CONVICTION IN VIOLATION OF TRAVEL ACT TRIAL

Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; Michael S. Clemens, Acting Special Agent in Charge of the Miami Division of the Federal Bureau of Investigation; Carlos Alvarez, Chief of the Miami-Dade Police Department; Ken Jenne, Sheriff of the Broward County Sheriff’s Office; and Brian J. Wimpling, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation, announced today that on January 8, 2004, a federal jury convicted Michael Giorango of violating the Travel Act. Giorango faces a maximum statutory penalty of five years’ imprisonment, a $250,000 fine, and up to three years’ supervised release. Sentencing is scheduled for May 7, 2004, before United States District Judge Adalberto Jordan.

Giorango was the last defendant in a 13-defendant indictment targeting the “Circuit,” a nationwide network of prostitution brothels. Brothel owners or operators in five United States cities were indicted for conspiring to violate the RICO act, in addition to the Travel Act, Mann Act, money laundering, and drug distribution charges. Prostitutes who traveled in interstate commerce to recruit new prostitutes or otherwise promote the Circuit were also named in the indictment.

Giorango was not a brothel owner or operator, but was found to be a promoter of Judy Krueger’s Miami prostitution business. Almost 30 telephone conversations between Krueger and Giorango were intercepted during a 60-day court-authorized wiretap of Krueger’s telephone. In those conversations, Giorango was overheard arranging visits between Krueger’s prostitutes and Giorango’s Chicago friends at his Miami Beach hotel.

On one occasion, Giorango hired five prostitutes to attend a party at his hotel, and subsequently hired individual prostitutes to meet other friends at the hotel or at the apartments leased by Krueger for the prostitution activity. Giorango, who had known Krueger and utilized Krueger’s prostitutes for several years, paid for all of the prostitution services.

Although Giorango was the only brothel customer charged, nine of the brothel owner/operators were charged with conspiring to violate the RICO statute through a pattern of racketeering activities. In the indictment, the defendants were described as members of a nationwide joint venture, who associated together for the purpose of making money through prostitution and, at some brothels, drug distribution to clients. The owners and their employees operated brothels that shared the services of prostitutes, both American and foreign, who traveled from one brothel to the next for short stays. The prostitutes typically earned between $350 to $400 for each hour spent with their customers. Prostitutes performed both “in-call” and “out-call,” meaning they provided sexual services at the brothel or at the client’s home or hotel room. The brothel operators kept 40 to 50 percent of the prostitutes’ earnings. In addition, the prostitutes paid approximately $350 to $400 per week to stay in apartments maintained by the brothel operators. Typically the women stayed five to ten days at a brothel and then circulated to a new brothel in a different state. The conspirators, who spoke frequently to discuss individual prostitutes and clients, subsequently used proceeds from the brothel operations to pay themselves and to cover expenses of the brothel.

Mr. Jiménez commended the investigative efforts of the Internal Revenue Service, the Federal Bureau of Investigation, the United States Marshals Service, and local law enforcement task force members from the Broward County Sheriff’s Office and Miami-Dade Police Department. The case is being prosecuted by Assistant United States Attorney Scott Ray and Senior Litigation Counsel Richard Gregorie.