authorities have also arrested three johns in the case, including David Mendelowitz, former guidance counselor and dean of students at Scarsdale High School, officials said.
Mendelowitz is accused of paying for prostitutes and crack cocaine, according to the criminal complaint.
During the same time span as the alleged crime, Mendelowitz was involved with Scarsdale High School’s Drug and Alcohol Task Force, the attorney general’s office said.
The investigation started when the New York State Attorney General's Organized Crime Task Force began looking into "backpage" advertising for prostitutes and followed the trail of cash back to Somad, officials said.
What started out as a money-laundering probe quickly turned into an investigation into prostitution and drug enterprises, officials said.
Schneiderman delivered a forceful message to any group hoping to emulate Somad.
“We will find you, and we will catch you,” he said.