Manhattan U.S. Attorney Announces Charges Against Massachusetts Businessman For Money Laundering, Financial Support For Manhattan Brothel
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Charles Brandeis, the Special Agent in Charge of the New York Field Office of the U.S. Department of State's Diplomatic Security Service (“DSS”), and Philip Bartlett, the Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced charges today against a Massachusetts businessman, DAVID STASIOR, for providing financing and financial advice to an illegal brothel operating in Manhattan, and conspiring with the brothel owner to use the proceeds from the brothel to promote the brothel’s activities. STASIOR was arrested by agents from DSS, the USPIS, and the U.S. Attorney’s Office for the Southern District of New York this morning and will be presented in federal court in Massachusetts later today.
This case arises from a multiple-year-long investigation in which 17 additional individuals have previously been charged with conspiracy to commit money laundering and conspiracy to violate the Travel Act. The previously charged individuals have included the owners of a network of at least 10 brothels in Manhattan, and individuals who provided advertising services for these brothels. These brothels were independently owned but worked cooperatively, and employed prostitutes who typically came to the United States from South Korea pursuant to fraudulently obtained visas or visa waivers. STASIOR allegedly provided financing for one of these brothels, whose owner was previously charged and pled guilty to money laundering conspiracy.
Acting U.S. Attorney Joon H. Kim stated: “For years, the defendant allegedly helped launder the proceeds of an illegal brothel operation in Manhattan, providing start-up money, ongoing financial advice, and record-keeping services. As alleged, the defendant financially supported and profited from this business that exploited vulnerable women and laundered money.”
Special Agent in Charge Charles Brandeis stated: “DSS continues to disrupt and dismantle transnational criminal organizations seeking to profit from the entry and illicit activities of vulnerable foreign nationals. This investigation demonstrates the global reach of the Diplomatic Security Service.”
Inspector in Charge Philip R. Bartlett stated: “This arrest represents the continued effort of law enforcement to put a stop to illegal activity wherever it is found. Many claim prostitution is the oldest profession in the world. The anonymity of the internet was used to hide the identity of its operators, keeping law enforcement in the dark. As in this case, what is done in the dark will always be revealed in the light.”
According to the Complaint:
Since 2012, DSS, USPIS, and the U.S. Attorney’s Office for the Southern District of New York have been investigating a group of brothels (the “Brothels”) operating in and around New York. Each of the Brothels was independently owned and operated, but the owners of the Brothels worked cooperatively through, among other things, the sharing of approved customer lists and information. STASIOR started out as a customer of the Brothels. In 2013, he provided a co-conspirator (“CC-1”) with financing to open a brothel (the “Brothel”), while requiring the co-conspirator to make periodic payments from the Brothel’s proceeds in return for his investment.
The Brothel used a website to advertise the women prostituted in the Brothel, as well as an online aggregator of advertisements to advertise the Brothel. The management of online advertising and payment for this advertising was coordinated by the defendant and CC-1, among others. STASIOR sent multiple emails to CC-1 in which he provided business advice to the Brothel, including advice on how to use online advertising for the Brothel to increase the Brothel’s profits. STASIOR’s emails included spreadsheets that listed him as a “Partner” in the business and itemized the Brothel’s prostitution revenues and the various expenses involved in running the Brothel, including the cost of advertising. In these emails, STASIOR also itemized the payments made to him out of the Brothel’s proceeds, and stated that he was concerned about the Brothel’s profitability to ensure that CC-1 would be able to “pay back” the “debt” that had been incurred by his investment in the Brothel.
STASIOR, 53, of Concord, Massachusetts, is charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and one count of conspiracy to violate the Travel Act, which carries a maximum sentence of five years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact the Victim/Witness Unit at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html
Mr. Kim praised the outstanding efforts of DSS, USPIS, and the criminal investigators working in the United States Attorney’s Office for the Southern District of New York. He added that the investigation is ongoing.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorneys Danielle R. Sassoon and Thane Rehn are in charge of the prosecution.
The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.