Manhattan District Attorney Robert M. Morgenthau announced today the indictment of a Manhattan attorney, LOUIS POSNER, for promoting prostitution and laundering over $700,000 in proceeds over a six-month period. The indictment also charges LOUIS POSNER and his wife, BETTY POSNER, with multiple counts of falsifying business records to aid in this criminal scheme.  

The year-long investigation leading to today’s indictment revealed that from mid-June 2007 to July 17, 2008, LOUIS POSNER, 52, a tax attorney in private practice, together with his wife, BETTY POSNER, 57, owned and ran an unlicensed club, called the Hot Lap Dance Club, located in an illegally sublet loft on the fifth floor of 344 West 38th Street. The club featured 40 to 70 female lap dancers, who charged $20 per dance, as well as live adult entertainment shows. The investigation revealed that from January 25, 2008 to July 17, 2008, many of the lap dancers were engaged in prostitution in the club’s private rooms. The club charged the customers for use of the rooms and split the fees with the dancers. Undercover police officers were offered sex for money by eight different dancers, with the prices ranging from $200 to $5,000. Investigators found that LOUIS POSNER was present at the club and oversaw its operations on a nightly basis, and that he was not only aware of the prostitution activity, but encouraged it and profited from it. LOUIS POSNER also had sex with some of the dancers in the private rooms, paying them for their services by waiving the $100 nightly fee he charged to all dancers who worked at the club. Investigators found that BETTY POSNER visited the club infrequently and apparently was not aware of the prostitution activity. Nevertheless, BETTY POSNER assisted her husband in managing the club’s finances and engaged in falsifying business records to do so.

From January 2008 to June 2008, the Hot Lap Dance Club made over $726,000, often grossing over $20,000 a night, mostly in cash. To hide these large cash amounts and disguise their source LOUIS POSNER made multiple smaller cash deposits on a daily basis into 13 personal and corporate bank accounts that he and BETTY POSNER controlled.

About 30 percent of the club’s proceeds came from credit card charges, the payments for which were directly deposited by the credit card companies into various corporate bank accounts. In applying for the contracts to process credit cards and open bank accounts, LOUIS POSNER and BETTY POSNER, individually and together, repeatedly made false statements to disguise the nature of their business. They falsely claimed, for instance, that their business was a corporation called Web Access, Inc., which in fact had been dissolved by the state in 2001 for failure to pay taxes. Similarly, they falsely claimed that their business was a “for profit” entity called Voter March, Ltd., which in fact was a “not for profit” entity formed in 2000 to protest the presidential election results that year and which had been inactive since 2004. In 2008, they incorporated a business called HLD Entertainment Corp. to serve as a front for the Hot Lap Dance Club, then falsely claimed in applications for credit card contracts and bank accounts that the corporation had been in business for “one year” and was involved in “catering” and “miscellaneous food stores.”

Pursuant to a court-authorized search warrant, New York City Police Department officers raided the Hot Lap Dance Club on July 17, 2008, and arrested LOUIS POSNER, workers and dancers known to have engaged in prostitution at the club. Police seized $2,250 in cash from the club and another $6,200 in cash from LOUIS POSNER. BETTY POSNER was arrested that evening at the POSNER’S home. Pursuant to additional court-ordered search warrants, police seized the $220,000 cash in the POSNER’S two bank safety deposit boxes and the $31,140 in their two private safes, as well an additional $229,170.84 from 13 personal and corporate bank accounts at four different banks. The total amount seized was $550,764.84.

LOUIS POSNER has been indicted on six counts of Money Laundering in the Second Degree, one count of Promoting Prostitution in the Third Degree, two counts of Falsifying Business Records in the First Degree and five counts of Falsifying Business Records in the Second Degree.

BETTY POSNER has been indicted on six counts of Falsifying Business Records in the Second Degree.

Money Laundering in the Second Degree is a class C felony, which is punishable by up to 15 years in prison.  Promoting Prostitution in the Third Degree is a class D felony, which is punishable by up to seven years in prison.  Falsifying Business Records in the First Degree is a class E felony, which is punishable by up to four years in prison.  
Falsifying Business Records in the Second Degree is a class A misdemeanor, which is punishable by up to one year in jail.

Both defendants were arraigned today in State Supreme Court where they entered not guilty pleas, and were released on their own recognizance. Their next court date is October 23, 2008.

Mr. Morgenthau thanked New York City Police Commissioner Raymond W. Kelly, Deputy Chief Brian Conroy, Sergeant Christopher Koch, Police Officer Vincent Kong, and four Undercover Officers of the New York City Police Department’s Vice Enforcement Division Club Initiative. Mr. Morgenthau also thanked Sergeant Christopher Pasquale, formerly with the Vice Enforcement Division Club Initiative and now with the 41st Precinct.

Assistant District Attorney Eugene R. Hurley, III, presented the case to the grand jury and will be in charge of the prosecution. Garrett Baldwin, an Investigative Analyst with the District Attorney’s Office, provided forensic accounting analysis, which was critical to this investigation.

Defendants’ Information:

LOUIS POSNER, 05/29/56
160 East 48 Street
New York, New York

BETTY POSNER, 07/21/51
160 East 48 Street
New York, New York

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