Tessa knew this already, but nodded and took notes.
“Then there’s the fact that these are cash businesses. That makes it possible for the Mafia families to collect tributes without leaving an accounting trail. And, of course, there’s the whole money laundering angle.”
“Is that what you think is going on at Club Red?” Tessa asked.
“We hadn’t found any evidence of that on a large scale by the time I left, which was puzzling.”
“How so?” Luke asked.
“If they were laundering money at Club Red, it would prove to us that the Ianelli Family is involved in operations there, because that’s the new focus of the LA branch of the family. But so far, nothing. At this point, we have to wonder what the Family would be getting from a possible relationship with Club Red.”
“What kind of revenues are we talking about?” Tessa asked.
“That’s tough to estimate,” McKeltie said. “We have a hard time proving where the illegal profits are coming from, and where they’re being hidden, because Club Red is a cash-based business. Ricky Hedges could be hiding all his profits in a secret stash somewhere. Or it could be in banks in Switzerland or the Caymans. We just don’t know at this point.”
“And you won’t until he tries to spend it, either as an individual or a corporation,” Luke said.
“Yes. That’s why we were looking for evidence of money laundering—it’s the only thing that would explain where the profits are going. So far, we’ve got nothing. No evidence of illegal profits, yet no evidence that he’s laundering profits, either. It’s a conundrum.”
“Could that be because there are no illegal profits on a large scale?” Tessa asked.
“That’s a possibility,” McKeltie admitted. “If that’s true, though, then the lack of capacity to absorb illegal profits is going to be a liability that holds back the growth of the Club Red empire.”
“Has anyone looked at the Ianellis in depth?” Tessa asked. “For example, if they are looking around for a business partner to launder their drug profits, wouldn’t that imply that Club Red isn’t willing or able to provide this service?”
McKeltie flipped through the file. “I hadn’t looked at it like that,” he said. “We’ve been looking for outflow from Club Red. But as far as I know the Ianellis are always eager for someone to launder their money, and Club Red falls in their turf. They aren’t major players in California organized crime, and their volume is small enough that the other clans like the Russians and Chinese just leave them alone as long as they stick to their territory.”
“So if Club Red isn’t laundering money, and isn’t hiding illegal funds anywhere you guys have found, where do their profits come from?” Tessa asked.
“Aside from the nightclub revenues, so far it looks like smart and legal investments. We’ve pulled the club’s financial records for the last few years, and our team hasn’t found anything out of order.” McKeltie pulled a thick packet of paper out of his file. “I’ll admit, however, that by the time I left no one with a background in accounting had looked over the stuff. I think that’s in the budget for the next quarter, though.”
“Why has it taken so long to look over the books?” Luke asked. “No offense, but that seems like a first step.”
“It is. But you have to understand the challenges we at the FBI have faced since September 11. We’ve had our resources—which were always tight—reassigned on critical national security and antiterrorism projects. How do you argue for funds to go after a nightclub and small-time organized crime family operating in the Southwestern US when you have critical budget shortfalls and terrorists living inside the US? Cases have to be prioritized. To be honest, this investigation into Club Red has ended up simmering on the back burner for the last eighteen months.”
“Until it starts to boil over,” Tessa murmured.
“Exactly. It’s called brushfire management—nothing gets dealt with unless it’s a huge wildfire. Consequently, a lot of little fires get overlooked. Some die out, while others keep growing until one day they’re raging out of control,” Luke said.
Agent Beals spoke up. “That’s one of the reasons it’s so difficult for my division to get funds and manpower. Let’s face it—illegal prostitution just isn’t a high-level national security issue.”
“I know. It was one of the most frustrating things I dealt with at the sheriff’s department.” Luke glanced over at Tessa, who seemed to be lost in thought. He raised an eyebrow at her when she looked up.
“Would it be possible for me to see the financial records?” Tessa asked. “Maybe even keep a copy? I’m sure I won’t find anything, but it would be such a great learning experience for me.”
Butter wouldn’t melt in her mouth, Luke thought.
And the FBI just handed the papers over, confident that Deputy District Attorney Jacobi wouldn’t be able to find anything that would make them look bad.
“I’ll have a copy made before you leave. They’re public records, really, but I’m sure you’ll be discreet with them,” McKeltie said.
“Absolutely. Would you explain some of the terms?” Tessa asked.
As McKeltie spoke, Luke pulled his chair closer to Tessa’s, and they both flipped through the financial records for Club Red, Inc. He saw Tessa focus on the company’s declared assets and expenses, especially deductible ones.
“It looks like Ricky Hedges is quite the real estate entrepreneur,” she said slowly. “He’s made a lot of land purchases in the LA metro area. Is this a deduction on interest here?”
McKeltie nodded. “Real estate is a pretty standard way for these guys to gain respectability. They want to be able to put something like ‘property developer’ in the occupation section of their tax returns.”
