Accused Madam Threatens to Sell Her Phone Records

WASHINGTON - A woman accused of running a prostitution service catering to men in the Washington area is threatening to sell her list of 10,000 clients to pay for her defense.

Deborah J. Palfrey, 50, of Vallejo, Calif., was indicted on federal racketeering charges this week in U.S. District Court in Washington. She did business in the area under Pamela Martin & Associates, advertising in newspapers, on Web sites and in the Yellow Pages.

Federal authorities said the call-girl service, which had been operating since 1993, hired college-educated women to cater to men in hotels and homes in Washington and its Maryland and Virginia suburbs. In 13 years, the service employed 132 women, all at least 22 years old and who had other jobs, and generated about $2 million in income, they said.

"Ms. Palfrey adamantly disputes the government's claims of illegal behavior," according to her legal defense Web site, where she began seeking donations after the government raided her home in October, seizing more than $400,000 in cash and stocks, according to court records.

"It is an unfortunate fact of life that funds will need to be generated to counteract the present injustice," the Web site says. As a result, "consideration is being given" to selling Palfrey's phone records dating to 1993. The records include the phone numbers of about 10,000 clients in the Washington area, according to Palfrey's attorney, Montgomery Blair Sibley.

Palfrey had no comment on the charges, Sibley said. He told The Washington Post that his client's "legal escort service" was almost exclusively a cash business. He said that the women who worked for Palfrey were given 1099 tax statements each year, listing their earnings as independent contractors, and that Palfrey accurately reported her yearly income on federal tax returns.

According to the affidavit, the women told investigators that Palfrey urged them to work for her at least three nights each week and charge their clients up to $300. It said the prostitutes would send half of their fee to Palfrey using money or postal orders, illegally laundering the money so it would be hard to trace.

Palfrey was convicted in 1991 for operating an illegal prostitution business in California and served 18 months in prison, according to the affidavit. She "started her current illegal prostitution business while still on probation," the affidavit says.

Palfrey is scheduled to make her initial appearance in the criminal case at the District of Columbia federal courthouse next Friday.

The U.S. attorney's office in the district, which is prosecuting the case, said it had no comment on the client list or the possibility that Palfrey will make it public.

The indictment charges Palfrey with violating the Racketeer Influenced and Corrupt Organizations Act and with three counts of interstate travel in aid of racketeering and one count of conspiracy to launder money.

(Copyright 2007 by The Associated Press. All Rights Reserved.)