Illicit Escort Services Survive With Help of Legitimate Businesses

Legitimate businesses? They don’t ask questions--they want the money. People don’t want to know. If they knew they would have to refuse you. --Sydney Biddle Barrows, author of “The Mayflower Madam”

and former owner of Cachet Escort Service in New York

Illicit escort operators depend on legitimate businesses to survive.

For example, Alfonso Lopez, facing trial on 41 counts of pimping and pandering in connection with running one of the biggest escort operations in Orange County, ran prominently displayed ads for his “Exotic,” “She,” “Chi Chi’s” and “Adam and Eve” escorts in the Pacific Bell Yellow Pages.

For customers who paid for $150-an-hour dates by check, Lopez subscribed to Telecheck--the nationwide check-guarantee company that lets a merchant know in seconds whether a customer’s credit is good.

“We try to trust everybody,” said Frank Mielcarz, Telecheck’s Orange County manager, when asked about Lopez’s account. He said that his company attempts to check out a merchant’s background, and that he was unaware that the alleged nature of Lopez’s business was prostitution.

Limited Ability to Borrow

“When we find out that they are something other than what they appear, we cancel,” said Mielcarz, adding that Lopez’s service agreement listed “Al Lopez” for the company name, not the names of his escort services. “Ninety-nine-point-nine percent of the time we don’t get burned.”

Mielcarz noted that Lopez canceled his contract with the company last November after a rate increase.

Lopez’s escort services also accepted MasterCard and Visa.

According to court documents, Lopez sent his credit card vouchers, each for $170, to Financial Management Systems Co. in San Rafael, Calif.

Financial Management does business with merchants who have a limited ability to borrow and cannot afford delays in collecting money owed to them. They operate by “factoring,” in which a financial institution buys a merchant’s accounts receivable and for a fee assumes responsibility for collecting the money from the merchant’s customers.

Irwin Rosenthal, Financial Management’s owner, said in a telephone interview, “We deal with people who, because of their financial structure, cannot get merchant credit privileges from banks.”

“I buy certain of their bills for a fee. We, in turn, allow them to use our name for their credit purchases.”

Credit Card Vouchers

Financial Management Systems was the name that appeared on Lopez’s credit card slips, which helped disguise the nature of the business from a suspecting spouse.

Rosenthal, who conducted business with Lopez over the phone and through the mail for at least a year, said he was surprised to learn of Lopez’s arrest by Anaheim police, adding that he had “no idea what business he was in. As far as I know he only had an answering service.”

Dawn Randall, who with Vicki Novak-Smith is awaiting trial in connection with running an alleged prostitution operation from a Garden Grove apartment, used a similar arrangement for her credit card customers.

Police say, and Randall confirmed, that she had an arrangement with a picture-framing business in San Diego, which bought her credit card vouchers for a fee.

But the illicit escort services’ key to survival is advertising. And for that, they turn to the Yellow Pages, local newspapers and pornography magazines. In the Yellow Pages, the ads are fairly uniform.

Listed under “escorts,” the reader might see a drawing of a high-heeled shoe and a rose, with promises of female companions who are “confident, self-assured and discreet.” Or a bare-shouldered blond who beckons with an alluring eye and declares:

“At your location for your convenience and pleasure. Credit cards accepted.”

Both Pacific Bell and General Telephone Directories help escort operators design their ads and advise them on where best to place them.

Carol Seifers, in charge of advertising standards for Pacific Bell Directories, explained: “Basically, as a corporation we don’t condone prostitution or any other illegal activity. However, as a publisher, we don’t feel we have the authority to investigate or take action against those establishments suspected of conducting business in such areas. We feel that massage and escort businesses as stated are legitimate businesses when properly conducted.”

Reading from the Yellow Pages’ Content Rules and Heading Information, she said managers can refuse to accept or demand changes in “advertisements which are in the opinion of the directory indecent, vulgar, obscene or offensive . . .”

Accept Advertising

Tom McGinley, the advertising manager for Pacific Bell Directories in Orange County, added: “We will accept advertising as long as the copy meets our standards regardless of what we personally might think. We know what the reputation is but cannot paint all of them with the same brush.”

Officials at General Telephone Directories concur.

“We don’t do police checks when someone comes to buy an ad off of us,” said Ralph Adams, a regional manager for GTE Directories Corp. “We have to operate on a certain amount of good faith.

“We don’t discriminate. We do an ad for them (escort services) like we do for a bicycle shop or a lawn-mower shop.”