Tessa met Luke’s eyes, and he could practically hear her brain processing the new information. He turned to the agents in order to buy her more time.
“What else do you have on Club Red and its operations?” Luke asked.
McKeltie watched Tessa devour the financial information. “I can’t share much more than what you have. I was pulled from the case two months ago to head up another investigation, so I don’t know what the team has done since then. Do you two have anything that can help us?”
Tessa looked up and shook her head. “We’re not looking at any charges this serious. The FBI’s case is much bigger than ours. Right now we’re investigating an allegation of sexual assault, as well as forced prostitution. We’re not sure if the victim is a minor or not, or whether she’s actually a willing participant. It was only while we were investigating these charges that we realized some other things were going on at Club Red, where the victim in question was employed.”
“Didn’t you say on the phone that there was a high-profile element to your case?” McKeltie asked.
“The allegation of sexual assault has been made against Sledge Aiken, who is a professional football player. But so far, we haven’t turned up any real evidence to link the guy to Club Red, the Ianellis, or any criminal activity beyond the initial allegation,” Tessa said. “It’s been very frustrating. We can’t even prove an improper relationship with him and the victim beyond a reasonable doubt.”
Agent Beals spoke up for the first time. “If there is a prostitution or pandering operation set up, this athlete probably has nothing to do with it beyond being a client.”
“Can you tell me more about how these setups work?” Tessa asked. “I’ve been trying to understand how they are able to attract intelligent, pretty, middle-class girls into a life of prostitution. It just doesn’t make sense.”
“Usually the prostitution is the end stage in a fairly elaborate chain. I take it you want to focus on teenage prostitution?”
Tessa nodded. “Yes, the victim told us she was eighteen. We’ve recently been wondering if she might even be a minor. She came to California in search of a recording contract.”
Beals shook her head tiredly. “Recording contract, acting career, modeling—it d
oesn’t matter what these girls say they want. The fact that they want to break into an industry that requires connections and thrives on exploitation makes them vulnerable.”
“But where do they come from?” Tessa wanted to know. “Were their lives so terrible that they had to run away to the West Coast?”
“Some of them, yes. But most are simply middle-class teenagers from the Midwest, usually small towns. They have stars in their eyes, they’re ambitious, and they come to big cities like L.A. and New York without the social support structures that would help keep them safe. They’re basically waiting to be victimized.”
“I’ve heard about kidnappings and teenage prostitution in India, Asia, and Africa,” Tessa said. “But we’re talking about California, here. In the twenty-first century.”
“I know it’s difficult to believe,” Beals said. “But there’s actually an organized network to scoop these girls up at the arrival points like bus and train stations, and get them hooked up with other girls their age who are also part of the scam. Then the pimp steps in, provides a loan or a job, and the new girl is indebted. When you add the possibility of meeting important people, or the pimp’s promise to help further whatever showbiz career the girl is interested in, the trap is sprung.”
“Isn’t there any way out? Why can’t girls like Kelly just go home once they realize what’s really going on?” Tessa’s frustration came through in her voice, and Luke put a hand on her leg under the table, letting her know with a gentle squeeze that he was there.
“Because they usually owe their pimp too much. It’s basically indentured servitude. If that isn’t enough to keep the girl, the pimp will often steal her identification and money. And most of the pimps have no problem with using gang rape, violence, and threats against friends and family members to keep particularly difficult girls in line.”
“My God, what kind of people are these pimps?”
“They come in all shapes and sizes,” said Beals. “Some are better than others. I’m just giving you an overview of what we’ve encountered while working with victims of teenage prostitution rings. Most of them are young, pretty girls from the farm belt. They’re in high demand in the sex trade because of their fair complexions and good manners. On the street they’re called Thoroughbreds. And since many of them come from middle-class families who have no exposure to this kind of life, it’s that much easier to manipulate and humiliate the girls into staying.”
“Because once they’ve been bought and sold, they can’t go back to their old lives?” Luke asked.
“No, often they can’t. The stigma is very real. Rehabilitating teenage prostitutes is one of the most difficult obstacles to breaking up these rings—really, what are the girls going to do with themselves once we close down the operations and arrest the pimps? They are usually high school dropouts and are candidates only for the most menial of jobs. Frankly, they make good money turning tricks.”
“You can’t tell me they stay in it for the money,” Tessa said fiercely.
“No, they stay in the business for a number of reasons. A lack of other opportunities, psychological and physical abuse, low self-esteem, and the lack of legitimate work or the education record needed to get decent-paying jobs. Let’s be honest, Ms. Jacobi. These girls aren’t going to make rent and support themselves in Hollywood by working at Mc-Donald’s. But if they are young and pretty enough, they can make hundreds of dollars a day—tax-free—by turning tricks. It is the single most difficult problem to overcome in getting people out of the sex trade.”
“How do we go from there to organized prostitution like we suspect in Club Red?” Luke asked when it was clear Tessa didn’t have a response.
