I-Team: Las Vegas Sex Industry Put On Notice - 8 News NOW

I-Team: Las Vegas Sex Industry Put On Notice

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LAS VEGAS -- The billion dollar sex industry in Las Vegas was put on notice Friday by law enforcement.

A criminal indictment unsealed in federal court Friday afternoon is likely the first in a long-anticipated crackdown on escort services and outcall entertainers, seen by police as fronts for prostitution.

It is one charge against a single target but the criminal complaint unsealed should send chills through an industry that has seemingly operated above the law for a long time.

As the I-Team has reported over the past two years, Internal Revenue Service agents have vowed to work with Metro Police vice officers to go after the multi-millionaire owners of escort services, and Friday, they made good on that promise.

The complaint singled out an outcall entertainment company called Midnight Inc., which advertises girls direct to your hotel room. Metro vice officers said they were solicited by women sent to their hotel by the company, which is owned by a husband and wife -- Manny and Amy Varagiannis. Emmanouil "Manny" Varagiannis is a general manager at the Olympic Gardens gentlemen's club.

What makes this bust different is that IRS agents worked with Metro as part of a financial crimes task force to follow the money. The complaint spells out how Varagiannis allegedly tried to avoid financial reporting requirements by making bank deposits just under the $10,000 trigger.

Lawmen tracked nearly $2 million in cash deposits made from the end of 2008 until fall of 2011, all of it in cash amounts under $10,000, often with many deposits on a single day. The IRS said that is a crime called structuring.

Attorneys David Brown and Jay Brown, who represent Varagiannis, declined to comment except to say their client was arrested Thursday and will be free on his own recognizance later Friday.

Two years ago, the I-Team reported how IRS agent-in-charge Paul Camacho promised to help Metro go after the escort owners by tracking their money.

On Friday, Camacho said, "The goal of the financial fraud task force is to work with local law enforcement to follow the money, and in this case, our task force officer did just that."

Camacho declined to say whether more escort service owners are being targeted but court documents note the investigation is ongoing.

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