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War on prostitution made simpler when pimps show their money

If you’re going to go after the pimps and sex traffickers of Las Vegas, kick them where it hurts.

You know, right in the bankroll.

To that end, Metro Vice Section Lt. Karen Hughes and officials inside the Las Vegas IRS office are working together to take down Southern Nevada’s most prolific panderers. They’re building cases that combine the street savvy of Metro Vice with the paper trail proficiency of the IRS Civil and Criminal Divisions.

At the front end of the process, the IRS is putting local limo and cabdrivers on notice that continuing to bird-dog customers for pimps and residential brothel operators will have consequences. But they’re small-time players in a billion-dollar business.

On the other side, local and federal law enforcement are using federal income tax laws to take down the sex traffickers, most of whom don’t often file with the IRS. Pimps drive Mercedes but report Yugo.

They love their big houses, big cars, big jewelry. Many are so proud of their status on the street that they broadcast it on the Internet. Apparently the thought of keeping a low profile has never occurred to them.

Somehow, I can’t see them suddenly deciding to issue W-2 or 1099 forms to their working girls.

The law enforcement strategy was conceived this year in a meeting between Hughes and Nevada IRS Special Agent in Charge Paul Camacho. They agreed “to work joint operations at the federal level to complement the state and local stuff we’re already doing,” Hughes says. She adds that Vice already works with the Clark County district attorney’s office on some related forfeiture issues.

The best part is IRS Criminal agents don’t need prostitutes to testify at trial. It’s not a sex case; it’s a tax case. A high-rolling lifestyle and a lack of filing compliance are enough for starters.

And the federal penalties can be substantially higher than those pimps see in the state system. When it comes to serving federal time under the sentencing guidelines, smooth talk and good time credits don’t amount to much. Hughes calls all that pimp money “virtually untapped revenue for the IRS.”

“We know they’re not filing tax returns for their ill-gotten gain,” she says. “It’s an area the IRS can really sink their teeth into. I think it will be just another tool that we as an agency and Vice in particular can use to combat prostitution in Las Vegas.

“Clearly, the federal statutes call for much more serious time and fines than the state statutes normally do. Any time you can get a very prolific pimp tried in the federal system, it’s great.”

And those penalties might soon be increasing.

Nearly 3,000 miles away, Rep. Carolyn Maloney, D-N.Y., appears to be joining the fight with the Human Trafficking Fraud Enforcement Act of 2010. On Dec. 2, Maloney introduced a bill that would establish an office inside the IRS to focus on tax violations committed “by persons who are under investigation for conduct relating to the promotion of commercial sex acts and trafficking in persons crimes.” If passed, the bill would substantially increase monetary and sentencing penalties for tax-evading sex traffickers.

In the federal system, increasing sentences from one to three years to five to 10 years is potentially devastating to the pimp trade.

Although a previous effort was unsuccessful, and it’s late in the lame-duck session, Maloney remains optimistic she’ll eventually prevail.

“Human trafficking is 21st century slavery,” she says. “It happens not only in remote corners of the world, but right here in our own backyard as well.”

That includes our own backyard in Las Vegas, a major hub on the shadowy circuit.

While the city wrestles with its “anything goes” identity, local pimps and sex traffickers are on the IRS and Metro radar.

John L. Smith’s column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295. He also blogs at lvrj.com/blogs/smith.

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