“The clubs need a constant supply of young, attractive girls who are willing to sell their bodies for money. This includes stripping, being escorts or eye candy, prostitution, whatever level the particular girls are comfortable with and the customers demand.”
“It was my experience that girls sometimes started with stripping, but as they got more jaded they became less reluctant to do the other things. Kind of like a domino effect,” Luke said.
“It can be, yes. And our psychologists believe that the erosion of the girls’ self-esteem contributes to this process as well. A high-end place like Club Red has a very exclusive clientele, and it would attract the most ambitious of the girls in the trade. It’s actually a street girl’s dream because there might actually be a chance of meeting someone who can get her into a movie or something. If not, the clients are still big spenders, and the girls can maintain the fantasy that they are somehow better than street prostitutes.”
“But would a place like Club Red actually lure girls off the streets and from bus stations in the way you’ve described?” Tessa asked.
“Depends on the operation, but I would think yes. They might pretty up the basic transactions, or equate the whole thing to a girl doing favors for important men in order to get favors in return. But at the core we are talking about prostitution and the commercialization of young women.”
Tessa turned back to McKeltie. “Was the task force looking into anything like this before you left?”
“No,” he said. “We knew we were looking at prostitution and pimping, but had no information that any of the girls were minors. Or that they might be less-than-willing participants. Of course, we knew there were strippers there, but contrary to popular opinion, not all strippers are prostitutes. Most are just making a living.”
“Maybe Kelly’s case is a onetime thing, then.” Tessa shut her notebook. “We should know for sure soon enough.”
“Can I give you a piece of advice, Ms. Jacobi?” McKeltie hesitated.
“Sure, I’m always open to tips.”
“Tread very lightly. The LA nightclub world is very small and incestuous. If you’re asking around, someone is going to hear about it and let Ricky Hedges know. That’s one of the things that initially hamstrung the investigation when I was on the team. We had to be careful about getting information discreetly. We were restricted to dealing with outsiders and paid informants, and that made it very slow going. Similar investigations into clubs elsewhere have gone on for years.”
“But we’ve been asking questions freely, talking to several individuals who are involved in Club Red operations at varying levels,” Tessa said.
“That’s my point. You might want to step back a little, or you could find yourself in the line of fire. These people that you’re dealing with might seem like small-time criminals, but they have just as much interest in protecting their business as the major crime syndicates. That makes them very dangerous.”
“I doubt they’d do anything drastic over a rape investigation—” Tessa began.
“Remember that the club is netting $25 million a year in profits, at least according to the balance sheet you’re holding. That kind of money is worth killing for or dying over to a lot of people. Make sure that you understand that before you go poking into their business, for whatever reason.”
Chapter 25
Los Angeles, California
Thursday evening, March 11
Tessa and Luke left the Federal Building with Agent McKeltie’s warning echoing silently between them.
“Any more complaints about wasting our time with meetings?” Luke asked as they walked to his car.
“Nope. I’m just trying to process all the new information.”
“Stop for a second,” Luke said, pulling her to a halt next to his car in the quiet parking garage. “Until I saw the balance sheets, I had no idea of the size of Club Red’s business.”
“Neither did I,” she admitted. “I’d never heard of the place until you told me about it.”
“I don’t like it at all. McKeltie’s right—we’re dealing with a major cash cow. I’m betting the people involved would do anything to protect their setup.”
“I know. I can’t believe the club pulls in that much money and is allowed to continue without some kind of legal intervention.”
/> “You’re missing the point, Swiss. The situation is more dangerous than I thought, and we’ve been thrashing around in the dark during our investigation. God knows how many trip wires we’ve activated.”
“So we’ll be more careful. You can’t sit back and do the investigation at a distance when a young girl’s safety is at stake. That’s like trying to swim without getting wet. It’s just not going to happen.”
“Still, I want you to consider taking a break for a while. Let me and MacBeth be the ones to dive in the deep end.”
More amused than angry, Tessa pulled her arm free. “Why? Are you going to use your penis to swim?”
“What?” Luke stared at her.
She stabbed him in the chest with her finger. “Why should you be the ones asking the questions and poking around? This is my case, my problem. If the danger is that acute—and I’m not saying it is—do you think I want it on my conscience that you’re at risk while I sit home and file my nails?”
“Damn it, you’re not being reasonable. MacBeth and I are both former cops. We have concealed weapons permits, and we know how to defend ourselves.”
“That’s typical male talk.” Tessa laughed. “You think because you’re strong and armed and have hang-downs, you can protect yourself if the situation calls for it. You never consider that if you used your brains instead of testosterone, things might never get to that stage.”
“We’re not talking about external genitalia and the battle of the sexes here, we’re discussing a criminal enterprise worth tens of millions of dollars. I don’t want you to get hurt. Think about my conscience. Not to mention the fact that your father would hunt me down and cut off my hang-downs if something happened to you.”
No Escape Page 17
